Friday November 11th, 2005
by: Ed Mayberry, November 11, 2005 5:11:00 am
Gasoline prices are down, and consumer spirits are up. A new survey finds Americans are feeling better, but not yet giddy, about their financial prospects and that of the economy. The RBC Cash Index, based on polling by Ipsos, indicates a sizeable rebound in consumer confidence this month. September's reading was the lowest since early 2003, when the nation was on the brink of war. It has been on the mend over the past few months. Analysts say with energy prices falling, consumers feel better about the outlook for the economy. Even so, the survey indicates they're not quite as positive as a year ago. The consumer confidence index is based on the results of 1,000 adults surveyed Monday through Wednesday about their attitudes on personal finance and the economy. Results of the survey have a margin of sampling error of plus or minus three percentage points.
Houston's economy continues its 34-month growth trend with an October Purchasing Manager's Index of 59.2, according to the National Association of Purchasing Managers. This was the first PMI reading of below 60 in over six months, and lower sales and production growth are blamed. The PMI is based on a monthly survey of some 80 purchasing executives in oil and gas exploration and production, manufacturing, engineering and construction, chemicals, distribution, business and financial services and healthcare. Components include sales, production, employment, purchases, prices paid and inventory levels.
A recent day-long conference at the Alden Houston Hotel--the old Sam Houston Hotel--featured policyholder attorneys, emergency management and government officials, helping businesses deal with insurance companies in the aftermath of the hurricanes. Mississippi Attorney General Jim Hood says some insurance companies have been trying to get out of paying for certain damages.
One solution offered by the insurance industry is a kind of hurricane insurance program, patterned after national flood insurance.
Policyholder attorney Robert Horkovich works with the Insurance Recovery Group of Anderson Kill & Olick.
Horkovich says policyholders could have more options than they think.
Horkovich has in the past decade obtained over $2 billion in settlements and judgments from insurance companies for his clients.
The Small Business Administration has started a Gulf Opportunity Pilot Loan program for businesses affected by Hurricanes Katrina and Rita to recover and rebuild. Thirty-two Texas counties are eligible for loans of up to $150,000 through local banks. The CBA says the loans are being handled on an expedited process and responses can be delivered in 24 hours or less. Loans are similar to SBAExpress loan, which are made by commercial lenders and carry an SBA guarantee.
A Small Business Workshop is set for Monday at the Park Plaza Hotel on Kirby, hosted by Congressman Al Green and Hibernia Bank. Representatives from the bank, the Houston Business Development Corporation, Accion Texas and the Federal Home Loan Bank of Dallas will be on hand for the morning workshop to introduce products they offer to small businesses.
Halliburton has resolved three cases that alleged the conglomerate broke laws in handling plans related to pensions, expenses and payroll. The Houston-based company says it cooperated with the federal government to identify and voluntarily resolve the problems. In the first case, a retirement income plan from Halliburton's former Dresser division had been over funded by more than five percent. Although Halliburton was required to disburse the extra money to plan beneficiaries--it didn't. Halliburton began fixing the errors in May of 2003. A second case focused on an employee fund that pays expenses for legal, actuarial and other services for an executive bonus program and others. The payments should have been made by Halliburton as regular business expenses. Halliburton reimbursed the fund last year. In the third case, Halliburton accidentally deleted a deduction made to pay for loans when it changed payroll plans in 1999. Employee loans defaulted. The mistake was discovered in 2003. Halliburton reimbursed affected employees who had tax penalty payments.
SBC has asked Illinois to deregulate residential phone service in the Chicago metropolitan area. Critics say the move could lead to higher phone bills. Details are in a filing yesterday with the Illinois Commerce Commission. SBC said classifying local phone service as "competitive'' would produce more choice and potentially lower rates for Chicago area residents. The company now must get ICC approval to change rates. The Citizens Utility Board, which is a consumer advocacy group, said deregulating the market would allow SBC to raise rates as high as it wants anytime it wants. SBC says it faces competition from 70 companies now providing local phone service in the Chicago market.
AT&T Chief Executive David Dorman says he won't stay on long after AT&T is acquired by SBC Communications. Dorman is opting for nearly $20 million in severance pay and consulting fees, rather than a subordinate post at the combined company. Dorman, who's 51, will serve as president of the merged company and a member of its board of directors for a brief transition period. Ed Whitacre, Jr., is chairman and CEO of SBC. He's still slated to hold both of those posts at the combined company, which will be assuming the AT&T corporate name and brand.
The Texas cotton production record stood for more than five decades before last year's bumper crop toppled the 1949 mark. Now one year later--the state record is predicted to fall again. The U.S. Department of Agriculture this week released its 2005 production forecast. Texas--which is the nation's leading cotton-producing state--is expected to bring in 7.84 million bales. That's about one percent more than last year's record of 7.78 million bales. Roger Haldenby with Plains Cotton Growers says "we've been blessed twice in a row.'' Haldenby says the higher production comes from timely rains, good weather throughout the growing season and cottonseed varieties that produce higher yields. Before last year's record, the most cotton produced in the state was 6.1 million bales.
Fans of big red Texas grapefruit can thank last year's historic white Christmas for icing leaves off trees. That helped clear space for this year's fruit--to really swell. But experts say order your holiday gift boxes soon and be prepared to pay a little more. Hurricane-damaged and disease-ravaged Florida groves could see a second dismal production year. Rio Grande Valley growers again expect to make up the difference. Texas growers expect the higher demand even though the snow and cold damaged trees last year and there will be fewer grapefruits overall. The ones that are left will be bigger and more valuable--with fewer needed to fill boxes. Farmer Jimmie Steidinger says the larger your size, the better the price. Along with early grapefruit, roadside stands in South Texas are starting to fill with oranges.
Oil and gas drilling operator Patterson-Uti Energy in Snyder, Texas says it suspects a former officer may have embezzled $70 million over five years. Patterson-Uti plans to hire legal counsel and forensic accountants to investigate "unauthorized payments'' the company made for assets that were never delivered. The company said it's too early to tell how the inquiry will affect previous financial results.
Shares of Dell rose today on the Nasdaq stock market as the computer maker deals with charges for faulty components and severance packages for fired workers. Round Rock-based Dell third-quarter earnings were down--compared to one year ago. Dell income fell 28 percent to $606 million, compared to $846 million in the same period last year. The results were hurt mostly by $442 million in charges, which the company had previously warned about in an October 31st filing. The bulk of the charge was to fix bad capacitors on older Optiplex business desktop PC's. Dell says sales came in at a company record of $13.9 billion--up eleven percent from last year.
Shares of Clear Channel Outdoor Holdings today rose slightly as the outdoor-advertising company had its trading debut on the New York Stock Exchange. The stock was up from the IPO price of $18 per share for 35 million shares. That price came in below the expected range of $20 to $22 per share set by underwriters Goldman Sachs Group and Deutsche Bank. San Antonio-based Clear Channel Outdoor was carved out of parent Clear Channel Communications. The $630 million offering of Clear Channel Outdoor was the first large deal since fertilizer producer CF Industries Holdings went public in August.
The Republican chairman of a U.S. Senate aviation panel says the battle over the Wright Amendment isn't going to be resolved anytime soon. Montana Senator Conrad Burns made the comments yesterday, when the fight went to Washington during a hearing. American Airlines and Southwest Airlines have been exchanging barbs over whether Congress should repeal the Wright Amendment. Southwest says--yes. American says--no. The 1979 law bars any airline from flying direct from Dallas Love Field beyond Texas, with the exception of four contiguous states and three others. The Wright Amendment was enacted to support Dallas-Fort Worth International Airport in its early days. American calls DFW home. Southwest is based at Love Field.
A generating unit at the Palo Verde Nuclear Power Plant in Arizona is undergoing a multi-million dollar repair job. Palo Verde provides electricity for households in Texas, as well as in New Mexico, California and Arizona. Officials say the improvements ultimately will boost the plant's output. Construction crews this week put twin steam generators into Unit One--one of three at the plant. The $235 million makeover will also include new turbines. A similar repair was completed at Unit Two in 2003. Unit Three's steam generators and turbines will be swapped out in 2007.
Baker Hughes in Houston today reports the number of rigs actively exploring for oil and natural gas in the u-s tumbled by 17 this week--to hit 1,479. One year ago the rig count was 1,259. Texas lost 13 rigs.