In Business This Week
Edited by John Protos
HEADLINER
Casey Martin: "I Think This Opens the Door"
Casey Martin's golf game has been in the rough lately. Playing on a minor-league tour this year, the former PGA player hasn't finished above 34th place.
But the 29-year-old who suffers from Klippel-Trenaunay-Weber syndrome, a rare circulatory disorder, just scored a legal hole-in-one. On May 29, the U.S. Supreme Court, in a 7-2 opinion, upheld a lower court ruling requiring that the PGA Tour allow him to ride a motorized cart during tournaments.
"I think this opens the door for people," says Martin, whose disease has left him with a withered right leg that makes walking nearly impossible.
Martin, an ex-teammate of Tiger Woods on Stanford University's golf squad, filed suit against the PGA Tour 3 1/2 years ago after being denied the right to use a cart. The Tour took the position that Martin would gain an unfair edge over other golfers if he was permitted to ride. With the court victory behind him, Martin can now move on to other business. Like lowering his scores.
By Mark Hyman
Tyco Just Got Bigger--Again
The man some consider the king of acquisitions--Tyco International (TYC
) Chief Executive Officer Dennis Kozlowski--is stepping up his already-frantic dealmaking pace. On May 30, Kozlowski announced an agreement to purchase C.R. Bard (BCR
), a Murray Hill (N.J.)-based manufacturer of medical products, for $3.2 billion. The acquisitive CEO has now closed or announced a record $22 billion worth of deals since the company's current fiscal year began on Oct. 1. The addition of Bard--which racked up revenues of $1.1 billion last year selling everything from cancer to specialty surgical products and services--will increase annual revenues of Tyco's booming health-care businesses to
$9 billion, up about $5 billion from last year.
Sun under a Revenue Cloud
High tech's mean season continues. On May 29, Sun Microsystems (SUNW
) preannounced weaker than expected fourth-quarter revenues. With sales between $3.8 and $4 billion, Sun is facing a hefty drop from $5 billion in last year's fourth quarter, when dot-com sales were still roaring. The newest culprit: slow demand for servers in Europe. The maker of servers and software for the Internet is also finding some customers are waiting to buy its upcoming higher-power family of UltraSparc III servers. Some analysts say Sun will feel its dot-com hangover for some time. "It'll be three quarters before we see positive revenue growth," says Salomon Smith Barney's John Jones Jr.
Conoco's Canadian Exposure
In the biggest takeover in Canada's oil industry, Conoco (COC.A) on May 29 agreed to buy fellow oil and gas concern Gulf Canada Resources (GOU
) for $6.3 billion in cash and debt. Thanks to high energy prices, cash-rich companies are rushing to build their portfolios while oil supplies are short. Houston-based Conoco, the nation's fourth largest oil company, says the Gulf Canada deal will boost its North American proved natural gas holdings by more than 50%, to 1.4 billion cubic feet per day. The deal, approved by both boards, is expected to close in the third quarter.
EMC: Another Tech Leader Falters
EMC (EMC
) announced on May 29 that it will cut 1,100 jobs, or 4% of its workforce, in the next few weeks because of slowing sales. The data storage leader had been one of the last remaining strongholds in the computer industry, even going so far as pledging to hire 7,000 new employees at the beginning of the year. Now some doubt EMC will achieve its 2001 sales growth target of 20%. Goldman Sachs analyst Laura Conigliaro says EMC's sales may grow just 14%, to $10.1 billion. EMC says the layoffs are part of a strategy to stimulate revenue growth.
Big Intel Chip Inside
In a bid to reinvigorate its profits in the face of slowing PC business, Intel on May 29 released its long-delayed Itanium microprocessor for high-end computer workstations and servers. Co-developer Hewlett-Packard (HWP
), as well as Dell Computer (DELL
) and IBM (IBM
) plan to use the 64-bit chip in graphic-arts and online-transactions processing to compete with market leader Sun Microsystems' server chip. Many analysts say sales are unlikely to improve the company's bottom line in the short term as customers wait for software applications to use with the chip. A few on Wall Street are even predicting Itanium-based machines could cause a price war.
Et Cetera...
-- President Bush rejected California's demands to impose electricity price controls.
-- American Airlines attendants vetoed arbitration, paving the way for a strike.
-- The Nasdaq said it may cut 5% of its workforce.
-- J. Howard Beales III, a tobacco critic, was named the Federal Trade Commission's consumer protection chief.
CLOSING BELL
RadioShock
Shares of RadioShack (RSH
) tumbled 18% on May 30, to $27, the day after the consumer-electronics giant warned that second-quarter profits would trail expectations. The Fort Worth-based company blamed slowing consumer sales of wireless phones and computers. Analysts say the sharp slowdown in wireless demand and stiff competition from rivals such as Wal-Mart Stores (WMT
) will keep RadioShack under pressure.
CLOSING BELL
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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