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The Honolulu Advertiser

Posted at 1:44 p.m., Friday, July 27, 2007

Business highlights: Second-quarter earnings surge

Associated Press

FORMER QWEST CHIEF GETS 6-YEAR JAIL TERM

DENVER — Joe Nacchio, the former Qwest Communications chief who was forced to resign during a multibillion-dollar accounting scandal, was sentenced to six years in prison today for illegally selling $52 million in stock while not telling investors that his telecommunications company faced serious financial risks.

Nacchio was ordered to forfeit the $52 million within 15 days. He received a maximum $19 million fine and two years' probation after he serves his sentence. Once a federal prison is chosen for him, he is to report within 15 days. He was denied bail while he appeals his conviction.

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CLEAR CHANNEL REVENUE UP IN 2ND QUARTER

SAN ANTONIO — Radio and billboard giant Clear Channel Communications Inc. earned $236 million during the second quarter, 19 percent more than the same period last year, as outdoor advertising continued to post strong growth.

Revenue from the company's radio business, which has faced stiff competition from satellite and digital music players in the last several years, continued to be nearly flat, but billboards and outdoor displays posted 12 percent gains, according to the earnings report released today.

The company said second-quarter revenue totaled $1.8 billion, up from $1.7 billion last year.

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CHEVRON PROFITS UP 24% FROM YEAR EARLIER

SAN RAMON, Calif. — Chevron Corp.'s profits soared to new heights in the second quarter, capping another round of astounding oil industry earnings that have piled up as high gasoline prices squeeze household budgets.

The San Ramon-based company said today that it made $5.38 billion, or $2.52 per share, during the three months ended June 30. That represented a 24 percent increase from net income of $4.35 billion, or $1.97 per share, a year earlier.

The performance by the nation's second-largest oil company outstripped the second-quarter showings of four other industry leaders that released their results earlier this week.

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OIL PRICES END NEAR RECORD LEVEL

NEW YORK — Oil prices closed over $77 a barrel, near an all-time high, today on technical buying and news of faster-than-expected economic growth.

At the pump, meanwhile, gas prices fell to their lowest level since late May.

The Commerce Department said today the economy as measured by the gross domestic product expanded at an annual rate of 3.4 percent in the second quarter, removing some of the concerns about economic growth that sent oil prices down yesterday in sympathy with Wall Street's plunge.

But some analysts discounted the economic growth numbers as a factor in today's rally, noting that the government data was released hours before prices took off.

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MEDICAL DEVICE MAKER MOVES TOWARD SPINAL BUSINESS

MINNEAPOLIS — Medical device maker Medtronic moved to jump-start its spinal business today, announcing a $3.9 billion purchase of spinal implant maker Kyphon.

Medtronic is offering $71 in cash for each Kyphon share, a 32 percent premium over yesterday's closing price. Kyphon shares jumped $12.92, or about 24.1 percent, to close at $66.60 today.

Directors of both companies unanimously approved the deal but they still need the nod from Kyphon shareholders and antitrust regulators in the U.S. and Europe.

Medtronic is best-known for its heart defibrillators and pacemakers, but its spinal business has been growing quickly, too.

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PRESCRIPTION COMPANY BETTERS MARKET EXPECTATIONS

TRENTON, N.J. — Medco Health Solutions Inc., the biggest U.S. prescription benefits manager, said today its second-quarter profit jumped 26 percent on increased dispensing of high-margin generic drugs and mail-order prescriptions.

The results handily beat Wall Street expectations; Medco raised its 2007 profit forecast and its shares initially rose nearly 3 percent.

Franklin Lakes-based Medco, which processes prescriptions for about 60 million Americans, said net income rose to $214.9 million, or 76 cents per share, from $170.9 million, or 56 cents per share, a year ago.

Excluding a 10-cent charge for the gradual writedown of contracts Medco received when it was spun off from drugmaker Merck & Co., second-quarter earnings were 86 cents per share.

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TV GUIDE PUBLISHER'S EARNINGS SURGE 42%

LOS ANGELES — Gemstar-TV Guide International Inc., publisher of TV Guide magazine, said today that second-quarter earnings surged 42 percent led by the company's interactive program guide business.

Second-quarter earnings rose to $20.8 million, or 5 cents per share, from $14.6 million, or 3 cents per share, in the second quarter of 2006.

Quarterly revenue jumped 17 percent to $155.6 million, from $133.3 million in the prior year.

The results beat the forecasts of analysts surveyed by Thomson Financial, who predicted earnings of 4 cents per share on revenue of $148.8 million.

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VOLKSWAGEN REPORTS STRONG FIRST-HALF PROFIT

FRANKFURT, Germany — Volkswagen AG, Europe's biggest automaker by sales, said today that its profit in the second quarter and first six months of 2007 soared on better-than-expected sales in Europe and China.

They also were boosted by cost-cutting efforts at home in Germany, the company said.

The Wolfsburg-based company earned 1.22 billion euros ($1.67 billion) in the second quarter, up 42 percent from the 859 million euros it posted a year earlier. Sales rose 6.2 percent to 28.21 billion euros ($38.71 billion).

In the first six months of the year, the company earned 1.96 billion euros ($2.69 billion), up 65 percent from nearly 1.2 billion euros a year earlier.