Business briefs for August 12, 2003

Tuesday, Aug. 12, 2003 | 10:54 a.m.

Publicity hurting company's results

Martha Stewart Living Omnimedia said Monday that second-quarter earnings fell sharply, another sign that the legal troubles of Stewart remain an albatross for her once-lofty company.

Now that Stewart faces trial in January on federal charges, the essential question for the company has become how to survive with her, and without her. Its executives have been striving to produce material that does not bear the Martha Stewart name -- always in the game plan, apparently, but in high gear since that name surfaced in connection with the ImClone Systems insider-trading investigation 14 months ago.

Stewart's company did earn money in the second quarter after posting losses in the last two quarters. Its profit came in at $931,000, or 2 cents a share, almost 88 percent less than the $6.7 million, or 14 cents, earned in the same quarter a year ago. Still, the forecast for the full year that executives provided was bleak: a loss of $7 million to $9 million.

'AOL' name may be dropped

NEW YORK -- America Online is asking AOL Time Warner Inc. to drop "AOL" from its name, concerned that negative publicity about the parent company is hurting the online service's efforts to right itself.

Jonathan Miller, chief executive of America Online, told his staff in an e-mail Monday that "AOL" the online service was becoming confused with "AOL" as shorthand for the world's largest media company.

"I believe it's time for us to get our brand back," Miller said in his note. "Any controversy or criticism involving the corporate entity has actually hit our consumer brand."

Coast-to-coast flights launched

PHOENIX -- America West Holdings Corp. announced new coast-to-coast flights Monday, hoping to grab market share from major carriers.

America West said it will add two flights a day in each direction on the following routes: New York to Los Angeles starting Oct. 26; Boston to Los Angeles starting Oct. 26; New York to San Francisco starting Dec. 19; and Boston to San Francisco from March 1.

Executives said the airline's new transcontinental routes should boost capacity by up to 2 percent in the fourth quarter. America West, which has hubs in Las Vegas and Phoenix, had previously expected capacity to remain flat or to drop 2 percent in the fourth quarter.

"This takes advantage of high-fare markets that are or were dominated by the higher-cost airlines," said Scott Kirby, vice president of sales and marketing for the low-cost airline.

Four workers fired, earnings re-stated

NEW YORK -- MetLife Inc. fired three employees after lowering its previously reported second-quarter earnings by $31 million because of improperly deferred expenses at its New England Financial affiliate.

MetLife also said Thom Faria, president of New England Financial, has left the company and will be succeeded by Eileen McDonnell, now senior vice president for individual insurance business development. The company also announced three other employees were fired related to the improperly deferred expenses.

The New York-based life insurer said adjusted net income comes to $580 million, or 79 cents a share, rather than $611 million, or 84 cents a share, as reported last week. The company earned $387 million, or 53 cents per share, in the same quarter last year.

New England Financial sells life insurance policies to wealthy people.