Business briefs for May 12, 2004

Wednesday, May 12, 2004 | 10:58 a.m.

Miller steps down

William Miller, a key figure in the growing feud between the Colorado River Commission and Nevada Power Co., has left the commission.

Jim Salo, an attorney and special assistant to the executive director of the commission, confirmed that Miller, an energy trader, had left the CRC. He would not elaborate on the circumstances surrounding his departure.

Nevada Power executives have claimed Miller is the commission energy trader who made a series of statements about efforts to damage the Las Vegas electric company. Nevada Power uncovered the statements on recorded conversations between commission energy traders and companies such as Enron Corp.

Miller and other commission executives were named by Nevada Power in a U.S. District Court lawsuit against the Southern Nevada Water Authority, which uses electricity purchased by the commission.

Media giants complete deal

NEW YORK -- NBC completed its deal to merge with the Universal entertainment businesses today, creating a new media conglomerate that will take its place alongside giants such as Time Warner Inc. and Viacom Inc.

The new company, to be known as NBC Universal, will be led mainly by NBC executives including Bob Wright, the NBC chairman who will become its chairman and CEO. Wright will also continue as vice chairman of General Electric Co., NBC's parent company.

The deal brings together television's top-rated network among the 18-49 age group, which advertisers try hardest to reach; a major movie studio; a television production studio; a handful of cable TV channels including USA, Sci-Fi, CNBC and Bravo; and a group of 29 television stations.

Telecom firm's loss widens

RESTON, Va. -- Shares of XO Communications Inc., the telephone company controlled by financier Carl Icahn, fell 13 percent Tuesday after its first-quarter net loss widened to $48.5 million on lower sales.

XO, which emerged from bankruptcy protection in January 2003, said its first-quarter net loss widened to 37 cents from $20.5 million, or 22 cents, a year earlier.

Shares of XO fell 50 cents to $3.33 at 4 p.m. Tuesday in Nasdaq Stock Market composite trading. The shares have fallen 42 percent in the past year.

Revenue fell 9 percent to $260.9 million, mainly because of fewer orders from carriers that use its network, XO said in a statement. In February, XO agreed to buy rival Allegiance Telecom Inc. for about $600 million. Allegiance will nearly double XO's business-phone customers to 330,000 and give it customers in three new markets, XO said at the time.

Report shows abuse of workers

SAN FRANCISCO -- Gap Inc., the biggest U.S. clothing chain, said in a report that it revoked contracts with about 136 factories that make its clothing because of continued or severe labor violations.

The report, released on Gap's Web site, is the result of the retailer's program to monitor and improve conditions in overseas factories, the San Francisco-based company said. The violations include psychological coercion, verbal abuse and unsafe conditions at many of the 3,000 factories that produce Gap merchandise, the Wall Street Journal reported today.

Retailers including Gap and Wal-Mart Stores Inc. have been criticized by unions and human rights organizations over the treatment of workers in developing countries, including low wages and excessive hours.

"When we find problems, we work with management to try to resolve them as quickly as possible," the Web site said.

Hyundai stake to be sold

SEOUL, South Korea -- DaimlerChrysler AG has decided to sell its 10.5 percent stake in South Korea's Hyundai Motor Co. and is sharply scaling back other aspects of their 4-year-old partnership, the companies said today.

The two automakers have agreed to "realign the alliance in order to reflect more realistically current market conditions," the companies said in a joint statement.

Department stores double income

CINCINNATI -- Federated Department Stores Inc. said first-quarter earnings more than doubled as its Bloomingdale's and Macy's stores attracted upper-income shoppers. The company said this year's profit will be higher than it forecast.

Net income surged to $96 million, or 52 cents a share, from $46 million, or 24 cents, a year earlier, the Cincinnati-based company said in a statement. Sales in the three months ended May 1 rose 6.9 percent to $3.52 billion, the biggest increase in more than four years.

Annual net income will increase to as much as $3.90 a share, Federated said.

Forecast lowered as sales slump

RICHMOND, Va. -- CarMax Inc., the used-car retailer spun off from Circuit City Stores Inc., said today first-quarter profit may decline because consumers are buying fewer used cars than it expected. Shares of CarMax fell as much as 12 percent.

Profit will be 30 cents to 32 cents a share in the quarter ending May 31, lower than its prior forecast of 33 cents to 35 cents, the Richmond, Va.-based company said in a statement.

Sales of used vehicles have been sluggish in May and tests of further price reductions show they wouldn't help, CarMax said.

Shares of CarMax fell $2.29, or 9.2 percent, to $22.71 at 9:52 a.m. in New York Stock Exchange composite trading after dropping to $22.01 as trading began. The stock had declined 19 percent this year.