TOP 10 STORIES / Week of Feb. 2
1 California Searches for Power Relief: Gov. Gray Davis signed the first of the state’s long-term power contracts, but terms were not revealed, sparking sharp criticism. The state is spending at a clip of more than $1 billion a month to buy power. Support grew for a proposal to buy the electricity transmission grid from the state’s ailing utilities as a way for the state to gain more control of its power destiny while enabling Southern California Edison and Pacific Gas & Electric to pay down ballooning debts. Davis announced proposals to speed the building of power plants. Pacific Gas & Electric warned of natural gas shortages in March. A federal judge ordered some suppliers to continue to sell to the California Independent System Operator. The state spent another week with perilously low electricity supplies.
(Nancy Rivera Brooks)
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2 Animal Group’s Effectiveness Questioned: The Los Angeles nonprofit group responsible for monitoring animal safety on movie and television sets has been slow to criticize mistreatment yet quick to defend the big-budget studios, interviews and documents show. Gini Barrett, the head of the American Humane Assn.’s Film and TV Unit, has been accused by her own staff of interfering in probes that might embarrass filmmakers. In one instance, the AHA gave a “believed acceptable” rating to Walt Disney’s 1999 film “The 13th Warrior” although a horse had to be destroyed after a risky stunt. Also, Barrett, a former lobbyist for Hollywood’s prominent producers group, was aware that the unit’s former attorney dated two trainers she was assigned to oversee. Barrett said she’s shown no favorites in Hollywood and aggressively fights for the safety of animals.
(Ralph Frammolino and James Bates)
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3 Boeing Wings It: Boeing Co. is developing a futuristic commercial aircraft shaped like a large stingray that could carry as many as 800 passengers and counter archrival Airbus Industrie’s bid to build a super-jumbo jet. The blended wing-body airplane is under development at Boeing’s Phantom Works research laboratory in Long Beach. The developers believe the aircraft’s unique shape would enable it to fly more people and at lower cost than conventional tube-and-wing-shaped planes.
(Peter Pae)
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4 Cisco Warns of Slowdown: Internet equipment powerhouse Cisco Systems Inc. missed Wall Street’s earnings and revenue projections for the first time in 11 years as a public company and warned that the sputtering U.S. economy would slow the company’s double-digit growth. The news sent Cisco shares down and pulled other technology shares with it. The company said sharp reductions in capital spending by Internet service providers as well as manufacturing companies hurt results, but it noted that the nearly 50% rise in pro forma earnings was within the range of analyst expectations. Cisco shares fell 6% to $33.56 in after-hours trading on its announcement Tuesday. On Wednesday, the technology-laden Nasdaq fell 56.67 points, or 2.1%, to 2,607.82. (Jon Healey)
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5 Motorola to Cut More Jobs: Motorola Inc. announced plans to slash as many as 4,000 jobs, or about 12% of its semiconductor unit work force, and Dell Computer Corp. reportedly was poised to unveil the first layoffs ever at the personal computer company. Motorola said its third round of cuts since early December is a reflection of the slowing economy rather than internal problems at its chip operations, although chip sales have been declining. Previous cuts were made in its cell phone business. Dell said it is trimming costs, but would not confirm a report that it might lay off as many as 4,000 of its 39,000 full-time employees as part of a plan to cut costs by 10%. The news Friday helped pull Nasdaq down 91.09 to 2,470.97. The index was off 7.1% for the week.
(A Times Staff Writer)
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6 Disney Profit Report Upbeat: Walt Disney Co. pleased Wall Street with higher-than-expected quarterly operating earnings, boosted by growth in its theme parks and movie studio businesses. At an outing for analysts in Anaheim, two days before Disney opened its $1.4-billion California Adventure theme park, management sought to calm investor fears about a faltering economy by stressing that the entertainment giant is not heavily reliant on advertising. Disney also unveiled an alliance with Kmart Corp. that is the cornerstone of a plan for turning around its slumping consumer products group. Disney’s other trouble spot, Go.com, is being shut down. (Sallie Hofmeister)
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7 Hughes, News Corp. in Pact: Hughes Electronics Corp. and News Corp. have reached a tentative agreement to combined their satellite television operations to create the world’s largest provider of pay TV, according to people close to the talks. The deal, which has been the subject of negotiations for months, requires the approval of the boards of not only Hughes, which owns the prized DirecTV service, and News Corp., but also of Hughes parent General Motors. The GM board did not vote on the proposal at a meeting Tuesday but gave Hughes the go-ahead to proceed with the broad outlines of a deal, the sources said. Under the proposal, Hughes would split off from GM into its own independent public company, then acquire News Corp.’s Sky Global Networks assets, which include holdings in BSkyB satellite services, StarTV and Gemstar International. News Corp. and its partners, Microsoft and Liberty Media, would pay GM for its stake and take operational control as the largest remaining shareholder. News Corp. would own a 35% stake in the entity, and existing Hughes shareholders would own the remaining 65%. (Sallie Hofmeister)
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8 Bargains Push Up Retail Sales: Despite flagging consumer confidence, U.S. retailers rang up stronger-than-expected sales in January, thanks to sweeping discounts on merchandise. But analysts said shoppers remain cautious, which means retailers probably will keep marking down prices. In fact, January clearance sales could stretch into June this year, analysts say, a scenario that could squeeze retailers’ profits. Nationwide, sales at stores open at least a year moved up 4.8% from the same month in 2000, according to Bank of Tokyo-Mitsubishi Ltd. The firm had forecast an increase of 3.5% to 4%.
(Leslie Earnest)
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9 Icebox Frozen: Santa Monica-based Icebox.com said it was shutting its doors and laying off its remaining 27 employees after its fund-raising efforts fell well short of its goal. The online entertainment company, which teamed with television industry veterans to produce animations for young adults, tried to use the Internet as a proving ground for future TV--but couldn’t persuade investors to provide the $10 million it needed to sustain itself through the year. (Jon Healey)
10 Ellis Makes Bugle Boy Offer: Bugle Boy Industries Inc. said Perry Ellis International, which licenses the Perry Ellis men’s clothing line, offered $54 million to acquire its brand and wholesale operations, a week after the troubled Simi Valley sportswear maker filed for Chapter 11 bankruptcy protection. Under the preliminary deal, privately held Bugle Boy is separating its clothing manufacturing operation from its retail stores, which are being closed, and selling it as a going concern. Perry Ellis has a history of buying under-performing brands and turning around their sales, an analyst noted.
(Marla Dickerson)
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Nasdaq Gives Up Its Gain
Sour news from technology bellwethers pulled the Nasdaq down 7.1% to 2,470.97, its second straight weekly loss and worst performance since the week ended Dec. 15. The decline trimmed Nasdaq’s year-to-date gain to 0.02%, compared with 16% two weeks ago.
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Source: Bloomberg News
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* These and additional stories from last week are available at https://www.latimes.com
/business, divided by category. Click on “Money and Investing,” “Entertainment Business” and other topics.
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* Please see Monday’s Business section for a preview of the week’s events.
