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The Honolulu Advertiser

Posted at 1:25 p.m., Tuesday, April 24, 2007

Business highlights: Apple, Toyota, AT&T, Vonage

Associated Press

CIVIL CHARGES FILED AGAINST EX-APPLE OFFICERS

SAN JOSE, Calif. — The Securities and Exchange Commission filed civil charges Tuesday against two former Apple Inc. officers over their alleged roles in backdating stock options. One of them immediately settled the case and cast some blame on Apple CEO Steve Jobs.

Former Chief Financial Officer Fred Anderson, 62, has agreed to pay about $3.5 million in fines and penalties to settle, the SEC said.

The case against former general counsel Nancy Heinen, 50, will proceed. Her attorneys have vowed to fight the charges.

The commission accused Heinen of participating in fraudulent backdating and altering company records to conceal the fraud. The charges were in connection with two large options grants that caused the company to underreport its expenses by nearly $40 million, the SEC said.

The grants in question were a February 2001 grant of 4.8 million options to Apple's executive team and a December 2001 grant of 7.5 million options to Jobs.

The SEC said it will not pursue any further action against Apple itself, partly because of the company's cooperation with the agency's probe.

PLUNGING HOME SALES REPORTED IN FEBRUARY

NEW YORK — The economy provided a sobering reminder Tuesday that consumers are jittery and the housing market is still a major cloud over growth.

In February, U.S. home prices fell the most in almost 15 years. Sales of existing homes plunged in March by the largest amount in nearly two decades. And consumer confidence in April crumbled to its lowest since August.

It was a hat trick of bad economic data that analysts said would trap the Federal Reserve between inflation pressures and tepid growth.

The poor economic data also offset the positive feeling investors were getting about better-than-expected first-quarter reports from the likes of International Business Machines Corp. and DuPont Co. The Dow Jones industrial average slipped in early trading before recovering in the afternoon, adding 34.05, or 0.26 percent, to 12,953.46.

The National Association of Realtors reported Tuesday that sales of existing homes plunged in March, reflecting bad weather and increasing problems from loans to people with poor credit.

TOYOTA BEATS GM IN SALES FOR FIRST QUARTER

TOKYO —For the first time ever, Toyota sold more vehicles globally in a quarter than General Motors, preliminary January-March figures show, the clearest sign yet that the Japanese company is on track to overtake its U.S. rival as the world's top automaker.

Toyota Motor Corp.'s success is fueled by robust demand for its reliable, fuel-efficient models, including the Camry, Corolla, Yaris and gas-electric hybrid Prius.

It also comes at a time when General Motors Corp., which lost $2 billion last year, has been forced to scale back production and cut costs in a bid to revive its sliding fortunes, even as it leads in China's booming market.

Final bragging rights as the world's top automaker — a title GM has held for 76 years — won't be decided until global vehicle production numbers get tallied for the full year.

But Tuesday's data show that Toyota is getting closer. The Japanese company sold 2.35 million vehicles worldwide in the first quarter, Toyota said, surpassing the 2.26 million vehicles GM said it sold in the period, according to preliminary figures.

AT&T DOUBLES PROFIT, SALES IN FIRST QUARTER

SAN ANTONIO — Telecommunications heavyweight AT&T Inc. reported Tuesday it doubled its profit and sales in the first three months of the year, primarily because of its completed acquisition of BellSouth.

Profit reached $2.85 billion, helped by the BellSouth acquisition and growth in wireless revenue. The earnings, which included $2.3 billion in acquisition-related charges and a $409 million gain from the sale of some assets, amounted to 45 cents per share for the period ended March 31. That was up from $1.45 billion, or 37 cents per share, earned by AT&T in the first quarter of 2006, when it had not yet acquired BellSouth.

First-quarter revenue rose 84 percent to $28.97 billion, up from a pre-merger tally of $15.76 billion in the same period a year ago.

Had BellSouth and AT&T been combined in the first quarter of 2006, they would have reported roughly the same amount of revenue at $28.9 billion, and net income of $1.98 billion.

SHARES RISE AFTER AMAZON.COM REPORTS PROFIT

SEATTLE — Web retailer Amazon.com Inc. said Tuesday its first-quarter profit more than doubled, sending shares sharply higher in after-hours trading. The company also raised its revenue outlook for the year.

Quarterly earnings rose to $111 million, or 26 cents per share, from $51 million, or 12 cents per share, during the same period last year.

Analysts polled by Thomson Financial had forecast a profit of 15 cents per share.

A $12 million reduction in Amazon's tax bite helped nudge results higher, as did a weak dollar against foreign currencies, which added about $5 million to the bottom line, the company's chief financial officer told reporters in a conference call.

Revenue rose 32 percent to $3.02 billion, surpassing Wall Street's expectation of $2.92 billion in sales.

COURT ORDER SIDES WITH VONAGE

WASHINGTON — Internet phone carrier Vonage Holdings Corp. won relief Tuesday from a potentially crippling court order that would have barred it from signing up new customers as punishment for infringing on patents held by Verizon Communications Inc.

The U.S. Court of Appeals for the Federal Circuit granted the stay of a trial judge's injunction on Tuesday afternoon, just hours after hearing arguments. A temporary stay had been issued earlier this month, but Tuesday's order will remain in effect throughout the appeal.

Vonage's battered stock price rallied nearly 30 percent after the decision, which allows it to keep signing up new customers while still using the disputed technology.

Verizon took solace in the fact that the appeals court set an expedited schedule for the appeal, with a hearing scheduled for June 25.

EUROPE'S 2ND-LARGEST OIL COMPANY SEES DROP IN EARNINGS

LONDON — BP PLC, Europe's second-largest oil company, reported a 17 percent drop in first-quarter earnings Tuesday on lower oil prices and declining production.

Net profit for the three months ending March 31 fell to $4.66 billion (3.43 billion euros) from $5.62 billion in the first quarter last year. Revenue declined 3 percent to $62.04 billion (46.7 billion euros).

BP was the first of the major European oil companies to report quarterly results, with most others also expected to record profit declines amid dwindling output and rising costs before a recovery in the second quarter. However, analysts said the results put BP at the bottom of the pack, particularly given its safety troubles in the United States.

Tony Hayward, the current head of exploration and production, has been charged with the task of reviving investor confidence in BP when he takes over as chief executive in the summer, replacing John Browne.