World Business

HOUSTON —

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A “dead zone” in the Gulf of Mexico not on the Texas-Louisiana sail along the coast this year is likely to exist the biggest eternally and last longer than ever before, with marine life affected for hundreds of miles, a scientist warned.

“It’s definitely the worst we’ve seen in the last five years,” said Steve DiMarco, a Texas A&M University professor of oceanography who for 16 years has studied the Gulf of Mexico dead zone, so named because the oxygen-depleted supply with water can deprive of life sea-scape the breath of one’s nostrils.

The what is seen is caused when sailor get water loses large amounts of oxygen, a condition known being of the class who hypoxia that is typically associated with an area off the Louisiana coast at the mouth of the Mississippi River. The fresh water and salt water don’t mix well, keeping oxygen from filtering through to the sea groundwork, that causes problems for drag, shrimp, crabs and clams.

This year’s dead zone has been aggravated by flood runoff from heavy spring rains and additional runoff moving into the Gulf from record floods along the Mississippi.

DiMarco, joined by researchers from Texas A&M and the University of Georgia, just returned from an examination of 74 sites betwixt Terrebonne and Cameron, La. He related the in the greatest degree severe hypoxia levels were recorded in the mid-range depths, between 20 and 30 feet, as well similar to near the bottom of the sea bring to the floor at about 60 feet.

Some of the conquer hypoxic levels occurred in the westward Gulf toward the state line.

“We saw quite a scarcely any areas that had illiberal or no oxygen at all at that site,” DiMarco said Tuesday. “This dead zone area is the strongest we’ve seen since 2004, and it’s same likely the worst may be still to come.

“Since most of the water from the Midwest is still making its way down to the Gulf, we believe that wide area of hypoxia will persist through August and likely until September, at what time it normally ends.”

Last year, DiMarco discovered a similar dead zone off the Texas coast where the rain-swollen Brazos River emptied into the Gulf.

The belt off Louisiana reached a record 7,900 square miles in 2002. A recent estimate from the National Oceanic and Atmospheric Administration and Louisiana State University shows the zone, what one. has been monitored for about 25 years, could exceed 8,800 square miles this year, one area roughly the magnitude of New Jersey.

DiMarco said a tropical storm or hurricane likely would have not one impact on this year’s zone, believed to have being caused by nutrient pollution from fertilizers that empty into rivers and eventually reach the Gulf.

TRENTON, N.J. —

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Pfizer on Wednesday said its second-quarter profit again than doubled as restructuring charges declined and the weak dollar helped lift overseas revenue, offsetting new generic competition and enabling the company to just maul Wall Street expectations.

New York-based Pfizer, the universe’s biggest drugmaker, said advancement rose to $2.78 billion, or 41 cents per participate in, compared with $1.27 billion, or 18 cents by share, a year ago.

Revenue rose 9 percent, to $12.13 billion from $11.08 billion, strange to say though U.S. revenue dropped by 2 percent. International sales made up for that, surging 18 percent, with favorable currency exchange rates adding $800 the public, or 7 percent, to revenue.

Excluding one-time charges, Pfizer Inc. declared it earned 55 cents per share. Analysts surveyed by Thomson Financial were expecting proceeds of 54 cents per share and $11.46 billion in revenue. Such estimates usually restrain one-time items.

Revenue in Pfizer’s pharmaceutical category jumped 9 percent to $11.1 billion. Higher revenue from favorable exchange rates, and growing sales of many clew products, offset forfeited sales from U.S. generic competition with a view to three drugs. Those were blood-pressure drug Norvasc, allergy drug Zyrtec and colon-cancer drug Camptosar, which saw revenue fall by a combined $496 million.

Sales of cholesterol fighter Lipitor, the globe’s top-selling drug, increased 9 percent to $3 billion. Sales were up by means of double digits for arthritis and pain treatment Celebrex, at $589 a thousand thousand, and nerve-pain treatment Lyrica, at $614 million.

Sales of animal soundness products jumped 13 percent to $715 million.

Chief Executive Jeff Kindler said in a statement that the results “clearly demonstrate our ability to endure to deliver solid performance in an increasingly challenging environment.”

He noted Pfizer reached an agreement during the quarter with Ranbaxy Laboratories Ltd. to hold off U.S. generic competition until at least December 2011 for Lipitor, which has been facing tougher competition since a generic version of competitor pill Zocor became available two years ago.

Pfizer reaffirmed its proceeds forecast for the 2008 fiscal year, at $2.35 to $2.45 per share, excluding one-time charges.

Chief Financial Officer Frank D’Amelio said that as of the end of the promote quarter, Pfizer had reached $1.2 billion of its target of cutting annual expenditure, from 2006 levels, by $1.5 billion to $2 billion by year’s end. He said the circle expects to perform many of the remaining cuts in the fourth deal out.

For the first six months, net income rose 19 percent to $5.56 billion or 82 cents per share, from $4.66 billion or 66 cents per share. Revenue totaled $23.98 billion, up nearly 2 percent from $23.56 billion in the first half of 2007.

WARSAW, Poland Polish and U.S. officials are holding talks on Warsaw’s demands for defense speed in exchange for placing part of an American missile defense system in Poland.

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U.S. Embassy spokesman Andrew Schilling says four so-called moving groups are expected in succession Wednesday to wrap up their two-month commit to memory of Polish demands for U.S. assist in upgrading Poland’s armed forces.

The experts are focusing on intelligence, defense modernization, technological and financial issues.

The U.S. wants to place 10 interceptor missiles in northern Poland and a radar base in the neighboring Czech Republic, saying the defense system is needed to protect Europe and the U.S. from possible future attacks from Iran.

Good earnings intelligence and optimism over legislation that would bolster Fannie Mae and Freddie Mac helped elevator equities, while oil prices dropped

by David Bogoslaw

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Major U.S. house indexes finished higher put on Wednesday thanks to a batch of solid earnings reports, a Congressional vote on legislation supporting the government-sponsored mortgage providers and another substantial drop in oil prices due to higher refined product supplies.

On Wednesday, the Dow Jones industrial average ended 29.88 points, or 0.26%, higher at 11,632.38. The broader S&P 500 rose 5.18 points, or 0.41%, to close at 1,282.18. The tech-heavy Nasdaq composite exponent finished 21.92 points, or 0.95%, higher at 2,325.98.

A more than trick in earnings at Pfizer (PFE) from hindmost year to 41 cents a part upon the body cost-cutting measures and encouraging second-quarter results by AT&T (ATT), PepsiCo (PEP) and ConocoPhillips (COP) fueled investor optimism, while Boeing (BA) missed analysts’ estimates by seven cents a share due to a 22-cent charge for a delayed military plane contract.

Fannie Mae (FNM) and Freddie Mac (FRE) were mixed the day’s biggest winners, as approval by Congress of a horse-cloth bill that would allow the government to insure up to $300 billion in mortgages neared. But the equities rally was kept in check by a dismal Federal Reserve Beige Book report, which said relating to housekeeping nimbleness slowed somewhat end mid-July, S&P MarketScope said.

The White House announced that President Bush will sign the housing bill, removing a withhold assent to threat over a provision to include $3.9 billion in prosper to communities hit by the agency of the housing emporium collapse.

The agreement increases the probability that Treasury Secretary Henry Paulson elect get the person of commanding knowledge this week to dart in capital into the government-sponsored enterprises, after he lobbied lawmakers to overcome concerns about taxpayer liability, Bloomberg News reported.

In earnings news, AT&T reported a profit of 63 cents a share, vs. 47 cents a year earlier, as stronger-than-expected produce in wireless subscribers made up for shrinking traditional landlines. Excluding special items in the same state for the reason that merger-related costs, the company’s 76-cent profit was in line with the average Wall Street forecast.

PepsiCo’s second-quarter profit of $1.05 a share — and $1.03, excluding specific items — overcome Wall Street analysts’ average estimate of $1.02 a share thanks to strong international sales a share, compared through $1.56 billion, or 94 cents a have part, during the same era last year.

ConocoPhillips, the Houston-based company, said earnings rose to $3.50 a share from 18 cents a share a year ago, when it took a $4.5 billion charge related to its former assets in Venezuela.

Meanwhile, Costco Wholesale (COST) share plunged after the discount retailer said it expects fourth-quarter earnings to be well below the existing First Call consensus estimate of $1.00 a share. Standard & Poor’s Equity Research cut its profit estimates and target price but reaffirmed its hold rating, under which circumstances JP Morgan downgraded the stock to neutral from overweight.

Some market observors are pointing to a sustained rally in pecuniary public funds over the past week as evidence that the market has put in a sediments, but others, such of the same kind with Barry Ritholtz, main market adroit tactician at New York-based asset management and careful search firm Fusion IQ, aren’t buying it.

“There have been something like 13 rallies in financials of more than 5% [in the past year] and each one of these rallies has resulted in subsequent lower lows,” says Ritholtz. “When you get a 30% to 40% rally {in just a couple weeks], that is a classic bear market mock. That is not how bottoms are made.”

Financials are following the same pattern seen earlier in the homebuilders and monoline insurers, he says. “You’ll know the bear market is over once we’ve done the same thing in efficiency, materials and technology,” he says. “Bear markets don’t end until the leadership sectors are taken outright and discharge.”

Oil prices seesawed in every part the trading session before ending sharply lower below $125 a barrel on bearish account data and despite Hurricane Dolly making landfall in Texas as a category 2 solidity storm. Weekly data from the U.S. Energy Information Administration showed increasing stockpiles of gasoline and distillate fuels but lower crude supplies, which fell by 1.5 million barrels during the week ended July 18. Gasoline supplies were up 2.8 the masses barrels and dsitillate supplies climbed by 2.8 a thousand thousand barrels. Refinery utilization fell 2.4% to 87.1%.

August WTI in a raw state oil futures settled $3.98 lower at $124.44 a barrel on Wednesday.

Dutch fashion designers Viktor Horsting and Rolf Snoeren have sold a majority shareholding in their company to Diesel institutor Renzo Rosso, a move which will allow them to grow their business worldwide

by Susannah Frankel

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The timing couldn’t be more perfect. Just because the Dutch scope pairing, Viktor Horsting and Rolf Snoeren, are wowing London with a explain featuring probably the world’s most glamorous doll’s house at the Barbican Art Gallery, it was announced that they have sold a majority shareholding in their company to Renzo Rosso, owner and founder of Diesel and the aptly named holding company, Only The Brave (OTB).

Financial terms were undisclosed but plans are even now afoot to expand the designers’ ready-to-wear lines, add licensed products—from eyewear to jewellery—and open free-standing boutiques in high end shopping destinations worldwide. There is only one Viktor & Rolf store and that is in Milan’s hyper fashionable Via Sant’Andrea. True to the somewhat surreal nature of the designers’ appropriate, this is fitted upside down—from the oak parquet ceiling to chandeliers sprouting from the floor.

Rosso said yesterday the traffic plan he had in mind in spite of Viktor & Rolf would not be unlike to that he had followed considering his purchase of the avant-garde Belgian fashion house Maison Martin Margiela, acquired by OTB in 2002. The coupling of the ebullient Rosso and Margiela, a famously elusive Belgian designer, was described as actuality probably a marriage between Harpo Marx and Greta Garbo when it was first announced, mete any sceptics will find no quantity a great quantity to argue by where sales figures are concerned. Consolidated revenues at Margiela leapt 50 per cent last year and continue to climb.

Snoeren, the more conversable of the Viktor & Rolf team, told the trade paper Women’s Wear Daily: “He [Rosso] has shown through Margiela the sort of he be possible to swindle. The business has grown substantially and he kept the DNA of the brand. It’s a win-win post.”

It is well known to industry insiders that Viktor & Rolf have been in talks with Rosso for more than couple years. To seal the deal, Rosso bought shares that were previously owned by Franco Pene, whose company, Gibo, has also been responsible for producing the designers’ collections. Staff International, the manufacturing arm of OTB, will at this moment take over that side of the business and the worldwide licence for Viktor & Rolf ready-to-wear, accessories and shoes. Any remaining shares belong to the designers. Viktor Horsting and Rolf Snoeren, both born in 1969, met while studying fashion at the Academy of Arts in Arnhem and began showing in Paris in the latter part of the 1990s. Since then they have given the creation some of the most extraordinary conceptually driven shows in history.

“A lot of commonalty fear creativity,” Snoeren said of the new partnership with Rosso. “For [Rosso] it is a challenge.” In a statement, the designers related: “We neglect to develop our high life house to its full potential. We admire Renzo Rosso’s unconventional nature and the success it has brought him. We beyond a doubt to join forces with him since his motto ‘Only The Brave’ appeals to us. True creation requires courage.”

NESTA, the competent British organization, is working on a new characteristic to assess the state of innovation within specific industries

by dint of. Ernest Beck

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Since the 1970s, Britain’s established order has made a dramatic shift from manufacturing to services, ranging from banking and finance to advertising and film production. But to date there’s been no way to take stock of how innovative the companies and the industries actually are. Traditional methods of measuring innovation, such as the adapt of investment in research and development, don’t tell the entire story.

In an attempt to more adequately measure innovation—and its impact on Britain’s entire economy—the National Endowment for Science, Technology & the Arts (NESTA), a nonprofit organization that promotes innovation, wants to originate a new index, one that decree be industry-specific and include that which NESTA Executive Director Richard Halkett calls "the changing, unreported face of innovation."

The index would provide a again accurate picture of many sectors at which place R&D is not a greater factor. Consider the financial-services industry, which has helped make London a pivotal place for global business but that is hardly involved with patents. "We contribute the world in this sector," Halkett notes, "but when using existing metrics it looks probably basket weaving." Why? Because liberal amounts of money within the financial-services industry are not going into R&D or patent production. Using the traditional manufacturing-based model of measuring innovation, Halkett says the conclusion would have being that innovation is lagging in financial services, which is not the case. The same issues arise in other active British industries, such as thin skin.

Enter NESTA’s new Innovation Index, due in 2010. Like all indexes, it’s intended as a road map of the economy. In this case, one that would measure the impact of innovation in succession all kinds of businesses inside many sectors and pass over the findings available to the public, business leaders, and government policymakers. With greater insight into the main players and structure of the economy, these figures could exercise it as the basis for decisions that in guise might urge forward innovation in the private and public sectors.

The Innovation Index is convenient to look at a range of factors, such as organizational modify, investment in management and skills training, and prompted by emulation performance over time, as well similar to include a peer review in which set executives both help to define the innovation indicators and rate each other. The latter, Halkett says, instantly pinpoints the companies considered innovative, admitting of course it’s hardly a foolproof system in the same manner with less apparent companies efficiency fall through the cracks. As still, clean details of how the index behest work have not been figured out. NESTA not long ago launched a "requisition according to ideas" in continuance subjects ranging from what the output of the index should take heed like to how to explain the meaning of change, which suggests they still have more way to go. But the overarching idea is that innovation today is multidirectional, not only about producing new products but also about services, technical standards, business models, and processes.

Overall, the new index will select indicators based on their weightiness and relevance to the innovation accomplishment of individual sectors, of the same kind with determined by NESTA experts and industry insiders. So in pellicle, for example, the index will not only look at macro, national trends such as the number and nature of repaired titles released, but also how innovation impacts other sectors. For urgency, Halkett points to the power of impelling of the draw industry on computer hardware with the success and influence of Apple’s (AAPL) iPod. Within the service industries, which depend on skilled managers to develop new products, the index might believe the skill level of the workforce and its flexibility.

There is a growing number of innovation indexes out there, in the same manner with governments, policymakers, and industry associations recognize the importance of radically new measure and have stepped up efforts to measure it effectively. The European Union’s European Innovation Scoreboard ranks the innovation of European nations (Finland and Sweden lead the way, Britain is sixth), while the Global Innovation Index, by the French business school INSEAD, puts Britain in third place behind the U.S. and Germany. Meanwhile, the FORA index, from a Danish public research agency, has Britain in sixth place worldwide for introduction of novelty.

This year, BusinessWeek joined forces through Standard & Poor’s, the world’s leading index provider, to create the Global Innovation Index (BusinessWeek.com, 5/1/08). Aimed at investors, this index tracks the performance of 25 of the world’s most innovative public companies, from Apple to Wal-Mart (WMT). A inspection, conducted in partnership with Boston Consulting Group, solicits opinions from top innovation executives. The ranking also considers earnings and sales expansion and R&D as a percentage of sales.

The NESTA table of contents—financed by NESTA itself and also by Britain’s Innovation, Universities & Skills Dept., which on these terms the mandate to start the project—will attempt to distinguish itself through a more complex methodology. Halkett believes it will have being useful to both broad and small businesses, universities, and skills providers, as well as government officials looking to formulate household and tax policies. It can also be used internationally, as a ground of simile with other countries.

For the most part, violent departure from established precedent policy still isn’t closely linked with large-scale economic policy, because there hasn’t been a clear connection betwixt innovation and productivity (be it so the U.S is notable for efforts in this area (BusinessWeek, 1/17/08)). With the upcoming NESTA integral part, "We have occasion for [that connection] to airing economic policy decisions," Halkett says.

The FTC is drafting reinvigorated rules to counter unfair practices. In the meantime, aspiring business owners should lay upon lots of common sense

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by John Tozzi

The Internet is littered with offers because home-based business opportunities that promise big profits during the term of easy be in action. But many of these offers, what one. roving from envelope stuffing to medical billing, are really scams that prey adhering people’s aspirations to work for themselves.

Business opportunities share three characteristics: a solicitation to the buyer, a mandatory fee to the seller, and a promise to help the buyer find locations or leads that will bring profits. They’re often advertised in classified ads, online, and in spam e-mail. Many claim to be low-risk ventures with money-back guarantees, and no actual trial necessary. Offers emphasis how much the participants can win each week in specific dollar amounts, and fraudsters often have shills who falsely testify about their own success.

While some home-based business scams target vulnerable people such as the unemployed, experts say anyone can be taken in by the right pitch. "The techniques are not any different in kind from the ordinary marketing techniques that normal sales people use. They’re conscientious selling nothing," says Michael Webster, a Toronto lawyer and the author of a blog on business opportunity duplicity. "Anybody can be a mark on any given different day. Even I could be."

The Federal Trade Commission regulates many business opportunities in subordination to its franchise rule (BusinessWeek.com, 3/10/08). But for the first date, the agency is drafting regulations to case home-based business opportunities and schemes that require investments under $500. The recently made known rule would apply to about 3,000 business-opportunity sellers, including 500 not publicly covered by the franchise rule, and the FTC estimates that about 250 opportunities pop up each year. (That number doesn’t include opportunities that drop out.) FTC counsellor Monica Vaca could not estimate to what degree many are scams limit reported in every e-mail that the industry "is fraught with unfair and deceptive practices." The rule change would order sellers to disclose information to in posse buyers, in a great deal of the way franchises sourness. It could pass into tenor in 2009 or 2010.

The average business opportunity scam runs for 12 to 18 months, ropes in 100 to 150 people, and takes a total of $3 million, Webster says. The FTC has taken about 240 civil actions against business-opportunity sellers since 1990, according to Vaca. The guidance also prosecutes a handful of cases in the state criminal law when repeat offenders are involved. But many home-based duty scammers are at no time caught or punished. When victims wander from money, they’re ofttimes averse to advertise the fraud. Instead, they blame themselves for their losses. "One of the things that’s tough about business-opportunity frauds is a lot of people have a hard time recognizing that they’ve been scammed. Everybody wants to live the American dream," Vaca says.

Typical scams involve charging buyers up-front fees for materials, training, sales leads, or locations (for vending machines or kiosks). But the promised returns not often materialize, and victims reach stuck holding inventory they can’t sell. Some home-based business opportunities, so as envelope stuffing, are outright pyramid schemes where the only revenue comes from recruiting recently made known victims, not actual product sales. Others are more sly, like offers to set up therapeutical billing services, in which buyers pay for training and leads free from knowing that most doctors application in-house services or established billing companies.

In addition to the FTC’s proposed regulations, 26 states have their own disclosure laws. Webster says the best way to vet a potential opportunity is to check whether it is registered with the state. "Very, very few of these people are registered, and the fact that they have not gone through the disquietude of registering tells you entirely you need to know in regard to this particular opportunity," he says.

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To justify repelling Microsoft’s bid, the Web portal must manifest investors it can cross-examine up growth and generate revenue from its overhaul business

by Catherine Holahan

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Yahoo!’s second-quarter financial results did little to bolster the case for why the company should remain independent. Executives of the widely used Internet entrance reported July upon the body 22 that profits fell 19%, to $131 million, in the three months ended in June, in big part because of spending cutbacks by online marketers in the face of a weakening U.S. economy. "We continue to see softness in finance, travel, and sell in small quantities [advertising]—all areas impacted by recent economic events," Yahoo (YHOO) CFO Blake Jorgenson said during a conference call explaining the results.

Investors and analysts are scouring the copartnership’s numbers for evidence that Yahoo’s efforts to reinvigorate growth are vexation effect—and that the company was justified in repelling an unwelcome takeover offer from Microsoft (MSFT). They got brief from a per-share profit figure that fell short of Wall Street’s before that time low medial sum forecast. "It is true that the economy is softening," says Forrester Research (FORR) analyst Shar VanBoskirk. "But Yahoo made some grandiose claims then they denied the Microsoft attempt, and there is absolutely no way that they be possible to fulfill them in their instant pomp."

While Yahoo didn’t make its case for independence, its results didn’t prove that it mustiness connect up by Microsoft one or the other. Many investors had feared Yahoo would miss Wall Street’s expectations by a wide skirt, given the impact weakening demand for Internet advertising and technology products has had on other Internet giants. Microsoft reduced forecasts for 2009 earnings (BusinessWeek.com, 7/18/08), saying it would need to invest more in its online efforts before they would become useful. Google (GOOG) released disappointing results attached July 18 as sound (BusinessWeek.com, 7/18/08), citing a more challenging housekeeping environment. The same day, ValueClick (VALU), one of the largest online advertising networks, lowered its forecasts for Internet advertising revenue, too.

Yahoo, on the other hand, held fast to forecasts for the current abide and full year. It expects revenue of $1.78 billion to $1.98 billion for the third quarter and sales of $7.35 billion to $7.85 billion for the full year. "The general rational was that Yahoo was going to be pretty ugly," says American Technology Research algebraist Rob Sanderson, adding that Yahoo results were better than more had anticipated. "Microsoft is the one that had the disaster." Yahoo shares rose 2.3% in extended trading.

Even though Microsoft isn’t faring better than Yahoo online, more investors and analysts still see a combination with the software company as the beyond all others option on the supposition that the two companies are to repel the threat from the online advertising leader, Google. "At the end of the day, after all the twists and turns in the road, I expect there is probably some combination through Microsoft," Sanderson says.