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Originally published Wednesday, March 12, 2008 at 12:00 AM

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Business Digest

Infusion talk boosts Washington Mutual shares

Pacific Northwest Washington Mutual stock rose the most in almost eight years on speculation that Warren Buffett and Goldman Sachs Group...

Pacific Northwest

Washington Mutual

Washington Mutual stock rose the most in almost eight years on speculation that Warren Buffett and Goldman Sachs Group may invest in the company.

Seattle-based Washington Mutual gained $1.84, or 18.3 percent, to $11.88 Tuesday after earlier rising as much as 26 percent. Washington Mutual, the largest U.S. savings and loan, fell to a 12-year low Monday, three days after Merrill Lynch & Co. said the bank may report $11.2 billion in mortgage-related losses.

"A potential capital infusion by Warren Buffett and Goldman Sachs is the rumor," said Mike Capitani, head of equity trading at Caris & Co. in New York. "Buffett's always looking for a bottom on things, and he's flush with cash."

Spokespersons for Goldman Sachs, Buffett's Berkshire Hathaway and Washington Mutual declined to comment.

Washington Mutual reported its first loss since 1997 in the fourth quarter after writing down the value of its home-mortgage unit by $1.6 billion and setting aside $1.5 billion to cover bad loans. The lender said it will have to put aside $1.8 billion to $2 billion in provisions for the first quarter.

Jones Soda

Stocks nose-dive on loss, forecast

Jones Soda stock on Tuesday plunged the most in more than 11 years after it posted a fourth-quarter loss and forecast sales below analysts' estimates. ThinkEquity Partners also lowered its rating on the stock to "sell."

Shares of the soft-drink maker fell $1.48, or 34.1 percent, to $2.86, for the biggest drop since November 1996. The Seattle company's stock has lost 62 percent so far this year.

The company forecast a loss for the year on sales of $48 million to $50 million in a conference call Monday. The average estimate for sales was $52.2 million among five analysts surveyed by Bloomberg. Jones Soda also reported a fourth-quarter loss of $10.2 million as sales fell 41 percent.

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ThinkEquity Partners analyst Suzanne Price cut her rating on the stock to "sell," citing "extremely disappointing sales and earnings" in a note to investors Tuesday.

"We are concerned about the company's ability to grow sales while reducing spending," Price wrote. Of the eight analysts who cover Jones Soda, six recommend holding the stock and two recommend selling, according to Bloomberg data.

Cardiac Science

Deal with Mexico a major order

Cardiac Science said Tuesday that it had sold its largest order of electrocardiograph systems to date, in a deal with a Mexican government agency.

Mexico's main hospital network for state workers bought 282 electrocardiographs from the Bothell company. The company also manufactures portable defibrillators.

Cardiac Science shares closed at $8.59, up 13 cents or 1.5 percent.

Weyerhaeuser

CEO Rogel gets $13.9 million

Weyerhaeuser CEO Steven Rogel received compensation valued at $13.9 million in 2007, essentially unchanged from the previous year, as the U.S. housing-market slump pushed the lumber and packaging producer to a loss in the fourth quarter.

Rogel drew a base salary of $1.3 million last year, 1 percent more than in 2006, according to a regulatory filing Tuesday.

Most of Rogel's compensation came from stock and options granted to him during the year. An Associated Press calculation values the stock and option grants at $12.5 million on the date they were granted, an 11 percent increase from a year ago.

Nation/ World

Kroger

Costs, competition bite into profit

Kroger's quarterly profit tumbled 16 percent and its sales rose a slim 2 percent as it battled rising costs and tougher competition.

The fourth-quarter results Tuesday still beat Wall Street estimates, but the 2008 forecast from the nation's largest traditional grocery chain fell short of analysts' expectations.

The Cincinnati-based company, which owns QFC and Fred Meyer stores, said it earned $322.9 million, or 48 cents per share, for the quarter ended Feb. 2, down from $384.8 million, or 54 cents, a year earlier. Kroger said quarterly revenue edged up $17.23 billion from $16.86 billion.

Kroger's fourth-quarter profit topped the average forecast of 47 cents per share on sales of $16.81 billion, according Thomson Financial.

The results came as U.S. grocers face rising costs, Kroger estimated its product cost inflation at 3.8 percent over the previous year.

Kroger shares rose 68 cents, or nearly 3 percent, to $26 Tuesday. They have traded from $23.95 to $31.94 in the past year.

Caterpillar

$60B sales forecast surpasses estimate

Caterpillar, the largest maker of bulldozers and excavators, raised its sales forecast for 2010 by 20 percent to $60 billion, exceeding analysts' estimates.

The sales forecast was raised from $50 billion and would mark a 33 percent jump from last year, the company said Tuesday. The average of five analyst estimates compiled by Bloomberg News was for 2010 profit of $7.67 a share on revenue of $52.9 billion.

Caterpillar said it will benefit from machinery sales in emerging markets and efforts to improve public works in North America and Europe.

Shares of Caterpillar rose $3.89, or 5.7 percent, to $72.61.

General Electric

CEO buys stock, 2nd time in a week

General Electric Chief Executive Officer Jeffrey Immelt bought more stock and is telling investors that GE should outperform the Standard & Poor's 500 index this year in a "challenging" environment. GE shares rose the most in five years amid a surge in the broader U.S. stock markets.

Immelt on Tuesday bought GE stock for the second time in a week, acquiring 62,000 shares in the market for $2.04 million, according to a regulatory filing. The action brings his stock purchases to more than $5 million this month alone.

"You could try to pick the perfect investment for this environment, but it would be a challenge," Immelt wrote in his annual letter to holders to be released today. "Maybe it is in technology, or emerging markets, or commodities, or Treasury bills. Or you could pick GE."

General Electric rose $1.70, or 5.4 percent, to $33.40.

Compiled from Seattle Times staff, The Associated Press and Bloomberg News

Copyright © 2008 The Seattle Times Company

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