IN BRIEF
MILWAUKEE
Midwest Air Group will consider buyout offer
Midwest Air Group, a regional airline that has fought a hostile buyout from AirTran Holdings for months, signaled Tuesday that it will consider the $389 million offer.
Midwest, operator of Midwest Airlines, announced a committee of its board of directors will start discussions with AirTran. The operator of low-cost AirTran Airways has long argued a combination of the two would create a strong, national carrier.
Midwest said its committee also will meet with other companies that have recently expressed interest in the airline. It did not name those companies Tuesday and was quick to caution that the discussions do not mean a buyout is imminent.
NEW YORK
Oil futures settle at record closing price
Oil futures settled at a record high above $78 Tuesday on expectations that crude inventories fell last week and reports of new violence in Nigeria, a large oil producer and key supplier to the United States.
Investors believe today’s inventory report by the Energy Information Administration will show that refiners drew down oil inventories as they continued to increase gasoline production last week, analysts said.
Light, sweet crude for September delivery gained $1.38 to settle at $78.21 a barrel on the New York Mercantile Exchange. That puts futures within striking distance of the intraday record, and beat the settlement price record of $77.03 set the same day.
LOS ANGELES
Hilton Hotels posts strong rise in earnings
Hilton Hotels Corp. reported strong earnings growth Tuesday in the second quarter as it prepared to be acquired by the Blackstone Group.
The worldwide hotel and resort company reported net income of $165 million, or 40 cents a share, for the quarter ended June 30, up from $144 million, or 35 cents per share, a year earlier.
Revenue rose 4 percent to $2.09 billion from $2.01 billion.
Excluding one-time items, earnings per share increased to 38 cents for the quarter, the company said.
DETROIT
Profit streak continues for General Motors
General Motors Corp. ran its string of profitable quarters to three on Tuesday when it announced second-quarter net income of $891 million that came largely from overseas operations.
GM’s second-quarter profit was a huge reversal from the $3.4 billion loss it posted in the same period last year.
The latest profit amounted to $1.56 per share for the April-June period, compared with a loss of $5.98 per share a year ago.
Revenue fell 13.2 percent to $46.8 billion from $53.9 billion.
NEW YORK
Mortgage investor’s stock price plunges
Shares of American Home Mortgage Investment Corp. plunged 90 percent Tuesday after the company raised fears it may become insolvent.
American Home shares, which were halted all day Monday, plummeted when trading finally began at about 2 p.m. EDT and ended the day at $1.04 a share, down from $10.47 on Friday before the company first disclosed the depths of its financial woes.
Keefe, Bruyette & Woods analyst Bose George said American Home Mortgage will probably go bankrupt, or at least be restructured into something leaving very little value for shareholders.
HOUSTON
Marathon Oil to buy Western Oil Sands
Marathon Oil Corp. is poised to break into Canada’s growing oil-sands market, announcing Tuesday it has agreed to buy Western Oil Sands for $5.5 billion in cash and stock.
Marathon also said its second-quarter earnings fell 11 percent from a year ago, when it benefited from a one-time gain. Its share price fell.
Shareholders of Western Oil, based in Calgary, Alberta, will get $3.6 billion in cash and $1.9 billion in Marathon stock. Marathon also will assume $650 million in Western Oil debt, valuing the total deal at roughly $6.2 billion.
TRENTON, N.J.
Johnson & Johnson will cut global work force
Johnson & Johnson said Tuesday it would reduce its global work force by up to 4 percent, or up to 4,820 jobs, to cut costs due to a slump in sales of its heart stents and its No. 2 drug, plus coming patent expirations for key drugs.
The health care giant, which employs about 120,500 people in 57 countries, said the restructuring — its largest ever — would bring pretax charges of $550 million to $750 million later this year, as well as other, unspecified steps besides job cuts.
Johnson & Johnson shares rose 43 cents, or 0.72 percent, Tuesday to close at $60.50.
LOS ANGELES
Apple’s iTunes store sells 3 billionth song
The iTunes Store said Tuesday it had passed a milestone, selling more than 3 billion songs since launching four years ago.
The milestone came just six months after iTunes, Apple’s online music download service, surpassed the 2 billion tracks-sold mark. The service launched in April 2003 and it took until February 2006 to sell its first 1 billion songs.
NEW YORK
Treasury prices higher as stocks stumble
U.S. Treasury prices ended on a strong note Tuesday as stocks fell late in the day on renewed concern over subprime woes.
At 5 p.m. EDT, the 10-year Treasury note was up $4.38 per $1,000 in face value, or 0.44 points, from its level at 5 p.m. Monday. Its yield, which moves in the opposite direction, fell to 4.75 percent from 4.81 percent.
The 30-year bond rose 0.78 points. Its yield fell to 4.91 percent from 4.96 percent.
