Business briefs for April 24, 2002

Wednesday, April 24, 2002 | 9:47 a.m.

Finances improve at Internet giant

SEATTLE -- The old-economy standbys of cutting prices and offering freebies have been paying off for Internet retailer Amazon.com.

The online retailer on Tuesday reported a net loss of $23 million or 6 cents a share for the first quarter, beating Wall Street's expectations. Company executives also forecast sales for the rest of the year to be better than expected.

Amazon Chief Financial Officer Warren Jenson said a combination of price cuts and free shipping attracted more business, while the company was able to fill orders more efficiently.

"One thing we do know, lower prices work," Jenson told reporters in a conference call.

The loss for the quarter that ended March 31 compares with a net loss a year earlier of $234 million or 66 cents a share, which included restructuring-related and other charges of $114 million and goodwill amortization of $49 million.

Net sales were $847 million, up 21 percent from $700 million in first-quarter 2001.

CEO denies wrongdoing

WILMINGTON, Del. -- It seemed fitting that Carly Fiorina led off the trial over Hewlett-Packard Co.'s $19 billion purchase of Compaq Computer Corp. The HP chief has put her credibility and career on the line and fought tenaciously for the deal.

At times stubborn and meticulous, Fiorina spent more than four hours Tuesday denying claims by dissident HP director Walter Hewlett that she deceived shareholders about the deal's financial prospects and bullied big investors to approve it.

Fiorina had to fend off allegations made in opening arguments by Hewlett lawyer Stephen Neal, who said company memos and a personal diary showed that HP executives knew the Compaq deal was likely to work out far worse than what the companies were publicly touting.

Neal said HP really knew the Compaq deal would likely reduce the combined company's earnings per share by as much as 10 percent rather than boost them 12 or 13 percent, as HP claimed in Securities and Exchange Commission filings.

Fiorina challenged the claim that HP misled investors, saying Neal had taken the charts and memos out of context and overlooked other reports showing the deal well on track. Fiorina said HP made conservative estimates so as to "underpromise and over-deliver."

President resigns

SANTA MONICA, Calif. -- National Golf Properties Inc., the largest publicly traded U.S. golf course owner, whose shares are down 69 percent in 12 months, said James Stanich resigned as president.

Stanich will remain a member of the company's board of directors, National Golf said in a statement Tuesday. It didn't give a reason for his resignation. Stanich is the son-in-law of National Golf Chairman David Price.

National Golf plans to merge with its biggest tenant, American Golf Corp., after a decline in American Golf's business triggered a default on both companies' debt. Price is also chairman of American Golf, which spun off National Golf in 1993.

Telecom giant's loss nears $1 billion

NEW YORK -- Phone and cable carrier AT&T Corp. today reported its loss widened to nearly $1 billion in the first quarter, blaming the performance on falling long-distance sales and a slide in the value of its investments.

AT&T said it lost $975 million, or 28 cents per share, in the three months ended March 31,compared to a loss of $192 million, or 10 cents a share, in the year-ago quarter.

Revenue fell 11.3 percent to $12.02 billion from last year's $13.55 billion.

The Basking Ridge, N.J.-based company said long-distance telephone sales continue to be punished by increasing competition from cellular service, e-mail and local telephone carriers that have been steadily gaining federal approval to enter the long-distance market.

A change in accounting methods also accounted for 24 cents of the loss, AT&T said.

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