Business Digest

April 18, 2008

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Maryland
$50,000 donation to aid entrepreneurs
A young entrepreneur is donating $50,000 to start a fund that will provide seed money to University of Maryland students who are launching companies, the institution said yesterday. Anik Singal, a 2005 Maryland graduate and founder of a company that trains people to start and expand Internet affiliate marketing businesses, wants the new fund to help students participating in the university's Hinman CEOs Program. He will act as chairman of the fund's advisory board, and he kicked off a campaign yesterday to encourage other alumni to donate.

[Jamie Smith Hopkins

Earnings
Marriott says profit dropped 34% in 1Q
Marriott International Inc. said yesterday its first-quarter profit dropped 34 percent. The results were in line with Wall Street expectations, but the Bethesda-based hotel operator lowered its forecast for the full year. The company said it earned $121 million, or 33 cents per share, for the 12 weeks ended March 21. That was down from $182 million, or 44 cents per share, a year earlier.

Nation
Settlement expected in Fannie Mae scandal
The government is expected to announce today a settlement with former Fannie Mae chief Franklin Raines and two other top executives who are alleged to have manipulated earnings, costing shareholders billions of dollars in a 2004 accounting scandal. Terms of the settlement were not immediately known. Its completion was announced yesterday by The Wall Street Journal online. Raines, former Chief Financial Officer Timothy Howard and former Controller Leanne Spencer reached the agreement with the Office of Federal Housing Enterprise Oversight, the agency that oversees the two big government-sponsored mortgage finance companies, Fannie Mae and Freddie Mac. Agency spokeswoman Stefanie Mullin declined to comment. Attorneys for Raines, Howard and Spencer could not be reached for comment last night. OFHEO filed civil charges against Raines, Howard and Spencer in December 2006, seeking fines of $100 million or more against the three and restitution totaling more than $115 million in bonus money tied to an improper accounting scheme. The executives disputed the regulators' charges and said they were politically motivated.

Oil
Gas prices pass $3.40 a gallon
Retail gas prices pushed past a record high $3.40 a gallon yesterday, fulfilling expectations that they will keep climbing toward $4 as the summer driving season approaches. In some parts of the country, including California, prices are that high now. Oil prices, meanwhile, fell slightly after setting yet another record high overnight. Analysts said investors were locking in gains from crude's continuing rally. At the pump, the average national price of a gallon of unleaded gas rose 1.9 cents overnight to $3.418 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Diesel fuel also hit a record of $4.146 a gallon after jumping 1.7 cents overnight, the survey said. The expectation of higher summer demand is boosting gas prices now, but prices are also rising because refiners are switching from winter grade gasoline to the more expensive but less polluting fuel they are required to sell during the summer. That has pulled supplies lower. Oil, meanwhile, has spiked higher on concerns about falling supplies and rising global demand, and as a weaker dollar has attracted speculative investors to crude futures. Crude rose to a new trading record of $115.54 overnight.

Litigation
American Airlines settles pilots' lawsuit
American Airlines has agreed to settle a class action lawsuit brought by more than 350 pilots who said they were unfairly penalized by being barred from accruing vacation time and sick days while on military leave, the Justice Department said yesterday in Washington. If accepted by U.S. District Court in Dallas, the settlement will force the nation's largest commercial airline to pay the pilots a total of $345,772 - averaging just under $1,000 for each. It also will require the airline to pay its currently employed pilots $215,000 worth of sick leave credits. The airline had no immediate comment.

Labor
GM workers walk out of Mich. plant
Hundreds of members of the United Auto Workers streamed out of a General Motors Corp. assembly plant in Delta Township, Mich., that makes crossover vehicles yesterday, threatening the automaker's ability to build one of its most popular products. The factory makes the Buick Enclave, Saturn Outlook and GMC Acadia crossover vehicles that are selling well for GM. Steve Bramos, shop chairman for Local 602 at Delta Township, said, "This is about local labor issues that impact the work force."

This column was compiled from dispatches by Sun reporters and the Associated Press.

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Copyright © 2008, The Baltimore Sun

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