19 Jan 05. LogicaCMG has given an upbeat assessment of trading with news that overall IT service revenues have increased and its closely-watched wireless division has returned to profitability. But investors were dismayed by news of disappointing trading in France and weakening margins in the Benelux region. Shares in the Anglo-Dutch software and services company, which have fallen nearly 43 per cent since last February, closed down 9¾p at 183¼ yesterday. Although the IT services business in the UK performed well, the company has struggled with trading at its overseas operations for the past few years. Germany has begun to stabilise, after six months of cost-cutting, and the business is expected to reach break-even this year. The company admitted yesterday that efforts to transform the French operations from low-margin commodity work to a higher value systems integration business had been slower than expected. Meanwhile, margins in the Benelux region, the company’s second-biggest market, had fallen as the company pursued bigger IT contracts, involving higher bidding costs. News was more positive in the wireless division, the leading provider of text messaging systems. The division returned to making a small profit, thanks to a pick-up in licence sales at the end of the year, ahead of the Christmas and new year peak in mobile phone messaging. The division has also saved some £4m through a cost-cutting programme involving the transfer of a number of staff to other parts of the business. (Source: FT)
18 Jan 05. Edward Breen, chairman and chief executive of Tyco, stands to make at least $200m from restricted shares and stock options. The shares and options have accumulated over 2½ years as part of his incentive compensation to restore the company’s fortunes after the alleged crimes of former chief Dennis Kozlowski. The package – disclosed on the day that Mr Kozlowski’s re-trial began in New York – highlights the lucrative incentives offered to executives who take on high-profile turnrounds. Mr Breen holds $47.2m in restricted shares, exercisable stock options worth $78.5m, and stock options not yet exercisable worth $72m, according to a proxy filing. The bonus assets are worth more today, as the proxy value is based on Tyco’s share price of $30.47 on September 30, the end of its fiscal year. The stock stood at $35.56 on Tuesday lunchtime. Not all of this money is Mr Breen’s to spend, as much of the restricted shares and options vest over many years to come. However, some compensation experts see his stock option awards as excessive. Tyco, they argue, was too generous on his arrival in 2002, awarding too many options and restricted shares with few tied to better performance.
14 Jan 05. The Boeing Company (NYSE: BA – News) announced it plans to recognize pre-tax charges totaling approximately $615m, or $0.48 per share, related to the U.S. Air Force 767 Tanker program and expenses incurred to end production of the 717. The charges will be incorporated in the company’s fourth-quarter and full-year 2004 results, scheduled to be released on Feb. 2, 2005. The charge related to the initial production of aerial refueling tankers for the U.S. Air Force is approximately $275 million pre-tax, or $0.21 per share, including expected supplier obligations. The charge, which is a result of the Company’s regular quarter- and year-end reviews, reflects Boeing’s updated assessment of securing the specific USAF 767 Tanker contract that was being negotiated, given the continued delay and now likely re-competition of the contract.Boeing remains firmly committed to the USAF 767 Tanker program and is ready to support its customer in whatever decision is made regarding the recapitalization of the nation’s current aerial refueling fleet. Boeing used its own money and received no government funding in development of the USAF 767 Tanker.
17 Jan 05. Intel announced a major reorganisation following a year of strategic blunders and missed deadlines ahe