Business briefs, November 2

Thursday, November 2, 2006

NATIONAL

CVS to buy Caremark Rx for $21.3 billion in stock

Drugstore operator CVS Corp. announced Wednesday it is buying pharmacy benefits manager Caremark Rx Inc. for about $21.3 billion in stock.

The deal, which the companies described as a "merger of equals," would create a $75 billion drug distribution powerhouse that can take on retail leader Wal-Mart's growing presence in generic drug sales, analysts said.

Under terms of the deal, Caremark shareholders will receive 1.67 shares of Woonsocket, R.I.-based CVS for each share of Caremark. CVS shareholders will own 54.5 percent of the combined company, and Caremark shareholders will own 45.5 percent.

The board of directors will be split evenly.

The new company will be called CVS/Caremark Corp. and will be headquartered in Woonsocket. The pharmacy services business will remain based in Nashville, Tenn.

CVS has no pharmacies in Colorado.

Several carmakers post gains in October sales

General Motors Corp., Toyota Motor Corp., Ford Motor Co. and Nissan Motor Co. said U.S. sales of cars and trucks rose in October, while DaimlerChrysler AG reported a decline.

GM's sales were up 17 percent for its second monthly gain of the year. Toyota's sales climbed 9.2 percent, its 17th consecutive monthly rise. Ford's increased 8.1 percent, and Nissan's were up 3.9 percent. It was Nissan's first increase since February and Ford's second consecutive monthly advance after seven declines.

DaimlerChrysler sales dropped 1.6 percent.

ITunes store launches expanded Latin section

Apple Computer Inc. on Wednesday launched iTunes Latino, a dedicated area within its U.S. online store for Latin music, videos, audiobooks and podcasts.

The iTunes store, the world's leading digital music outlet with more than 1.5 billion songs sold since its launch, had previously included Latin as a music genre, but company officials said customers were asking for more Latin content.

The new section features different music genres, including regional Mexicano, baladas y boleros and pop Latino, as well as Spanish-language and bilingual TV shows under a new deal with NBC Universal's Telemundo, the nation's second-rated Spanish-language network.

Time Warner reports rise in 3rd-quarter profit

Time Warner Inc., the world's largest media conglomerate, posted sharply higher third-quarter earnings Wednesday largely because of several asset sales and adjustments related to its deal to acquire cable systems from Greenwood Village-based Adelphia.

The New York-based company, which owns Time Inc., Warner Bros. and HBO, had earnings of $2.3 billion, or 57 cents a share, vs. $853 million, or 18 cents a share, in the quarter last year.

Revenues rose 7 percent to $10.9 billion from $10.2 billion.

Analysts polled by Thomson Financial had been expecting revenues of $11.1 billion.

AOL paid subscribers down; ad revenue up

AOL saw its largest quarterly drop in paying subscribers, while traffic to the company's free, ad-supported Web sites held steady.

The accelerated decline had been expected following AOL's announcement in August that it would give away AOL.com e-mail accounts instead of charging for them.

The company lost 2.5 million U.S. subscribers in the July-September period, compared with drops of fewer than 1 million subscribers a quarter since AOL hit its peak of 26.7 million four years ago.

That leaves 15.2 million paying subscribers in the United States, nearly two-thirds for dial-up access.

As a result, subscription revenues declined 13 percent to $210 million, though that was partly offset by a 46 percent boost in advertising revenue to $151 million over the same period last year, Time Warner Inc. reported Wednesday.

Online ads now account for 24 percent of AOL's total revenues, compared with 16 percent a year ago.

MasterCard profit soars 82% in first full quarter

MasterCard Inc., owner of the nation's second-largest credit-card brand after Visa USA, said Wednesday its third-quarter profit climbed 82 percent.

It was its first full quarter as a publicly traded company. MasterCard sold stock to the public for the first time in May.

Purchase, N.Y.-based MasterCard said it earned $193 million, or $1.42 a share, for the three months ended Sept. 30 vs. $106.1 million, or the equivalent of 79 cents a share, a year earlier when MasterCard was a private entity owned by the nation's largest banks.

Excluding special items from the third quarter last year, net income was up by 38.8 percent.

Revenue rose 13.9 percent to $902 million from $791.6 million a year ago.

The results beat the consensus estimate of $1.07 in earnings a share on $871.2 million in revenue, according to a Thomson Financial poll.

LOCAL

Continuum adds moving walkway to proposal

The development team of Continuum/East West Partners on Wednesday said it added a covered moving walkway to its proposal to redevelop Union Station. The walkway would link light rail and commuter rail and regional bus service.

The team is competing for the $1 billion redevelopment with a group called Union Station Partners, headed by Cherokee Partners and the development arm of Hensel Phelps.

The Continuum plan calls for light rail to be above ground, which makes it farther from Union Station, while Cherokee's more expensive plan calls for light rail to be buried underground.

Downtown merchants launch promotion

Downtown Denver's merchants are launching the second Win Downtown campaign, an effort to draw shoppers downtown for the holidays and bring more awareness to the shopping district.

Participants can register at www.WinDowntownDenver.com to win one of six prize packages between Nov. 15 and Dec. 20.

Each package is worth at least $1,000 and includes products, meals and hotel stays.

Wild Oats to pay acting CEO $50,000 a month

As Boulder-based Wild Oats Markets Inc.'s board of directors searches for a permanent replacement for ex-CEO Perry Odak, it will pay acting CEO Gregory Mays $50,000 a month, plus 20,000 restricted stock options, the company said in an Securities and Exchange Commission filing Wednesday.

The deal also covers "reasonable expenses," including housing and travel costs for Mays, who also is the board chairman.

Once a permanent CEO is named, the board may grant Mays an additional 10,000 restricted stock options, the filing says.

Former GE exec joins Quark as president, CEO

More than a year after its CEO resigned abruptly, Quark Inc., a Denver maker of publishing software, named a former General Electric executive as its new chief executive and president.

Before joining Quark, Raymond Schiavone was CEO of Arbortext Inc., a company involved in XML-based authoring and automated publishing software. Before that he was president of TPN Register, a GE and Thomas Publishing joint venture.

In June 2005, Kamar Aulakh's unexpected exit as Quark's CEO fueled speculation he had been fired.

After Aulakh's departure, Linda Chase, a Quark senior vice president, was named interim president while the company hunted for a new CEO.

Chase will remain at Quark as senior vice president of enterprise products.

Financial firms partner on school program

A coalition of financial institutions has partnered with Denver Public Schools to launch "Banking on Our Future Denver," described as a "financial empowerment program."

Bank of the West is lead sponsor of the program, which aims to provide year-round financial education for children ages 9-18 at no cost to school districts nationwide.

Los Angeles-based Operation Hope runs the program nationwide. Local partners Alliant Credit Union, Bank of the West, Citywide Banks, Denver Community Federal Credit Union, Edward Jones, 1st Bank, Regis University, State Farm, U.S. Bank and Wells Fargo contributed volunteers to the launch Wednesday.

ECONOMY

Less spent on construction in September

Construction spending fell in September as home building declined for a sixth consecutive month, the longest stretch of weakness in residential construction in more than a decade.

The Commerce Department said that spending on construction projects dropped by 0.3 percent to a seasonally adjusted annual rate of $1.196 trillion in September. It was the biggest decline since a 0.7 percent fall in July and the fifth month in which overall construction activity has either declined or been flat.

Housing was down 1.1 percent in September, reflecting the steep slump in this once booming sector as builders have slashed construction plans in the face of slumping sales demand.

• The nation's manufacturing sector expanded at its slowest clip in more than three years in October, a trade group said Wednesday.

The Institute for Supply Management, based in Tempe, Ariz., said its manufacturing index registered 51.2 in October, below September's reading of 52.9.

It was the index's lowest level since June 2003 and reflected persistently high raw material prices and a decline in new orders, according to data provided by purchasing and supply executives. Analysts had been expecting a reading of 53.

A reading of 50 or more indicates expansion, while below 50 shows contraction. The October figure represented the 41st consecutive month of growth.

The ISM's employment index grew to 50.8 in October from 49.4 in September. The prices paid index fell to 47 in October from 61 in September. The new orders index fell to 52.1 in October from 54.2 in September, while the customers' inventories index rose to 52 from 49 in September.

THIS JUST IN . . .

• For the third consecutive year, Lakewood-based Video Professor has received an Aurora Award recognizing excellence in film and video production.

• SilvaGas Corp. has signed an agreement with Denver-based Joule Asset Advisors to develop projects that employ the SilvaGas biomass gasification system.

• Denver-based Plexus Capital said Neil Stenbuck, Caroline McClurg and Charles Bybee have joined the firm.

• Habitat for Humanity of Metro Denver hired Marcia Ashton as individual gifts officer.

• Broomfield-based Level 3 Communications' Content Markets Group said it has been selected by Pandora to support the company's Internet streaming radio service.

• Fort Collins-based InViragen has entered into an agreement with Shantha Biotechnics of Hyderabad, India, for the manufacture of InViragen's proprietary dengue vaccine for human clinical trials.

• Islands Fine Burgers & Drinks opened its first Colorado restaurant at Boulder's Twenty Ninth Street.

• Denver-based id-Confirm Inc. hired Robert Speth as the company's vice president of business development.

• Lakewood-based BuilderMT, which provides production management software for residential home builders, said it has launched a Web-based service, Trade Portal, that allows a builder to share real-time workflow data with subcontractors and trading partners.

•At this year's W3 Awards in Los Angeles, Snowmass Village was honored three times for outstanding design work on the Web.

Compiled from News staff, The Associated Press, Bloomberg News, Scripps Howard News Service.