Daily Briefing

DAILY BRIEFING

January 21, 2009

Glitch at Verizon knocks thousands off Internet

Several thousand Verizon customers in the Baltimore area were without Internet access for much of yesterday after a circuit board malfunctioned, a Verizon spokeswoman said. The glitch occurred during the late morning but was not caused by higher volume related to the presidential inauguration, according to spokeswoman Sandra Arnette. As of late afternoon, she said, technicians were still working to replace the board.

Lorraine Mirabella

CSX's 4th-quarter earnings fall 32%

NEW YORK : Railroad operator CSX says its fourth-quarter earnings sank 32 percent from a year earlier, mostly as the result of a sizable writedown on the value of a resort the company owns. The Jacksonville, Fla.-based company posted net earnings of $247 million, or 63 cents per share, compared with $365 million, or 86 cents per share, a year earlier. The 2008 period includes a charge of 27 cents per share related to the money-losing Greenbrier resort the company owns. Excluding the one-time charge, CSX Corp. earned 90 cents per share. Revenue rose 4 percent to $2.7 billion, helped by higher prices and fuel surcharges. Thomson Reuters says analysts had expected a profit of 91 cents per share, on average, on revenue of $2.71 billion.

Associated Press

Citigroup declares 1-cent dividend on common stock

NEW YORK : Citigroup is declaring a quarterly dividend of 1 cent per share on the company's common stock, all that is allowed under the federal government's $20 billion bailout of the financial giant in November. As a condition of the rescue, Citigroup Inc. cannot pay quarterly dividends to shareholders of more than 1 cent a share for three years unless it obtains consent from the three federal agencies - the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. The bank's last dividend payment, in November, was 16 cents per share, which was half of its 32-cent payout in the previous quarter.

Associated Press

IBM predicts strong 2009 profit; recent sales down

SAN FRANCISCO : IBM Corp. forecast significantly higher profits for 2009 yesterday than Wall Street expected, a sign that the company's focus on high-margin services and software contracts is paying off even while overall sales are slumping. Its shares leaped 4 percent in after-hours trading. The Armonk, N.Y.-based technology company predicted at least $9.20 per share in profit in 2009. Analysts surveyed by Thomson Reuters were expecting $8.75 a share. The rosy forecast came as IBM reported that fourth-quarter profit rose 12 percent, beating analyst estimates, while sales fell 6 percent, missing the consensus estimate. IBM's net income was $4.4 billion, or $3.28 per share, for the last three months of 2008.

Associated Press

FCC probes Comcast phone practices

PHILADELPHIA : Comcast Corp. is being investigated by the Federal Communications Commission over concerns that it is giving preferential treatment to its phone service at the expense of Internet voice services from competitors. In a letter to Comcast on Sunday, the FCC said it wanted Comcast to justify this "disparate treatment." Comcast has changed the way it handles Internet traffic after the FCC cracked down on its practice of delaying peer-to-peer file-sharing. The FCC said Comcast's latest regulatory filings had "omitted" the effects that its new network management technique would have on Internet voice services. Comcast is the nation's biggest cable TV operator.

Associated Press

Clear Channel cuts 1,850 jobs in radio, outdoor units

Clear Channel Communications Inc., the largest U.S. radio broadcaster, cut 1,850 jobs, or 9 percent of its work force, amid an advertising slump, six months after being taken private in a $17.9 billion buyout. The company, which owns three radio stations in Baltimore, eliminated jobs at its corporate, radio and outdoor units, according to a memo to employees yesterday from Chief Executive Officer Mark Mays. Private-equity firms Bain Capital Partners LLC and Thomas H. Lee Partners LP completed the acquisition of San Antonio-based Clear Channel in July, almost two years after first agreeing to buy the company. U.S. radio advertising spending, which dropped 9 percent through Sept. 30, probably declined further in the last quarter, according to Jon Swallen, senior vice president of research at New York-based TNS Media Intelligence.

Bloomberg News

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