BUSINESS BRIEFS
Productivity off sharply in last 3 months of year
Associated Press
WASHINGTON — Worker productivity, the key factor in rising living standards, slowed sharply in the final three months of 2007 as overall economic activity weakened considerably while labor pressures increased.
The Labor Department reported yesterday that productivity, the amount of output per hour of work, increased at an annual rate of 1.8 percent in the October-December quarter, down from 6 percent in the July-September period.
The slowdown reflected the fact that overall economic activity skidded to a near standstill in the final three months of the year, with the gross domestic product rising just 0.6 percent.
TIME WARNER VISION LAID OUT
NEW YORK — Time Warner Inc.'s new CEO, Jeff Bewkes, laid out his vision for changes at the media conglomerate yesterday, including dividing AOL's online access and advertising businesses and possibly spinning off the rest of the company's cable division.
Investors have looked to Bewkes, who took over in January, to dramatically restructure the company in hopes of reviving shares that have slumped 29 percent over the past 12 months.
Shares yesterday rose 31 cents, or 2 percent, to $15.71.
HOME BUILDER SINGING NEW TUNE
PHILADELPHIA — More than a year ago, the chief executive of luxury-home builder Toll Brothers Inc. thought the housing slump could be touching close to the bottom.
These days, the normally chipper Robert Toll is much grimmer.
Yesterday, Toll Brothers said home building revenue fell by 22 percent in the first quarter, its seventh consecutive quarterly decline. Toll said that despite historically low mortgage rates and falling home prices, a slowing economy could be spooking buyers.
INVESTORS DOWN ON CISCO GROWTH
SAN JOSE, Calif. — Cisco Systems Inc.'s second-quarter profit matched Wall Street's subdued expectations, but shares of the world's largest Internet networking supplier plunged on signs of a sales growth slowdown
The San Jose-based company's guidance of 10 percent sales growth in the third fiscal quarter fell below the 15 percent projection by Wall Street analysts.
The forecast disappointed investors, who viewed it as a sign technology spending will continue to weaken as companies gird for a possible recession.
BOND INSURER TO RAISE $750 MILLION
NEW YORK — Bond insurer MBIA Inc. said yesterday it plans to sell $750 million in common stock as it tries to maintain its crucial "AAA" financial strength rating.
MBIA will offer about 50.3 million shares of common stock — at about $14.91 per share — to raise the funds, which it will place in reserve to cover potential future claims.
Warburg Pincus, which has already directly invested $500 million in MBIA, will backstop the offering in exchange for preferred stock, covering shares not sold in the sale.
DILLER'S IAC LOSES $369.9 MILLION
NEW YORK — Barry Diller's IAC/InterActiveCorp lost $369.9 million in the fourth quarter, on a big writedown at its mortgage referral business, tax expenses and costs in anticipation of the proposed spinoff of four businesses.
The report yesterday came as Diller and Liberty Media boss John Malone are battling for control of the Internet conglomerate whose assets include the HSN home shopping network, Ask.com, Ticketmaster, Citysearch, Evite and LendingTree.
Liberty, a major IAC shareholder, has sued to halt the spinoffs. Diller said the spinoffs, initially planned for the second or third quarter, could be delayed by a couple months or more. Some analysts say the suits could derail the plan.
