News Corp. outlook cut by analysts

Shares of media company News Corp., controlled by Rupert Murdoch, fell the most in five years after Sanford C. Bernstein & Co. and UBS analysts cut their outlook for the stock, citing concerns that growth will slow.

Bernstein’s Michael Nathanson reduced his 12-month share-price target to $21 from $24 and lowered his rating to “market perform” from “outperform” in a note Monday. UBS’s Michael Morris cut his price projection to $25 from $26.

Profit growth is likely to slow because the MySpace social-networking website will fail to meet targets, Nathanson wrote. Dow Jones & Co., acquired in December, will require additional investment and might be slow to turn around because of weak newspaper advertising, he wrote.

“We are wary of News Corp.’s relative positioning in this intensely competitive business that features established players including Google and Yahoo,” Morris said.

Class A shares of the New York company fell 86 cents to $18.14.

Valeant shares down sharply

Shares of Valeant Pharmaceuticals International fell the most in five months as the Costa Mesa drug developer regroups after its president quit last month.

Valeant reported April 1 that its president, Charles J. Bramlage, quit in late March and that it couldn’t estimate the costs of a planned restructuring, which includes firings and asset sales.

The price fell $1.12, or 8.3%, to $12.44 a share, and earlier declined 10%.

Valeant also fell in early November after third-quarter earnings missed estimates. The number of shares traded nearly tripled to 3.33 million, compared with a three-month average of 1.17 million.

Dell bond sale raises $1.5 billion

Dell Inc., trying to regain its position as the largest maker of personal computers from rival Hewlett-Packard Co., raised $1.5 billion in its first bond offering in a decade.

The company, which 23 years ago pioneered selling custom-made PCs directly to customers, is tripling its debt load as Chief Executive Michael Dell attempts to revive profits by selling more machines in stores, offering fewer model choices and closing a factory in Texas.

Dell may also need to issue more debt if it provides additional customer financing, according to Fitch Ratings.

Based in Round Rock, Texas, Dell follows software maker Oracle Corp. in coming to the bond market this month as investors seek alternatives to financial debt that has tumbled in value. Oracle raised $5 billion in its largest offering in two years.

“Large tech companies have started to use a little more leverage over the last couple years,” said Jayson Noland, an analyst with Robert W. Baird & Co. in Milwaukee.

Arthur Andersen auditors barred

Nearly six years after the collapse of WorldCom Inc., the Securities and Exchange Commission barred two former Arthur Andersen auditors from practicing before the agency in settlements of claims that they inadequately scrutinized the 2001 earnings as the communications company was defrauding investors.

Melvin Dick, 54, and Kenneth Avery, 41, should have arranged more thorough audits after learning WorldCom executives had reason and opportunity to deceive shareholders, the SEC said Monday.

The two accountants didn’t admit or deny wrongdoing in their settlements.

Dick can apply for reinstatement to practice before the SEC after four years, and Avery can apply after three.

Arthur Andersen, once the fifth-largest U.S. accounting firm, collapsed in 2002 after being indicted for its role in the Enron Corp. scandal. WorldCom filed the biggest bankruptcy in U.S. history that same year after disclosing that it inflated revenue and hid expenses to meet Wall Street expectations. The company is now part of Verizon Communications Inc.

Bayou co-founder gets 20 years

Samuel Israel, a co-founder of bankrupt hedge fund company Bayou Group, was sentenced to 20 years in prison after pleading guilty to defrauding investors of more than $400 million.

“I lied to you and I cheated you and I cannot put into words how sorry I am,” a visibly sweating Israel, 48, told investors as he stood before U.S. District Judge Colleen McMahon.

The sentence brings to a close the criminal prosecutions stemming from the company’s collapse. Bayou filed for bankruptcy in May 2006, prompting lawsuits claiming it operated a “Ponzi scheme” that paid old investors with money from new ones. Israel faced as many as 30 years in prison had he been convicted at trial.

From Times Wire Services