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* Medco Health Solutions Inc. plans to settle federal fraud and kickback claims, costing the largest U.S. manager of drug benefits $163 million in the first quarter. The tentative agreement reduced net income in the quarter to $44.8 million, or 15 cents a share, the company said. Revenue rose 21% to $10.6 billion.

* Agoura Hills-based video game maker THQ Inc. posted a fourth-quarter loss as demand slumped. The loss was $7.94 million, or 12 cents a share, contrasted with profit of $10.1 million, or 16 cents, a year earlier. Sales fell 14% to $148.1 million.

* America Online is set to offer users of its AIM instant-messaging service a free phone number to use for incoming calls and, for a fee, the ability to call regular phones from the software.

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