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Saturday, July 22, 2006

Media Digest 7/22/2006


According to the Wall Street Journal, Microsoft plans to make a line of multimedia players to compete with the Apple iPod. The product should launch by the end of the year.

The WSJ writes that Advanced Micro Devices is close to a deal to buy ATI for $4.2 billion. ATI makes graphic chips. The purchase may help AMD in its battle with Intel.

The WSJ writes that Dell warned that its earnings for the quarter ending August 4 would show earnings down 44% to 49% and that revenue would be up 4% to $14 billion. The company's stock dropped about 10% to close at a four-and-a-half year low.

The WSJ reports that Caterpillar had a 38% increase in profits and the company raised its full-year estimates on demand for contruction equipment.

The WSJ also reports that Eli Lilly had net income of $822 million compared with a loss of $252 million in the same quarter last year. The phamaceutical company said full-year sales will be slowed by slack demand of its insulin products and antipsychotic drugs.

The New York Times reports that Viacom has been doing poorly after its split with CBS. Demand for cable advertising has been soft and the shares in Viacom has dropped nearly 20% since the companies were separated in two. CBS's shares are up 9% over the period. Viacom also owns the Paramont studio which is trying to turn itself around.

The NYTs also reports that HSBC will buy Panama's largest bank, Grupo Banistmo, for $1.77 billion.

The NYT also writes that Carlos Ghosn, the head of Nissan and Renualt, would not discuss taking an equity stake in GM in the initial conversations about a three-way alliance among the companies.

Reuters reports that AstraZeneca has won approval by the FDA for its asthma drug, Symbicort.

Reuters also writes that stock buybacks are increasing but they sometimes indicate that the companies involved in the practive do not have alternative uses for their cash. The practice also does not improve the long-term financial performance of companies. Buybacks often do not improve the stock prices of the companies who implement them.

Newmont, the mining company, said that gold output would be down in 2006 and 2007, but would recover in 2008. The company also said gold prices will remain strong for the years.

Douglas A. McIntyre

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