Conseco (CNC) CEO Gary Wendt hasn't lived up to the fanfare that greeted him last year when he arrived after an illustrious career as CEO of GE Capital. On Oct. 30, Conseco posted a $411 million third-quarter loss and took a $471 million charge, writing down the value of much of its assets. The Carmel (Ind.) finance and insurance firm also cut its fourth-quarter estimates to 17 cents a share, down from 33 cents. That sent the stock plummeting 27% in the next two days to $2.95, an 85% drop from its $20.24 high in May.
Salomon Smith Barney analyst Colin Devine worries that Conseco won't have enough earnings from operations to meet the $1.4 billion in interest and principal payments due in 2002 on its 6 billion in debt. Wendt disagrees. "We have excellent and predictable cash flow from operations, and we have multiple options to generate additional cash," he says. Still, the economic downturn is likely to further squeeze Conseco's mid- to lower-income customers. Nobody said it would be easy for Wendt. With its soda business flat, Coca-Cola (KO) is counting on juice and other healthy drinks to put the fizz back in its bottom line. Its latest move: On Oct. 30, the Atlanta soda giant agreed to pay $181 million for Odwalla, a California-based maker of juices, smoothies, shakes, and soy beverages. Coke hopes to use its ubiquitous distribution to expand Odwalla's reach, which now extends to only 8,000 U.S. retail outlets. The deal is the latest in a string of noncarbonated acquisitions for Coke, which earlier this year acquired the PlanetJava coffee brand and the Mad River Traders line of teas and juices. Still, analysts say Coke needs to do more in the fast-growing health and wellness category to rival PepsiCo (PEP), which not only acquired the trendy SoBe brand last year but also snatched the Gatorade line from Coke after its board vetoed the deal at the last minute. On Oct. 31, treasury bonds posted their biggest daily gain since the October, 1987, stock-market crash after the Treasury Dept. said that it will stop issuing the 30-year bond. The move will minimize the government's borrowing costs and help bring long-term interest rates down. The role of the 30-year security as a benchmark has diminished since the agency began paring back its issuance in the 1990s. "The 30-year bond was becoming a costly orphan," explains James Glassman, senior economist at J.P. Morgan Chase. The government began selling 30-year bonds in 1977 and has issued more than $600 billion. Is there any limit to what men will pay for a shave? On Oct. 30, Gillette (G) unveiled an improved version of its wildly successful Mach3 razor. The Mach3Turbo is expected to sell for $9 for a razor and two cartridges when it is launched next April. That would easily make it the world's most expensive mass-market razor. A steep price, but history suggests millions of men will pay the 15% premium over Mach3 for the Turbo's improvements. Gillette initially charged a much steeper 35% premium for Mach3 when it was introduced in 1998. But Mach3 still became the world's No. 1 blade. When Anthrax spores started showing up in the mail, Titan saw an opportunity and seized it. On Oct. 26, the San Diego-based company won a $40 million contract to supply mail-sanitation systems to the U.S. Postal Service through its subsidiary SureBeam (SURE). Unlike competing radiation-based systems, Titan's technology uses electron beams to kill bacteria. Until now, it has primarily been marketed for sterilizing food and medical devices. "We went to the postal service and said we could adapt our technology to help deal with this threat," says Chairman Gene Ray, who adds that Titan has been using the SureBeam system to sterilize its own mail. Fidelity investments announced that it was cutting 760 jobs on Oct. 30, joining a long list of financial-services firms laying off employees. Along with 354 positions pared this summer, Fidelity's dismissals amount to 3.4% of its 32,847 employees prior to the reductions. Privately held Fidelity has resisted putting people out of work, partly in an effort to prove its financial might in comparison with its competitors. Still, the shallow cuts are a sign Fidelity is optimistic. Its core mutual-fund business had net sales of $15.3 billion through September, more than double last year's sales. Fidelity says it expects no more layoffs this year. -- Alltel (AT) is buying 600,000 telephone lines from Verizon in Kentucky for $1.9 billion.
-- Qwest Communications (Q) reported an unexpected loss for the third quarter.
-- Allied Waste Industries (AW) COO and president Larry Henk resigned Oct. 30. McDonald's (MCD) shares wilted after the fast-food giant warned on Oct. 29 that the widening global economic slowdown will cause 2002 earnings to fall well below forecasts. Big Mac also disclosed it will take a $175 million charge in this quarter for layoffs. McDonald's closed Oct. 31 at $26.07, down 10% in three days.