‘TV Guide’ revamps format to fit market

People used to thumb through the TV Guide to find their favorite shows. Now they scroll through on-screen programming guides and point and click.

Faced with the challenge of staying relevant in the Internet age, TV Guide, an iconic magazine for two generations of Americans, announced an overhaul Tuesday that will transform the title into a larger, full-color format with a mix of 75 percent stories about TV shows and stars and 25 percent listings, the reverse of the ratio it has now.

The revamp also calls for the magazine to slash the circulation it guarantees advertisers by nearly two-thirds, from 9 million to 3.2 million and eliminate an unspecified number of jobs. The changes will go into effect with the Oct. 17 issue.

Railroad

BNSF profit increases

Burlington Northern Santa Fe Corp., the nation’s second-largest railroad operator, said Tuesday that its second-quarter profit increased 47 percent as freight revenue climbed 15 percent to a record $3.04 billion.

Net income grew to $366 million, or 96 cents per share, from $249 million, or 67 cents per share, in the year-ago quarter. Operating income rose to $710 million from $508 million last year.

Revenue increased 18 percent to $3.14 billion from $2.69 billion a year ago, as freight revenue rose to $3.04 billion from $2.64 billion last year.

The results beat analysts’ expectations for earnings of 93 cents per share on sales of $3.07 billion, according to a Thomson Financial poll.

Burlington Northern shares rose 27 cents to close at $51.27 Tuesday on the New York Stock Exchange.

Retail

Amazon shares surge despite earnings sag

Amazon.com Inc. said Tuesday that its second-quarter earnings sagged 32 percent from a year ago despite brisk sales at home and abroad, but higher operating profits sent the stock surging in after-hours trading.

The Internet retailer said net income for the three months that ended June 30 was $52 million, or 12 cents per share, down from $76 million, or 18 cents a share, for the second quarter of 2004.

Sales were $1.75 billion, up 26 percent from $1.39 billion at the same point last year. The company’s gross profit – net sales minus the cost of those sales – rose to $450 million, up from $341 million at this time last year.

Shares in Amazon.com fell 21 cents to close at $37.74 Tuesday on the Nasdaq Stock Market. In after-hours trading, the shares rose $3.61, or 9.6 percent, to $41.35.

IBM unveils updated mainframe computers

Trying to stay atop the market for corporate computer servers, International Business Machines Corp. renewed its lucrative line of mainframe computers Tuesday with a new system aimed at helping banks, government agencies and other big customers keep data secure.

IBM spent $1.2 billion over the past three years developing the new mainframe, the z9, which is twice as powerful as Big Blue’s current top model. The price starts around $1 million.

Like previous mainframes – enormous, centralized computers that date to the early days of the digital era – the z9 can encrypt data. But IBM contends the new machines make encryption more of a priority by spreading that capability throughout the system instead of just in the central processor.

As a result, IBM executives said, banks and other customers that traffic in sensitive data will find it easier to encode backup tapes and other records that often are transmitted or stored in clear text. That flaw has been at the heart of some of the recent data breaches that have garnered widespread attention.

Research firm IDC estimates that at least 15,000 mainframe computers are in use around the world, and that IBM sells about 2,500 annually.

Finance

Waddell & Reed reports loss

Investment bank Waddell & Reed Financial Inc. posted a second-quarter loss Tuesday to settle alleged securities violations and pay severance costs.

The Overland Park-based company posted a quarterly loss of $7.1 million, or 9 cents per share, compared with a profit of $25.2 million, or 31 cents per share, a year ago.

Results included a $20.5 million settlement with the National Association of Securities Dealers and a $14.5 million settlement with Torchmark Corp. over improperly switching customers between annuity funds, a $6.3 million charge from the recent resignation of the company’s chief executive, as well as other severance and restructuring charges. Excluding the charges, the company reported earnings of $21.7 million, or 27 cents per share, for the latest quarter.

Revenue rose 7 percent to $150.7 million from $140.7 million last year.

Analysts surveyed by Thomson Financial expected earnings per share of 28 cents on revenue of $132.2 million.

Waddell & Reed shares fell 64 cents, or 3.2 percent, to close at $19.26 Tuesday on the New York Stock Exchange.

Economy

Consumer confidence dips on job worries

Americans’ anxiety about the economy and their jobs resurfaced in July, sending a widely followed measure of consumer confidence downward and ending a three-month winning streak.

The Conference Board said Tuesday that its Consumer Confidence Index fell to 103.2 from a revised 106.2 in June. The July figure was worse than the 106.2 analysts expected, but still was considered solid.

In May, the index rose to 103.1 from April’s 97.5.

Lynn Franco, director of the private research group’s Consumer Research Center, said the dip was “no cause for concern.”

Mark Vitner, senior economist at Wachovia Corp., said that consumer confidence likely would bounce back but that the index likely wouldn’t break out of its range of 90 to 110, consistent with moderate economic growth.