BUSINESS BRIEFS
Lehman Brothers minimizes losses
Associated Press
NEW YORK — Lehman Brothers Holdings Inc. reported its third straight quarter of losses yesterday, due to turmoil in global credit markets, but the company managed to offset most of its problems and easily beat Wall Street expectations.
Lehman, the largest U.S. underwriter of mortgage-backed bonds, relied on a strong performance from its equities business to sidestep losses stemming from the subprime mortgage problems. The New York-based investment house was able to offset most of a $3.5 billion writedown with transactions designed to curtail its losses.
However, Lehman chief financial officer Erin Callan said she feels optimistic about Lehman's competitive position on Wall Street — and that could be seen in the company's quarterly numbers. For the three months ended Nov. 30, profit after paying preferred dividends was $870 million, or $1.54 per share, compared with $987 million, or $1.72 per share, a year earlier. Revenue fell 3 percent to $4.39 billion from $4.53 billion a year earlier.
Analysts polled by Thomson Financial had projected a profit of $1.42 per share on revenue of $4.26 billion.
GERMAN AIRLINE BUYS JETBLUE STAKE
NEW YORK — Germany's biggest airline, Deutsche Lufthansa AG, said yesterday it is paying $300 million for a 19 percent stake in JetBlue Airways Corp., whose stock has lost about half its value since an operational meltdown last Valentine's Day.
The move, which could be a precursor to an eventual takeover if U.S. laws are changed, comes as the euro has risen significantly against the dollar, making U.S. companies bargains for European buyers.
JetBlue shares rose 90 cents, or 14.4 percent, to $7.15 yesterday. But that still leaves them well below where they were in February when an ice storm hit New York, leading to a series of snafus that left passengers stuck in planes on taxiways for hours and ground much of the JetBlue fleet for days.
The Forest-Hills, N.Y.-based airline, which began service in 2000 as a low-cost carrier, promised to beef up its staffing and take other steps to better deal with weather and other disruptions.
But those added costs came just as fuel expenses were soaring.
The airline posted a first-quarter loss and has had tepid earnings since then. It also scaled back its expansion plans.
MURDOCH WINS DOW JONES DEAL
NEW YORK — Rupert Murdoch's $5 billion-plus bid for Dow Jones & Co., publisher of the Wall Street Journal, cleared its final hurdle yesterday as shareholders of the financial publishing company gave their approval, setting up the deal to close later in the day.
The changeover is sure to bring significant changes to the Journal, starting with a new management team announced late last week.
Longtime News Corp. publishing executive Les Hinton will be chief executive, while Robert Thomson, editor of Murdoch's The Times newspaper in London, will be publisher. Several Dow Jones executives are departing, including CEO Richard Zannino.
Shareholders approved the deal by a margin of 60.3 percent. About 78 percent of the company's publicly traded shares were voted for the deal, while 54 percent of the Class B shares, which are largely held by the Bancrofts, were in favor.
DOW WORKS WITH KUWAIT COMPANY
GRAND RAPIDS, Mich. — Dow Chemical plans to sell a 50 percent interest in five of its global businesses to a Kuwaiti company for about $9.5 billion and form a new joint petrochemicals venture, the world's second-largest chemical company said yesterday.
Shares of Dow Chemical jumped more than 6 percent yesterday following the announcement.
Dow said the transaction with Petrochemical Industries Co., a subsidiary of state-owned Kuwait Petroleum Corp., is subject to the completion of definitive agreements and regulatory approvals.
Dow expects the deal to close in late 2008.
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