Business briefs for Feb. 13, 2004

Friday, Feb. 13, 2004 | 11:22 a.m.

Job cuts hurt results

ATLANTA -- Coca-Cola Co., the world's largest soft-drink maker, had its first earnings decline in almost two years because of costs to eliminate jobs and slower-than-expected growth in North American soft-drink sales.

Net income fell to $927 million, or 38 cents a share, from $930 million, or 38 cents, a year earlier, the Atlanta-based company said. Sales increased 7.9 percent to $5.18 billion, boosted by a declining dollar, while the volume of beverages sold trailed the company's goals.

The amount of beverages sold in North America rose 1 percent, hurt by a decline for Vanilla Coke, which debuted in May 2002, after PepsiCo Inc. followed with its own vanilla- flavored cola. Chief Executive Douglas Daft cut about 3,700 jobs last year, using savings to increase advertising and introduce products such as a Minute Maid juice that purports to reduce cholesterol and new flavors of Diet Coke.

Excluding certain costs, profit would have been 46 cents a share, 1 cent more than the 45-cent average estimate of 19 analysts surveyed by Thomson Financial.

Loss narrows

RICHMOND, Va. -- US Airways Group Inc. cut its losses sharply in the fourth quarter, though the airline's top executive warned that it continues to lag behind financial goals.

The Arlington-based company reported a loss of $98 million, or $1.82 per share, a heady improvement from the loss of $794 million, or $11.67 per share, posted in the year-ago period.

The company's pretax loss for the fourth quarter of 2003 -- excluding a $30 million gain from selling its investment in the Hotwire travel site -- was $129 million. That compares with a year-ago pretax quarterly loss of $352 million, which excludes $565 million in bankruptcy-related items and aircraft impairment charges.

Operating revenue rose 9 percent to $1.76 billion in the quarter from $1.61 billion in the year-earlier period.

Insurance profit up

TRENTON, N.J. -- Insurance and investment giant Prudential Financial Inc. swung to a $481 million profit in the fourth quarter after a loss a year earlier as income rose in its three main divisions, particularly insurance -- despite flat revenue.

The company said that net income was $481 million, or 92 cents per share. In the year-ago quarter, Newark, N.J.-based Prudential recorded a loss of $71 million, or 10 cents per share.

Excluding one-time items -- $286 million in gains from divested or discontinued businesses and $29 million in investment losses and related costs -- adjusted operating income was $331 million, or 64 cents per share. In 2002's fourth quarter, adjusted operating income was $248 million, or 46 cents per share.

Total revenue declined about 2 percent, to $4.54 billion from $4.62 billion a year earlier, but still beat analysts' estimates by about $80 million.

Profit up 41 percent

NEW YORK -- Loews Corp., the conglomerate run by the Tisch family, said fourth-quarter earnings rose 41 percent as profit at its CNA Financial Corp. insurance unit more than tripled and the company made money on investments.

Net income rose to $367.4 million from $290.2 million a year earlier, the New York-based company said. Loews shareholders earned $1.79 a share, compared with $1.20 a year earlier. Holders of Carolina Group, the tracking stock for Loews' cigarette business, earned 74 cents, down from 92 cents.

CNA's profit comes after a third-quarter loss from boosting reserves to pay claims on policies the insurer sold too cheaply in the 1990s. CNA Chief Executive Stephen Lilienthal has raised prices and sold businesses. Loews, which owns 90 percent of CNA, is helping the insurer raise $1.4 billion to shore up capital and avoid cuts in its financial strength ratings.

Debt reduction planned

NEW YORK -- Cosmetics-maker Revlon Inc. slashed its fourth-quarter loss from a year earlier, when results included heavy charges from the company's growth plan.

The New York-based company, which makes the Revlon, Almay and Ultima make-up brands, also said it has reached an agreement with its top shareholder to cut its debt in half.

Revlon reported a fourth-quarter loss of $12.6 million, or 18 cents a share, compared with the prior year's loss of $179.4 million, or $3.36 a share.

Results for the latest quarter included $5.4 million in restructuring costs. The prior year's results include $5.6 million in restructuring charges and $100 million in charges from Revlon's growth plan, a broad range of initiatives put in place last year meant to strengthen advertising and in-store promotions, discontinue some products and adjust prices on others.

Sales jumped 73 percent to $368.5 million from $212.6 million in the previous fourth quarter.