Settlement fair, Boeing CEO says

Boeing Co.’s president and chief executive officer said Tuesday that a tentative $615 million settlement with the Justice Department is fair.

While expensive, Jim McNerney said the settlement will benefit the company by prohibiting the U.S. government from prosecuting Boeing after a three-year ethics investigation. He answered question from reporters after a speech at Saint Louis University.

McNerney said Boeing will strengthen its internal ethics controls, an effort that will be supported by one of the firm’s newest hires — Fourth U.S. Circuit Court of Appeals Judge J. Michael Luttig.

McNerney said the goal is to make sure no corruption is “hiding in the bureaucracy” at Boeing, the nation’s second-biggest defense contractor after Lockheed Martin Corp.

“Judge Luttig, as I have gotten to know him, supports that … very strongly,” McNerney said.

Boeing’s defense contracting division is based in St. Louis, and the speech was McNerney’s first public appearance here since he took over as chairman and CEO in July.

Boeing’s settlement, which is expected to be signed within a few weeks, could help the company move past ethics probes that have damaged its reputation.

“Wal-Mart Stores Inc.’s cost-cutting moves and improvement in its merchandise mix helped the world’s largest retailer post a 6.3 percent increase in its first quarter profit. The results beat Wall Street estimates and sent its shares modestly higher.

But Wal-Mart warned Tuesday that spikes in gasoline and utility prices will continue to leave consumers with less to spend and will pressure earnings in the months ahead.

Wal-Mart earned $2.615 billion, or 63 cents per share, in the three months ended April 30, up from $2.461 billion, or 58 cents a share, a year earlier. Analysts polled by Thomson Financial had forecast earnings of 61 cents per share.

In the first quarter a year ago, one-time items involving taxes and a legal settlement drove up profits by $145 million, or 3 cents per share.

“Hewlett-Packard Co.’s fiscal second-quarter profit rose 51 percent Tuesday as the printer and computer company benefited from cost cutting, gains in PC market share and higher revenue.

For the three months ended April 30, HP earned $1.46 billion, or 51 cents a share, compared with $966 million, or 33 cents per share, in the same quarter last year. Sales rose 5 percent to $22.6 billion from $21.6 billion in the second quarter of last year.