Business Today

OUTBACK SHARES FALL: For the second time in the past week, a Wall Street analyst has downgraded Outback Steakhouse's stock. Bryan Elliott of Raymond James & Associates wrote Friday that although the Tampa restaurant company remains a "very attractive value investment," its same-store sales trends are weak and no longer justify a "strong buy" rating. SunTrust Robinson Humphrey downgraded Outback's stock last week. Outback's stock closed Tuesday at $28.56, down 2.7 percent.

WINDOWS SUIT IS CLASS ACTION: A 1999 lawsuit accusing the Microsoft Corp. of stifling competition in the computer operating system market and overcharging users for Windows has been certified as a class-action proceeding by a circuit court in Miami. The suit is similar to others filed around the country stemming from the Justice Department's antitrust lawsuit against the software giant, which has been judged an illegal monopolist. Haggard, Parks, Haggard and Bologna, a law firm in Coral Gables, filed the suit on behalf of Windows users in Florida.

WORLDCOM QUESTIONS RAISED: Two top WorldCom officials apparently were told of potential accounting problems in March, according to an e-mail released Tuesday by a House committee investigating multibillion-dollar errors in the telecom giant's books. The March 18 message to WorldCom founder and former CEO Bernard Ebbers and ex-chief financial officer Scott Sullivan from another official cites "questions" about accounting issues related to preparation of the company's annual financial report.

HOME DEPOT REORGANIZES: The Home Depot is combining two of its operating divisions into a single division based in Atlanta. The Mid-Atlantic division, based in South Plainfield, N.J., will combine with the Atlanta-based Southeast division to form the new Eastern Division. The new division will serve 450 stores and have 90,000 employees. The change leaves Home Depot with eight divisions instead of nine and helps improve operating efficiencies, chairman and chief executive Bob Nardelli said in a statement.

NEW UNITED CHIEF SPEAKS: Taking the helm in the midst of a financial crisis, United Airlines' new chief executive told employees Tuesday that difficult decisions must be made immediately at the country's second-largest carrier. On his first day in charge, Glenn Tilton didn't immediately say whether he seeks the same $9-billion in labor cuts over six years that his predecessor proposed last week.

NEW 7UP FLAVOR PLANNED: Cadbury Schweppes PLC plans to unveil a green, fruit-flavored line extension of 7Up on Thursday, the Wall Street Journal reports, quoting Beverage Digest and unnamed sources close to the company. The new beverage, to be aimed at teens, will bear a name fitting for a drink once known as the "Uncola": dnL, or 7Up spelled upside down. A spokeswoman for Cadbury's U.S. beverage unit, Dr Pepper/Seven Up Inc., in Plano, Texas, declined to comment.

TAIWAN COMPANY TO MAKE XBOX: Microsoft Corp., the world's third-largest maker of video-game consoles, said it hired a unit of Taiwan's Acer Inc. to make the Xbox, seeking to cut costs and close the gap with market leaders Sony Corp. and Nintendo Co. Wistron Corp., the manufacturing arm of computermaker Acer, will start making the Xbox console in its plant in Zhongshan, China, by the end of this year, Microsoft said in a statement. Lower-than-expected demand for the Xbox, which debuted in November, prompted the world's biggest software maker to drop prices in Europe for the second time last week. To keep costs low, Mircosoft is outsourcing the console, signing up Wistron as the second supplier after Singapore's Flextronics International Ltd.

NAPSTER SALE STYMIED: A bankruptcy judge blocked the sale of Napster Inc. to Bertelsmann AG on Tuesday, killing a deal that might have revived the idled Internet music pioneer as a legitimate music-sharing network. Judge Peter J. Walsh, in Wilmington, Del., cited conflicting loyalties by Napster's top executive. Napster CEO Konrad Hilbers, a Bertelsmann veteran, said the judge's decision likely will force Napster to change its reorganization effort into a Chapter 7 liquidation.

HERSHEY SALE CHALLENGED: Pennsylvania went to court Tuesday to try to block any attempt by the charitable trust that controls Hershey Foods Corp. to sell the chocolatemaker, warning that such a deal could lead to major layoffs in the town that bears the company's name. Lawyers for the $5.9-billion Hershey Trust Co., which benefits a school for disadvantaged children, argued that the state lacks the authority to stop the sale of the nation's largest candymaker. The trust controls 77 percent of Hershey Foods' shareholder votes and 31 percent of its common stock. In July it announced that it had ordered company executives to seek bids for Hershey. Analysts say the price could be as high as $15-billion.

TREASURY AUCTION: Interest rates on short-term Treasury securities fell in Tuesday's auction. The Treasury Department sold $15-billion in three-month bills at a discount rate of 1.610 percent, down from 1.630 percent last week. An additional $14-billion was sold in six-month bills at a rate of 1.580 percent, down from 1.635 percent. Both the three-month and six-month rates were the lowest since Aug. 5, when the bills sold for 1.600 percent and 1.555 percent, respectively. The new discount rates understate the actual return to investors: 1.639 percent for three-month bills with a $10,000 bill selling for $9,959.30 and 1.615 percent for a six-month bill selling for $9,920.10.

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