) CEO Thomas Engibous and Chief Operating Officer Richard Templeton share an intense drive and a penchant for straight talk, and both have spent their entire careers at TI. In 1996, when Engibous was the surprise pick to take the helm after the sudden death of then-CEO Jerry Junkins, he made Templeton a top deputy. So there was hardly a stir on Jan. 15 when Templeton was picked to succeed Engibous, who is giving up the CEO title in May. Engibous will remain chairman of the board.
Templeton, 45, played a key role when Engibous revamped TI in the late '90s. Shedding underperforming businesses like defense gear and PCs, TI focused on chips for the hottest digital products. Today, they power 60% of the world's cell phones. As the chip industry shakes off its worst slump ever, analysts expect TI's revenues to rebound 20% this year and profits to more than double. If that happens, Templeton can look forward to an extended honeymoon. Now that Wall Street is operating near the bone following two years of cost-cutting and bad-loan write-offs, the rising stock market and continued economic recovery are paying off in spades. Banks and brokerages are getting a lift not only from a robust consumer-banking and credit-card business but also from a rejuvenated investment-banking market. Four of the largest U.S. banks, led by Citigroup (C
) and Wells Fargo, surprised analysts with strong fourth-quarter profits, bolstered mainly by consumer banking and credit-card growth. Citigroup's profit rose 96%, to $4.76 billion. That's the third-highest profit ever earned by a U.S. company. San Francisco's Wells Fargo saw fourth-quarter earnings jump 10%, to a record $1.62 billion, while Chicago's Bank One, which agreed to be bought for $58 billion by J.P. Morgan Chase (JPM
) on Jan. 14, earned $1.86 billion, up from a $387 million loss a year earlier. The specter of asbestos claims will likely haunt Honeywell International (HON
) for some time to come. On Jan. 19, the $23 billion industrial giant ended talks to sell its Bendix unit to bankrupt auto-parts maker Federal-Mogul (FMO
) when the two sides failed to agree on terms. That leaves Honeywell open to more than 70,000 outstanding claims against Bendix, which once used asbestos in making brake pads. Detroit's carmakers had long opposed the sale, having filed a suit four months ago to stop the deal on the grounds that it was a fraudulent transfer of liabilities. In the two days that followed, shareholders sent the stock hurtling down 3%, to close at 36.29. Profits are scarce in the car business. But General Motors (GM
) still earned $838 million, topping analysts' expectations. That's thanks to the auto maker's GMAC finance arm, which made $630 million in the quarter and $2.8 billion of GM's $3.2 billion in profits for 2003. The bad news: GM's auto business is still making meager profits. The auto business generated just $1.1 billion for the year, less than half what GM made selling cars in 2002. Vice-Chairman and CFO John Devine blamed retiree benefits and interest payments, which sucked $1.8 billion from GM's North American earnings last year. Devine says new models should push earnings to $3.7 billion in '04. The government of Canada is withholding payment on some contracts to Hewlett-Packard (HPQ
). As revealed in a Jan. 20 public filing by HP, Ottawa is auditing certain deals involving HP, Compaq, and the Canadian National Defense Ministry. According to the filing, the government believes it may have been overcharged. The main deal being scrutinized is a $76.5 million computer-services contract awarded to Compaq in May of 2000, according to a spokesperson for Public Works & Government Services Canada. HP didn't return phone calls seeking comment. -- Chipmaker Intel (INTC
) will double its annual dividend, to 4 cents a share.
-- HealthSouth says accounting fraud totals could reach at least $3.8 billion.
-- Labor concessions helped AMR (AMR
) reduce fourth-quarter losses to $111 million.
The price of Eaton (ETN
) shares surged 5.6%, to a one-year high of $121.41, on Jan. 21 after the industrial manufacturer reported a 70% increase in fourth-quarter profits. Eaton said its business units benefited from a recovery in capital spending, and further gains are likely in 2004.