BUSINESS BRIEFS
Morgan Stanley tops expectations
Advertiser News Services
NEW YORK — Morgan Stanley, one of the world's biggest investment banks, reported a lower first-quarter profit yesterday, but strong stock and bond trading pushed its results above Wall Street projections.
Its shares rose $0.59, or 1.38 percent, to $43.45 in final trading, following a 17 percent gain in Tuesday's market rally.
The company said it earned $1.53 billion after preferred dividends, or $1.45 per share, down 42 percent from $2.66 billion, or $2.17 per share, in the year-ago period. Revenue fell 17 percent to $8.3 billion from $10 billion a year earlier.
But the lower results easily topped analysts' expectations for a profit of $1.03 per share on $7.19 billion of revenue, according to Thomson Financial.
VISA SHARES SOAR AFTER IPO OFFERING
SAN FRANCISCO — Catapulted by the biggest IPO in U.S. history, Visa Inc. shares soared more than 28 percent in their stock market debut yesterday as investors bet an accelerating shift to electronic payments will enrich the world's largest processor of credit and debit cards.
After being priced above expectations at $44 per share in an initial public offering that raised nearly $18 billion, Visa shares climbed to $56.50 in final trading on the New York Stock Exchange. The run-up gives the San Francisco-based company a market value of about $50 billion.
The fervor reflects investors' view that Visa is in a lucrative position as more people rely on its electronic network to make payments instead of using cash and checks.
FANNIE, FREDDIE RESTRICTIONS EASED
WASHINGTON — The government yesterday relaxed capital requirements at Fannie Mae and Freddie Mac as part of a plan to quickly inject an additional $200 billion of financing for home loans.
The initiative, which will require Fannie and Freddie to raise substantial funds, is part of a broader government strategy to ease a credit crisis that has made it difficult for consumers and businesses to borrow, and spread fear throughout global financial markets.
The Office of Federal Housing Enterprise Oversight, which oversees the government-sponsored companies, said the mandatory cash cushion for Fannie and Freddie — now nearly $20 billion for the two — will be reduced by a third under the new plan. The goal is to free up money to help new home buyers take out loans and to help existing homeowners refinance into more affordable mortgages.
GENERAL MILLS PROFIT RISES 61%
MINNEAPOLIS — General Mills Inc. said yesterday its profit climbed 61 percent in the third quarter as strong demand and higher prices led to a big rise in sales.
The earnings for the maker of Cheerios and Wheaties cereals, Progresso soups and Yoplait yogurt were above Wall Street expectations and its shares rose 1.2 percent yesterday.
The company said that cost-cutting efforts, in addition to price increases, were offsetting higher input costs and protecting profit margins.
The cost of grain has affected a number of companies, especially those that make cereals.
DELTA, NORTHWEST MERGER HITS SNAG
MINNEAPOLIS — The chairman of the Delta Air Lines pilots union yesterday rejected an offer by Northwest Airlines pilot leaders to settle their seniority integration conflict through arbitration, making it unlikely that a Delta-Northwest merger will be proposed in the coming weeks.
Lee Moak, who leads the Delta branch of the Air Line Pilots Association, said in a statement to the Minneapolis Star Tribune that "there will be no binding arbitration."
His response came hours after the arbitration option was raised by Northwest pilot leaders in a memo to their pilots. For a month, an agreement to blend pilot seniority lists was the only obstacle to the announcement of a merger in which Delta would acquire Northwest.
