Starbucks' same-store sales rise 10 percent

Starbucks, the largest U.S. coffee-shop chain, said September sales at stores open more than a year rose 10 percent, the biggest gain in 10 months.

The news, released after the close of regular stock trading yesterday, pushed the Seattle-based company's shares up $2.14, or 4.3 percent, to $49.81 in after-hours trading.

Starbucks said total revenue in the five weeks through Oct. 2 rose 4.5 percent to $653 million.

"We are very pleased by the double-digit same-store sales growth in September, but we expect comparable-store sales growth to return to our longer-term 3 to 7 percent target range in October," said Chief Financial Officer Michael Casey.

Lockheed partner in bomb contract

Boeing and Lockheed Martin are teaming to compete for a small-diameter- bomb contract from the Air Force valued at as much as $2.7 billion.

Boeing, the prime contractor, already has developed a small-diameter bomb while Lockheed has developed the "seeker" technology to enable it to hit moving targets, Lockheed spokesman Don McClain said yesterday.

The Air Force reopened the program for competition after the Government Accountability Office in February determined the original award to Boeing involved a conflict of interest. Lockheed Martin had protested the awarding of four contracts, including the bomb program, last October after Darleen Druyun, a former Pentagon official, told federal prosecutors she improperly favored Boeing for another contract.

Separately yesterday, Ryanair Holdings said it ordered nine Boeing 737-800s, exercising some previous options.

Boeing said the deal with the Irish discount airline is worth more than $500 million at list prices.

Drug granted "Orphan" status

ZymoGenetics announced yesterday that its experimental cancer drug, Interleukin 21, has been granted Orphan Drug status.

The designation from the Food and Drug Administration would give the Seattle biotech a monopoly on treatment of advanced or aggressive melanoma for seven years after the drug is approved. The federal program, which also carries tax incentives, is meant to stimulate research into treatments for diseases that affect 200,000 people or fewer in the United States.

Interleukin 21 is in early clinical trials for melanoma, a rapidly spreading skin cancer, diagnosed in about 60,000 people annually.

Microsoft

Portion of paper in Lee case released

Microsoft on Tuesday released a portion of a paper that became a key issue in the case of Kai-Fu Lee, an executive who left the company in July to work for Google. Microsoft is suing Lee and Google, citing terms of a noncompete agreement Lee signed in 2000. A trial in the matter is scheduled for January.

Microsoft accused Lee of handing Google proprietary information when he gave his new employer a copy of a paper, entitled "Making it in China," that he wrote in 2003.

The report contained suggestions for how companies could be successful in China, particularly when it comes to understanding the culture and traditions in the country. The company removed portions of the paper it claimed contained confidential information and released the paper after The Seattle Times requested that the document be made public.

Company makes two acquisitions

Seattle-based FusionWare, which builds software to integrate a company's hardware and software assets, announced two acquisitions yesterday.

FusionWare will acquire Pacific Software Associates, an IBM business partner in Hillsboro, Ore. Then, Pacific Software Associates, as a subsidiary of FusionWare, will acquire the assets of NCS Tek, an IBM business partner in Portland.

The acquisitions will help FusionWare expand its IBM business-partner operations in North America, which it already has done in Australia through a subsidiary.

In all, the company will have 50 employees, with 27 coming from Pacific Software, and $10 million in annual revenue.

$30 million raised in venture capital

Mforma, a mobile entertainment company that recently moved from Bellevue to San Francisco, said yesterday that it raised $30 million in a third round of venture capital.

The round was led by Institutional Venture Partners and included participation by Bessemer Venture Partners, Draper Fisher Jurvetson and General Catalyst Partners.

The money will be used to develop new products and expand operations and marketing. The company, with 700 employees, previously raised at least $63 million.

Launch date set for Nintendo DS

Redmond-based Nintendo of America said yesterday that it would launch its free wireless network for the Nintendo DS handheld player Nov. 14.

The company also announced some upcoming games that can be played on the network, including new titles in the "Animal Crossing," "Tony Hawk" and "Metroid Prime" lines.

The service can be accessed in a home with a high-speed Internet connection — although a separate access device may be needed — or at free hotspots outside the home.

Toyota buys stake in Fuji from GM

General Motors' decision to sell its 20 percent stake in Fuji Heavy Industries will help the troubled U.S. automaker streamline its business and raise cash, auto analysts said yesterday, but some questioned Toyota's purchase of GM's stake.

Toyota said yesterday it has agreed to buy an 8.7 percent stake in Fuji from GM for about $315 million. Fuji is a rival Japanese automaker that makes Subaru cars.

GM, the world's biggest automaker, plans to sell its remaining 11.4 percent stake and dissolve its alliance with Fuji, the companies said. GM said "there were not enough collaborative projects" to sustain the alliance and that it planned to find other partners and markets in the Asia Pacific region.

GM will make about $725 million from the sale of its entire share of Fuji, Merrill Lynch analyst John Casesa said in a note to investors. Once GM's sales are completed, Toyota, Japan's biggest automaker, will be the top shareholder in Fuji. GM bought its stake in Fuji five years ago for about $1.3 billion.

Overnight shipping rates going up in '06

FedEx will raise rates for overnight shipping by 3.5 percent beginning next year, the world's largest cargo airline said yesterday.

The higher rates come from a rate-chart increase of 5.5 percent coupled with a cut of 2 percent in the airline's fuel surcharge. That leaves a net increase felt by customers that is the largest since 2001, said company spokeswoman Lourdes Pena.

The higher rates "allow us to invest in our business," Pena said, adding that FedEx expects shipping volumes to remain strong.

Shipping rival UPS did not return calls yesterday about its plans.

1,900 jobs cut around world

Motorola is cutting 1,900 jobs at 29 different U.S. and international locations in an effort to improve operating efficiency, the company said yesterday.

The cellphone maker said the layoffs will be distributed over its facilities in more than 20 countries.

Compiled from Bloomberg News, The Associated Press and Seattle Times staff