Company S Stock

NEW YORK -- U.S. stocks rose yesterday as gains in shares of International Business Machines Corp. and Walt Disney Co. raised hopes that a slowing economy won't crimp profits as much as expected.Shares of IBM gained $1.125, to $90.25, after Lotus Development Corp. accepted the company's sweetened $3.52 billion cash buyout. The acquisition gives IBM control of a key communication software program and another $1 billion in annual sales."When you have $10 billion in cash and need a future, taking a chance on something like this is very smart," said Robert Torray, president of Robert E. Torray & Co., which owns about 1 million shares of IBM. "Having $3.5 billion in the bank doesn't do any good."

FTI Consulting Inc., an Annapolis-based consulting company in the hot field of forensic accounting, said yesterday that it will tap public debt markets for the first time by selling $300 million in notes. Company officials said the offering will provide more financial flexibility by allowing FTI to refinance bank debt, while analysts said it would put FTI in good position to make acquisitions. "I'd be surprised if we didn't see something before the end of the year," said David Gold, senior equity analyst at Sidoti & Co., a research firm in New York.

Fila Holding SpA yesterday reported that second-quarter earnings increased 127 percent as its sneaker and clothing lines continue to have strong appeal with consumers.The results were announced after U.S. markets closed, but investors had already driven up the company's stock -- up $10.625 to close at $91.25.The company said net income in the quarter ended June 30 was $25.9 million, compared with $11.4 million in the same period a year ago. Revenue rose 58.8 percent, to $322 million from $202 in the comparable quarter last year.

Microsoft Corp.'s surprise announcement last week that it plans to replace stock options with restricted stock grants in employee pay packages has revived a debate over how to best link employee compensation to the interests of company shareholders. Stock options have been sharply criticized as an undeserved ticket to vast riches for corporate executives focusing on quick increases in the bottom line. But compensation experts contend that replacing options with handouts of restricted stock is no guarantee that employees' interests will be any more aligned with those of investors.

In February, when a top New York analyst was asked about Robert N. Elkins, he answered in three words: "Elkins is king."What he was referring to was Dr. Elkins' successful reign as founder and chief executive of Integrated Health Services Inc., one of the fastest growing, most profitable companies in Maryland.As it turns out, though, Dr. Elkins' Midas touch didn't stop there. According to documents filed by 95 public companies in Maryland, Dr. Elkins has also been crowned king of the stock option.

In an effort to persuade skeptical investors that their stock is worth more than the going price, PHH Corp. announced yesterday that it would buy back as many as 1.7 million shares -- or about 10 percent of those outstanding."

NEW YORK -- A federal judge set a $500,000 bond yesterday for a former executive at a Maryland technology company who has been charged with manipulating stock option grants to allow top employees to lock in unlawful stock gains and exaggerated bonuses. Flanked by two attorneys and watched by her husband in the courtroom gallery, Carole D. Argo, 46, a former chief financial officer, president and chief operating officer of SafeNet Inc. in Belcamp, in Harford County, entered a not guilty plea in U.S. District Court in Manhattan on charges of securities fraud and conspiracy.

Legg Mason said Wednesday that it has agreed to a severance package for outgoing CEO Mark R. Fetting that will cost the Baltimore money manager about $4 million, including $2 million in direct payments. Fetting is stepping down as CEO and chairman Oct. 1. The newly disclosed separation agreement entitles him to $2 million in payments made over 15 months and allows him to keep 111,548 unvested restricted shares of company stock, which will vest under the same timetable as if he weren't leaving.

A Columbia-based biotechnology company said this week it received the world's first government approval to market a stem cell drug , in Canada. Osiris Therapeutics, founded in 1992, spent 17 years developing a stem cell therapy that offers anti-inflammatory and tissue-regeneration properties. The first treatment it has received approval for this week will help treat children who've received bone marrow transplants that their bodies have rejected. The condition, known as acute graft-versus-host disease, or GvHD,  is fatal to 80 percent of the children who contract it, the company said.  C. Randal Mills, president and CEO of Osiris, said in a conference call Friday morning that the company has spent the past eight years navigating clinical trials and regulatory paperwork in a mission to be the first approved stem cell treatment in the world.  “During the past eight years, we have not wavered from that mission,” Mills said.

T. Rowe Price Group Inc. reported yesterday record revenue and a 24 percent increase in first-quarter profit as the market gained momentum and investors poured more money into the Baltimore investment firm's mutual funds. The company's shares reached an all-time high on the news yesterday. Price had net income of $116.7 million, or 84 cents per diluted share, in the quarter that ended March 31, compared with $94 million, or 69 cents per share, in the year-earlier period. Revenue climbed 20 percent to $429.