Weyerhaeuser put to REIT test

Forest products

Weyerhaeuser, North America's largest lumber producer, may meet U.S. financial requirements to become a real estate investment trust, or REIT, as soon as next year.

"The REIT structure has a number of complex rules, and we don't meet them for 2008," Chief Financial Officer Patricia Bedient said Tuesday. "However, given the changes in our company, we believe there is a high likelihood that we may be able to meet the so-called asset and income tests required for REIT by 2009."

Federal Way-based Weyerhaeuser, under pressure from some shareholders to boost the value of its investments in timberland, said May 30 that conversion into a real estate trust wouldn't make financial sense until 2010 at the earliest. No decision has been made to become a REIT, even though the company is moving now to "preserve the option" for 2009, Bedient said.

Aerospace

Helicopter award expected this year

Executives at Boeing and Lockheed Martin said Tuesday they expect the Air Force to remain on schedule for awarding a disputed $15 billion helicopter contract, although they don't anticipate official word until the end of December.

Last week's cancellation by the Pentagon of a separate competition for a $40 billion aerial-refueling- tanker contract has elevated the Air Force's priority for awarding the combat, search-and-rescue helicopter deal as quickly as possible, according to company and service officials.

The deal to replace 141 aging helicopters has been on hold for the past two years after Boeing won it in November 2006. The award was protested by both Lockheed and Sikorsky Aircraft. The Government Accountability Office backed the losing bidders' protests, and called on the Air Force to reopen the entire competition.

Internet

Adobe profit slips, but good signs seen

Publishing-software maker Adobe Systems said Tuesday its profit fell 7 percent in its fiscal third quarter. But by the measures watched on Wall Street, earnings beat analysts' forecasts.

Investors also were heartened by positive signals from Adobe for the current quarter.

Adobe, based in San Jose, Calif., said sales of its Acrobat software and a diverse business have helped it weather a bad economy. For the three months ended Aug. 29, Adobe earned $192 million, or 35 cents per share, down from $205 million, or 34 cents per share, a year earlier.

Excluding one-time items, Adobe earned 50 cents per share, above Wall Street's expectations for 46 cents, according to Thomson Reuters.

Revenue climbed 4 percent to $887 million, beating the forecast of $877 million.

Adobe, which has a Seattle office, is launching the latest version of its Creative Suite software package next week.

Shares jumped $2.15, or 5.6 percent, to $40.29 in after-hours trading, after closing up 6 cents at $38.14.

Electronics

SanDisk rejects bid, says it's too low

SanDisk said Tuesday it had rejected a $5.85 billion takeover offer from Samsung Electronics after its board determined the deal was "inadequate in multiple respects."

SanDisk's shares shot up $7.81, or 52 percent, to $22.85 in after-hours trading after ending the regular session up 63 cents at $15.04.

Samsung, in turn, said it had reiterated its $26-per-share cash offer for Silicon Valley-based SanDisk.

In a letter to SanDisk's board, Samsung Chief Executive Officer Yoon-Woo Lee said SanDisk "continues to cling to unrealistic expectations on both its stand-alone market value and an appropriate merger price."

But SanDisk said the price undervalues the maker of flash storage and memory cards used in digital cameras, cellphones and other electronics.

South Korea-based Samsung, however, noted that its $26-per-share offer represents a 93 percent premium over SanDisk's closing share price of $13.46 on Sept. 4, the day before media reports of a possible deal surfaced.

Financial

Morgan Stanley surpasses forecast

Morgan Stanley said Tuesday that its core businesses continue to generate solid profits, as the No. 2 investment bank hurried to convince investors that it is withstanding the financial turmoil that has dramatically changed the face of Wall Street.

Although its fiscal third-quarter profit slipped 7 percent, the result surpassed Wall Street's expectations. Morgan Stanley reported strong performance in its core prime brokerage, commodities and equities businesses.

The New York-based investment bank — which reported results a day earlier than scheduled — earned $1.43 billion, or $1.32 per share, compared with $1.54 billion, or $1.44 per share in the year-ago period. Thomson Reuters said analysts expected earnings of 78 cents per share.

Revenue rose to $8.05 billion from $7.96 billion.

Shares fell slightly in after-hours trading after dropping 10.8 percent to $28.70 the regular session.

Financial

Goldman's quarter worst since IPO

Goldman Sachs, the world's largest investment bank, said Tuesday its third-quarter profit plunged 71 percent from a year earlier, its worst slump in profits since it went public in 1999.

The New York investment bank posted a profit of $810 million, or $1.81 per share, after paying preferred dividends compared with $2.81 billion, or $6.13 per share, a year earlier. Revenue for the three months ended Aug. 29 skidded 51 percent to $6.04 billion from $12.3 billion a year ago.

The results still beat Wall Street projections for $1.71 per share, according to analysts polled by Thomson Reuters. Revenue fell short of the $6.23 billion expected by analysts.

On Tuesday, the stock slid $2.49, or 1.8 percent, to $133.01 after sinking to a new 52-week low of $116.13 earlier in the session.

Retail

Home Depot is cutting prices

Home Depot is set to start cutting prices this week on as many as 1,200 items from trash bags to toilets as it kicks off its latest effort to boost anemic sales and win back customers who've ditched the home-improvement retailer for its competitors.

Prices will be cut between 5 and 50 percent — although the company couldn't say what the average reduction will be — on about one out of every 25 items found on store shelves.

The discounts will begin showing up in stores this week and will last at least through the next quarter as the Atlanta-based chain tries to retain its top spot.

Retail

Kroger sales up as more eat in

Kroger, which owns Fred Meyer and QFC stores, said Tuesday that its second-quarter profit rose 3.4 percent as a slowing economy prompted people to eat at home more often and try more store brands. The results sent the stock up 5 percent.

For the three months ended Aug. 16, Kroger earned $276.5 million, or 42 cents per share, up from $267.3 million, or 38 cents per share, a year earlier. Kroger reported second-quarter revenue of $18.1 billion, up nearly 12 percent.

Analysts surveyed by Thomson Reuters had expected earnings of 41 cents per share on revenue of $17.63 billion.

The company said sales at stores open at least five quarters, considered a key indicator of a retailer's strength, rose 4.7 percent excluding fuel, and 9.7 percent including fuel sales for the quarter.

Kroger shares rose $1.40, or 5.3 percent, to $27.99, near the center of their 52-week range of $23.39 to $30.99.

Retail

Best Buy spends, but revenue rose

Best Buy said Tuesday that its second-quarter profit slid 19 percent as it spent money to boost cellphone sales by completing the rollout of its Best Buy Mobile concept to nearly 1,000 North American stores.

Revenue rose, however, as consumers bought more flat-panel TVs, laptops and cellphones, ahead of forecasts.

The nation's largest consumer-electronics retailer earned $202 million, or 48 cents per share, for the three months ending Aug. 30. That's down from $250 million, or 55 cents per share, during the same period last year. Revenue rose 12 percent to $9.8 billion.

The profit came in below Wall Street forecasts, sending the stock down.

Best Buy shares fell $1.30, or 3 percent, to $42.40 Tuesday.

Financial

Chairmen named for Freddie, Fannie

The federal government has named chairmen to oversee mortgage-finance companies Fannie Mae and Freddie Mac, which were seized earlier this month.

The Federal Housing Finance Agency said Tuesday it named John Koskinen as Freddie Mac's nonexecutive chairman.

Koskinen, a corporate-restructuring expert, spent two years directing planning for the "Year 2000" computer conversion, and also worked as the District of Columbia's chief administrator.

The housing agency also named Philip Laskawy, formerly head of accounting firm Ernst & Young, to the same role at Fannie Mae.

Earlier this month, Herbert Allison was named the new chief executive of Fannie, and David Moffett the new CEO of Freddie as part of the government's takeover of the two huge mortgage-financing agencies. Fannie and Freddie own or guarantee about $5 trillion of the nation's outstanding mortgages, roughly half the nation's total.

Compiled from The Associated Press and Bloomberg News