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AT&Amp;T Wireless Reports Loss

Posted on: Saturday, 24 April 2004, 06:00 CDT

AT&T Wireless Services Inc., which is being acquired by Cingular Wireless LLC, had a first-quarter net loss of $58 million after reporting its first-ever drop in subscribers. The company withdrew its 2004 financial forecasts. The third-largest U.S. mobile phone carrier had a loss of 2 cents a share, compared with net income of $142 million, or 5 cents, a year earlier, the Redmond, Wash.-based company said in a statement. Analysts surveyed by Thomson Financial had forecast a profit of 1 cent. Sales increased 3.2 percent to $4.08 billion. A record number of subscribers defected to rivals such as Verizon Wireless as a software flaw kept AT&T Wireless from activating service and a new government rule allowed customers to take their phone numbers to another carrier.

Xerox sees sales rise

Xerox Corp., the No. 1 U.S. seller of office copiers, reported its biggest quarterly profit in more than four years, helped by lower costs and sales of new color copiers and digital printers. Shares fell after the company said sales of cheaper products hurt margins. First-quarter net income was $248 million, or 25 cents a share after preferred-stock dividends, compared with a year-earlier net loss of $65 million, or 10 cents. Sales rose 1.9 percent to $3.8 billion, the Stamford, Conn.-based company said in a release. Equipment sales rose for a fifth straight quarter after Chief Executive Officer Anne Mulcahy, 51, introduced lower-priced products. Xerox can sell equipment cheaply because it profits later from sales of ink, paper and services.

Sprint recombines stocks

Sprint Corp. on Friday recombined its wireline and wireless tracking stocks into a single common stock. Sprint, which announced plans to recombine the stocks Feb. 29, eliminated its PCS wireless tracking stock by exchanging it for shares of the FON stock that represents the company's traditional residential phone business and other "wired" services. Each share of the PCS tracker, created in 1998, was converted into one-half share of FON common stock. Shares of PCS closed Thursday at $9.56; shares of FON closed at $19.09. In trading Friday morning on the New York Stock Exchange, shares of FON were up 18 cents to close at $19.27. Some Sprint PCS shareholders have filed class-action lawsuits over the recombination, claiming the deal favors owners of FON shares. Plaintiffs originally sought to block the recombination, but later dropped that effort; they are still seeking damages.

Intelsat may entertain sale

Intelsat Ltd., the third-largest global satellite provider, said it may consider being sold following an initial public offering of as much as $500 million. Intelsat recently received preliminary "indications of interest" from possible acquirers or investors in the company, it said in a filing Thursday with the Securities and Exchange Commission related to the IPO. It wasn't more specific. The process has been suspended pending completion of the IPO by the end of June, Intelsat said. Intelsat's move comes as PanAmSat Corp., the biggest U.S. commercial satellite-operator, agreed this week to be acquired by leveraged buyout firm Kohlberg Kravis Roberts & Co. for $3.53 billion. Intelsat, which was founded in 1964 and transmitted video signals of the first moon walk in 1969, may be attractive for its cash flow, one analyst said.

Infineon eyes $1 billion expansion

Infineon Technologies AG, Europe's second-largest semiconductor maker, plans to invest $1 billion to expand a U.S. factory with technology that will boost production of memory chips used in personal computers and servers. The Richmond, Va.-based plant will be able to process 25,000 wafers a month using larger 300- millimeter technology once the first expansion phase is completed early next year, Infineon said. The Munich-based company said it will add 800 employees to the plant, boosting the workforce to 2,550. The expansion, which had been shelved in 2000 when the chip market slumped, is Infineon's first major investment since the surprise departure of Chief Executive Officer Ulrich Schumacher, who quit less than a month ago under supervisory board pressure.

NYSE seeks to list equity funds

The New York Stock Exchange sought regulatory approval in March to list new publicly traded funds formed by private equity firms, a month before Apollo Advisors LP became the first of nine to unveil plans to raise $5.2 billion from the public this year. The NYSE, the world's biggest stock exchange, asked the Securities and Exchange Commission in a March 5 filing for permission to list the so-called business development companies. The NYSE needs SEC approval because the firms lack the three-year operating histories required under exchange rules. The NYSE's eagerness to seek business from ventures with as little as $60 million in publicly traded shares underlines its push to expand its offerings amid trading and governance scandals and competition from all-electronic markets, such as the Nasdaq Stock Market, said John Coffee, a securities law professor at Columbia University.

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