Business Briefs

Reported by Star-Bulletin staff & wire

Monday, September 15, 1997

Win98 delay hits Microsoft shares

Bloomberg News

REDMOND, Wash. -- Microsoft Corp. shares fell about 5 percent after the software company confirmed that it will delay the release of Windows 98 until the second quarter of 1998.

Shares of the Redmond, Wash.-based company fell $6.56 to $131.371/2 in late trading of more than 16 million, twice the three-month daily average of 7.6 million.

Windows 98, the updated version of the Windows 95 operating system, was originally slated for release in the first quarter of 1998. Microsoft wanted Windows 98 to be compatible with its older Windows 3.1 operating system as well as with its more recent Windows 95, so the company decided to delay Windows 98, spokesman Ed Suwanjindar said.

"I view this as a real overreaction," said Esther Schreiber, an analyst at Credit Suisse First Boston. Windows 98 doesn't have "a huge upside revenue potential," because the product wasn't a corporate release. She said analysts didn't expect Windows 98 to affect the company's earnings significantly.

Kodak's stock falls
after profit warning

ROCHESTER, N.Y. -- Eastman Kodak Co. said falling profits this quarter and this year will force the company to eliminate money-losing units as arch rival Fuji Photo Film Co. grabs more of the U.S. photographic film market.

The company made its announcement after the stock market closed today. In after-hours trading, its shares fell $5.50 to $60.

Kodak said its third-quarter profit will be "significantly lower" than a year ago if business in September doesn't improve from a weak July and August. For the year, operating profit could be as much as 25 percent below last year's results, the company said.

Kodak President Daniel Carp also said Fuji's price cuts continue to erode the company's share of the U.S. film market, and that Kodak may be forced to cut prices to fight back.

IBM sells cheaper PCs;
cuts product line

NEW YORK -- Following similar moves by rival PC makers, IBM today cut the number of personal computer models it sells and shaved prices, starting at $1,000 instead of $2,000.

At the same time, IBM is streamlining distribution to cut costs. It will limit sales of Aptiva machines to the nation's six largest computer retailers, which traditionally sell 80 percent of its consumer machines, and sell Aptivas in only 22 countries instead of 102.

Computer makers are trying to stay profitable while keeping pace with a sharp drop in PC prices this year. Major makers such as Compaq Computer Corp. and Packard-Bell-NEC Inc. now sell fully equipped machines for less than $1,000.

International Business Machines Corp. is working with the retailers to reduce their stocks of computers, trying to avoid the practice of compensating stores for models that don't sell quickly.

Westinghouse unit
going for $2.5 billion

PITTSBURGH -- Westinghouse Electric Corp. is selling its Thermo King mobile-refrigeration company to the industrial products maker Ingersoll-Rand Co. for $2.56 billion.

The sale agreement announced today comes in advance of Westinghouse's planned splitup this fall into a media company led by its CBS division and an electric power systems concern.

The media company will be named CBS Corp. and will be based in New York, while the electric power system company will be called Welco and based in Pittsburgh.

Minneapolis-based Thermo King is being included with the media company, and the sale is expected to be completed by the end of the year. Ingersoll-Rand, based in Woodcliff Lakes, N.J., would assume about $40 million in pension liabilities associated with Thermo King's employees.

In other news . . .

NEW YORK -- Berkshire Hathaway Inc. has been a big buyer of bonds in the past month, the Wall Street Journal reported today, citing traders familiar with the transactions. The paper said Berkshire's buying took place in the five-week period that ended just over a week ago. The traders estimate Berkshire, run by renowned investor Warren Buffett, bought nearly $10 billion face amount of bonds at a cost of just over $2 billion, the paper said.