Daily News from New York, New York on April 25, 2002 · 41
Get access to this page with a Free Trial

A Publisher Extra Newspaper

Daily News from New York, New York · 41

Publication:
Location:
New York, New York
Issue Date:
Thursday, April 25, 2002
Page:
41
Start Free Trial
Cancel

fjz-nz Hasdcq may mc!:o a b:d for London exchange - Page 42 - 4 AMAZ0N.COM $2.73 $16.79 QUALCOMM $1.04 $33.29 EXXON MOBL $1.05 $40.30 MICRON TECHNOLOGY $2.09 $27.30 MERRU LYNCH - $2.49 $44.65 HUON HOTELS $1 $17.01 grow 5 to 9 this year, down from earlier forecasts of 8 to 12 growth. ' - The reason: a steep decline in ,ad sales at Internet division AOL. "Online advertisement is a disappointment," said AOL Trnie Warner CEO-elect Dick Parsons. " ' Parsons recently shipped off AOL Time Warner co-chief oper-ating officer Bob Pittman to fix the ailing Internet company. Parsons . said he's confident AOL will, begin to turn the corner in the second half of the year. But analysts remain skeptical. ; Sanford Bernstein's Tom Wolz-ieh told AOL honchos, "the fear has been that there's a cliff you are facing. The deals you cut be- . fore the merger are expiring and there's nothing to take their place." There were some bright spots in the quarter. The company beat analysts' expectations, with its operating profits rising 3. The film studios , soared -thanks to- "Harry Potter" and "Lord of the Rings" as did Time Warner's cable systems. And for the first time in recent memory, inusic giant Warner Music Group posted a 2 profit rise. r. 1 Dick Parsons, about to take over AOL Time Warner, sees rebound in second half of '02. In a reassuring note to investors, Parsons said there were no immediate plans to buy out either AT&T, its partner in Time Warner Entertainment, or its cable partner Newhouse. Investors have worried that those deals would severely tax the company's balance sheet. Meanwhile, at No. 2 entertainment giant Vivendi's annual meeting in Paris, CEO Jean-Marie Messier was booed and heckled by crowds outside with French riot police patrolling the streets. Throngs of protesters demanded Messier's resignation, following a 40 drop in Vivendi stock since the beginning of this year. Furious shareholders were quick to vote down a stock option plan that could have made - Messier and his management - team" even richer. Still, a member of the Vivendi board of directors told the shareholder crowd that the board fully backs Messier and his strategy - Investors blame the cocky former investment banker for loading up the former utilities company with debt over the past two years as he snapped up media giants Seagram the home of Universal Studios and Universal Music Group and Canal Plus. Last year, Vivendi was forced to take massive write-offs on those deals, leading to the biggest loss ever recorded in France. v Messier's also getting slammed for firing Pierre Les- : cure, a French cultural icon who headed Vivendi's money-losing OPERATING LOSSES In S billions $1.4 2001 I $S4J2 2002 REVENUES In $ billions $9.1 $9.8 2001 2002 60 AOL Time Warner A A .1- si... 11 f"vrv I ,1a r n 42 I . . r 1 YESTERDAY fv:'Uf".-7r---.li $19.30 - I 1 ' l Ak cents $32.39 I '; VV 1 24 ' I Jan- 2001 fl fc 15 UW 'MM - Pay-TV division Canal Plus. Messier did offer a rare piece of good news yesterday, with Vivendi's media division posting better than expected quarterly profits. Boosted by blockbusters like Universal's "A Beautiful Mind" Vivendi's media division pumped up operating profits by 37. But its music company hit a sour note with revenues down 6 and operating profits down 24. "These first-quarter results are the hard facts," Messier told the crowd. "We have a winning strategy." AsirsGfli noti ff "foes By ERIC HERMAN DAILY NEWS BUSINESS WRITER Troubled accounting firm Arthur Andersen won't occupy an office tower under construction in Times Square, according" to an executive for the building's developer. "They will not be occupying the space," Boston Properties CEO Ed Linde said yesterday. Many in the real estate industry" speculated that Andersen wouldn't move into the 47-story building, now rising on 42nd Street, between Broadway and Seventh Ave. ' Though a deal releasing Andersen hasn't been reached, "It is in both our interests to work out a fair and equitable termination," Linde said. Boston Properties officials declined to comment on whether Andersen would pay to get out of its lease. An. Andersen spokesman also declined to comment. (Boston Properties chairman Mortimer B. Zucker-man also is chairman and co-publisher of the Daily News.) Two years ago, Andersen a flourishing Big Five accounting firm signed a lease for half of Boston Properties' 1.2 million-square-foot office building at the southern end of Times Square. Real estate sources said the lease ran for 20 years and cost about $55 per square foot at the outset. Then came the Enron scandal, bringing Andersen a criminal indictment and driving it to the brink of bankruptcy. Andersen has lost more than 230 clients and will cut 7,000 employees to save money. In recent weeks, Boston Properties executives said Andersen might not occupy all of the 550,000 square feet it had leased and that other potential tenants had expressed interest. The building is set for-completion in late 2003. Yesterday's announcement frees Boston Properties to market the entire block of space to a large tenant, analysts said. "The fact that Boston Properties is in discussions with Andersen about releasing the space is very positive," said Banc of America Securities' Lee Schalop. "If this happened a year from now, they wouldn't have time. to re-lease the space before the completion date." Most analysts and brokers predicted Boston Properties would be able to find a tenant for the Andersen space by the time the building is finished. - "It's an extremely well-located building, and they have time and a terrific asset on their side," said Anthony Paolone, an analyst at CIBC World Markets. Linde said Boston Properties has "had serious discussions with a handful of potential tenants" seeking 150,000 to 250,000 square feet. . "There's even preliminary interest from a tenant who might occupy the entire building," he said. Still, in a tenants' market, some speculated that Boston Properties would not be able to match the rents it secured from Andersen. "We expect them to get a lower yield on the development," said Salomon Smith Barney analyst Jonathan Litt. "r " - -. - vj r f. :-y '--4 '-t'y 3 SI IV Pi- Arthur Andersen would nave occupied half of new Boston Properties office tower. Nasdaq falters as economic recovery slows The Nasdaq plunged to its lowest level since Halloween, as the Fed and housing reports pointed to a subdued economic recovery. The economy is improving after sliding into recession last year, but concerns remain about the pace of the recovery, the Fed said in its "beige book." The labor market is "slack" and manufacturers' plans to invest in new equipment are "limited," the central bank said in its summary of conditions across the country. Sales of new homes fell 3.1 in March, following a strong 6.2 rise in February. New profit reports also failed to improve investor spirits. AT&T blamed falling long-distance sales, accounting changes and a slide in investment values for a loss of $975 million, or 28 cents a share, vs. a loss of $ 192 million, or 10 cents, a year ago. Others posting big losses included Qualcomm and Xerox. The Nasdaq sagged 16.95 points to 1,713.34, its sixth straight losing session and its lowest close since Oct. 31. The Dow fell 58.81 to 10,030.43. 3 T3 J1 K) O O to

What members have found on this page

Get access to Newspapers.com

  • The largest online newspaper archive
  • 20,900+ newspapers from the 1700s–2000s
  • Millions of additional pages added every month

Publisher Extra Newspapers

  • Exclusive licensed content from premium publishers like the Daily News
  • Archives through last month
  • Continually updated

Try it free