Amazon.com, the Internet retailer, reported its first quarterly profit outside the year-end holiday shopping season, with net income of $15.6 million for the third quarter. Despite the news, Amazon shares declined in after-market trading Tuesday, which market analysts said reflected concerns it may be overvalued after tripling this year.
Merck & Co. announced the layoffs of 4,400 employees, acknowledging it's on track for a second straight year of disappointing earnings. The Whitehouse Station, N.J., pharmaceutical giant said it expected to save at least $250 million a year via the move. Large-scale layoffs are rare in the industry.
Opening arguments were heard in a trial that could cost ChevronTexaco $1 billion for allegedly contaminating parts of Ecuador during oil drilling there in the 1970s and '80s. The case stems from a lawsuit filed on behalf of 30,000 people who contend that Texaco - which hadn't yet merged with Chevron - exploited weak environmental standards by storing oily waste in hundreds of open pits rather than injecting it deep underground. The plaintiffs are asking the company to pay for cleaning up the affected sites and for medical monitoring of people who drink water polluted by the drilling operations. In its defense, the company points to a 1998 certification by the Ecuadorean government that it spent $40 million to fulfill an agreement to clean up the area.
General Dynamics, the giant US defense contractor, has given up on efforts to merge with the European leader in that field, BAE Systems, the Financial Times reported. It said the main obstacle appeared to be BAE's insistence on keeping the North American electronics and defense- systems units it bought for $2.2 billion from Lockheed Martin Corp. three years ago. Last year, BAE and Boeing Co. explored a possible merger before the latter lost interest, the Financial Times said.
AT&T blamed two employees for an accounting error that led it to understate expenses by $125 million in 2001 and 2002. The disclosure Tuesday by the nation's top long-distance telephone company overshadowed its report of a $418 million third-quarter profit, more than double the net income for the same period last year, and share prices fell 5 percent to $20 on the New York Stock Exchange.