Business Briefs

Reported by Star-Bulletin staff & wire

Thursday, August 14, 1997

Thirty-year mortgages
up slightly to 7.54%

WASHINGTON -- The average rate on 30-year mortgages rose to 7.54 percent from 7.46 percent last week, according to a weekly survey by the Federal Home Loan Mortgage Corp.

Fifteen-year home loans inched up to 7.07 percent from 7.00 percent. The average rate on one-year adjustable mortgages also edged higher, to 5.56 percent from 5.53 percent last week, according to the agency, which buys mortgages from lenders and packages them into securities for resale to investors.

A year ago, the rate on 30-year loans averaged 7.88 percent, 15-year mortgage rates stood at 7.39 percent and adjustables were 5.81 percent.

Isle air-ambulance firm
obtains loan guarantee

Pacific Air Ambulance Inc., a provider of interisland emergency air ambulance services, has won a U.S. Department of Agriculture guarantee for a $1.36 million loan from Bank of America so that it can complete a buyout from its mainland owner.

Doing business as Hawaii Air Ambulance, the company has been operating since 1980 and flies five specially equipped Cessna aircraft.

The loan is from the bank's Community Development Bank in Walnut Creek, Calif., and the loan guarantee is from the USDA's rural development office in Hilo.

Kmart has 5th straight
profitable quarter

TROY, Mich. -- Kmart Corp.'s fiscal second-quarter earnings rose 35 percent on lower costs and increased sales of foods and goods for the home, its fifth straight quarterly profit after several years of losses.

The retailer said profit from continuing operations rose to $31 million, or 6 cents a share, from $23 million, or 5 cents, a year earlier. That beat the 4-cent average estimate of 16 analysts polled by IBES International.

Chairman Floyd Hall has focused on groceries and diapers to attract more shoppers and added name brands and Martha Stewart goods that carry higher profits.

Kmart, though, hasn't figured out how to sell more women's clothing, a key piece of Hall's strategy. Steep markdowns to clear out hip styles that older customers shunned reduced the retailer's gross margin to 21 percent of sales from 22.3 percent.