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Originally published Friday, February 22, 2008 at 12:00 AM

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Business Digest

Maritz to head EMC initiative

Pacific Northwest Paul Maritz, a former high-ranking Microsoft executive, is becoming president of EMC's Cloud computing initiative, which...

Pacific Northwest

Microsoft

Paul Maritz, a former high-ranking Microsoft executive, is becoming president of EMC's Cloud computing initiative, which competes directly with Microsoft.

The Zimbabwe native, a central figure in Microsoft's meteoric rise in the late 1990s, has been working with startups and engaged in philanthropy over the past seven years.

Pi, a Seattle information-management venture he founded in 2003, was sold Thursday to Hopkinton, Mass.-based EMC. The 100-person company will continue to operate as a stand-alone entity.

When the deal is done, , Maritz will be president and general manager of EMC's new Cloud Infrastructure and Services Division.

EMC wouldn't say how much it paid in the all-cash deal but said it should be closed in the first quarter.

Boeing

Workers shifted to long-range 787

Boeing has temporarily suspended work on the short-haul version of its new 787, a move aimed at keeping it on schedule to deliver the first of two long-range models by early 2009.

Boeing has won only 43 orders for the 787-3, which is designed to fly up to 3,500 miles carrying as many as 330 passengers. It has more than 800 orders for the two long-range models, the 787-8 and the 787-9

Boeing spokeswoman Lori Gunter would not disclose Thursday how many people who had been working on the 787-3 have been reassigned to the 787-8, the first model coming off the assembly line.

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Boeing started shifting the 787-3 work force last week and has not determined how long the workers will focus on the 787-8 before resuming work on the short-haul plane, Gunter said.

The original plan called for the first of the 787-3s to be delivered to Japan's All Nippon Airways in mid-2010, but Gunter said it's too early to tell whether that target will be met.

Boeing

Continental Air orders 27 planes

Continental Airlines ordered 27 Boeing aircraft Thursday as it replaces older, less fuel-efficient planes and expands international flights.

The new order from the Houston carrier — for eight 777-200s and 19 737-700s — is worth about $3 billion at list prices. Assuming standard discounts based on estimates from aircraft-valuation firm Avitas, the actual purchase price is around $1.8 billion.

Continental already has agreed to sell 15 of its older Boeing 737-500s through this year and to end leases on five more.

The airline had 60 of the older 737-500s in its main jet fleet of 365 planes at the end of 2007.

Continental also has mentioned shedding its 737-300s, the oldest type of jet in its fleet, with an average age of 21.2 years. The 737-500s average 11.8 years, the second oldest.

InfoSpace

Readjustment shrinks profit

InfoSpace has cut nearly $2.3 million from its previously reported fourth-quarter profit, saying it gained less from last fall's sale of its online phone-directory business.

Bellevue-based InfoSpace sold the directory service, Switchboard.com, to Idearc of Dallas for $225 million in cash. In its preliminary fourth-quarter financial report issued Feb. 5, InfoSpace recorded a $139.9 million after-tax gain from that sale.

But in a regulatory filing Thursday, the company said it actually gained $130.6 million, reflecting both a $2.3 million noncash adjustment and a reallocation of some income-tax expenses.

The bottom line: InfoSpace made $55.5 million in the fourth quarter, or $1.67 a share, instead of the $57.8 million, or $1.74 a share, first reported.

Profit for the full year was cut from $16.9 million, or 52 cents a share, to $14.6 million, or 45 cents a share.

Nike

Bauer Hockey unit fetches $200 million

Nike said Thursday it will sell its Bauer Hockey unit to an investor group for $200 million in cash.

The group is led by investment company Kohlberg & Co. — formed by the senior founding partner of the private equity firm Kohlberg Kravis Roberts — and Canadian businessman W. Graeme Roustan, the owner of arena and ice-rink design company Roustan Arena Solutions.

Nike, which acquired Bauer Hockey in 1995, had announced in September it was exploring the sale of the subsidiary.

Nation / World

Safeway

Grocery shoppers watching spending

Safeway delivered a fourth-quarter profit that met analyst expectations, but the grocer's stock price tumbled to a 52-week low Thursday amid worries that a recent sales slowdown will worsen as the threat of a recession and rising food prices turn more shoppers into penny pinchers.

Although Safeway stood by its previous forecast of double-digit earnings growth this year, investors zeroed in on data and management comments indicating consumers are loading their shopping carts with the cheapest groceries available.

The trend already has contributed to "modest" decline in Safeway's "identical-store" sales during the first seven weeks of 2008, Chairman Steve Burd told analysts during a conference call.

Safeway's growth under this closely watched benchmark, which tracks sales at stores open for the past year, already has fallen in three consecutive quarters.

"We are clearly seeing a more-cautious consumer," Burd said.

The remarks apparently didn't resonate on Wall Street. Safeway shares plunged to a 52-week low of $28.80 before rebounding to $29.66, off $2.28.

Oil inventory

Rise in supply helps trim prices

Oil prices fell Thursday after a government report showed that the nation's crude-oil supplies rose more than expected last week.

Light, sweet crude for April delivery fell $2.51 to settle at $98.23 a barrel on the New York Mercantile Exchange, after earlier alternating between gains and losses.

March oil rose to a new settlement record of $100.74 and a new trading record of $101.32 before expiring Wednesday.

The inventory report from the Energy Department's Energy Information Administration was mixed. While crude-oil inventories rose 4.2 million barrels last week — more than the 2.9-million-barrel increase analysts surveyed by Dow Jones Newswires had expected — supplies of distillates, which include heating oil, fell 4.5 million barrels, much more than the 1.5-million-barrel forecast.

RIM

Hot smartphones set stock on fire

BlackBerry maker Research In Motion (RIM) sent its stock surging Thursday by raising its forecast for fourth-quarter subscriber additions, saying its smartphones were hot sellers over the holidays.

The company said it expects quarterly net subscriber account additions to be 15 to 20 percent above the 1.82 million it forecast in December, implying 2.09 million to 2.18 million additional subscribers.

The BlackBerry subscriber account base is expected to be about 14 million at the end of the company's fiscal fourth quarter March 1.

Research in Motion shares climbed $8.78, or almost 9 percent, to $106.69 Thursday.

J.C. Penney

Middle-class pinch squeezes earnings

J.C. Penney said Thursday its fourth-quarter profit fell 10 percent as its middle-class customers struggled with a weakening economy, and the department-store retailer predicted modest earnings this year.

Chief Executive Myron Ullman III said there were no signs that consumer spending would rebound quickly, so the company was planning "for a difficult economic climate."

For example, the company now expects to open 36 stores this year, down from the original plan of 50 openings.

Penney said profit slipped to $430 million, or $1.93 a share, in the quarter ended Feb. 2.

The company beat its own lowered expectations, and analysts had set their target at $1.77 a share.

Shares rose 8 cents to $48.03 Thursday.

Choicepoint

LexisNexis parent buying company

ChoicePoint, a 1997 spinoff of credit agency Equifax, is being acquired by the parent of LexisNexis in a cash deal worth $3.6 billion, a major premium for a company that weathered an embarrassing breach of its database, federal investigations and a stock-trading probe of its top two executives.

The deal combines ChoicePoint's data and analytics assets with LexisNexis' technology, a marriage that will strengthen the combined entity's ability to meet growing demand for its services, especially in the insurance field.

Compiled from Seattle Times staff and The Associated Press

Copyright © 2008 The Seattle Times Company

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