Friday February 17th, 2006
by: Ed Mayberry, February 17, 2006 5:02:00 am
Enron workers and retirees will share nearly $134 million to be distributed through the company's retirement plans. The Labor Department announced the decision late yesterday. The feds sued Enron, along with its board and several top executives, for alleged mismanagement of the retirement plans. Most of the money--nearly $125 million dollars--will come from Bear Stearns Investment Products, which acquired a bankruptcy claim in the Chapter 11 case. The sale of the claim was the result of a September settlement between Enron, the Labor Department, the retirement plans and private plaintiffs in the bankruptcy case. Its sale brings the total amount paid in the case for the Enron retirement plans to almost $221 million.
The federal fraud and conspiracy trial of two former Enron executives is in recess until Tuesday. The head of Enron's struggling broadband unit told jurors yesterday that his boss directed him to paint a rosy, misleading picture about it. Ken Rice testified in the trial of former CEO Jeff Skilling and Enron founder Ken Lay. Houston-based Enron eventually filed for bankruptcy. Rice was followed on the stand by Terry West, an accountant at what's left of Enron. West is a former Director of Corporate Planning who joined the company in 1981 when it was Houston Natural Gas. She explained for jurors the process Enron followed to develop its spending and earning plans to meet corporate goals of 15 percent yearly gains in earnings per share. Monday is a federal holiday--President's Day.
RadioShack says it plans to close up to 700 stores after reporting profits in the latest quarter dropped 62 percent from a year ago. It also plans to shutter distribution centers in Charleston, South Carolina and Southhaven, Mississippi to improve its financial performance. RadioShack blames falling sales of higher profit-margin items and says sales of wireless phones were disappointing. All the stores targeted for closing are company-operated. There are a total of nearly 7,000 RadioShack stores. There's no word on the number of Houston-area outlets that may close. RadioShack says it earned $49.5 million in the three months ended December 31st. The profit fall reflects a $62 million writedown in the value of its inventory, higher promotional expenses and a merchandise shift. Revenue grew five percent to $1.66 billion--helped by a four percent increase in stores open at least a year. For the full year, earnings fell 21 percent to $265.3 million. That's even though revenue climbed 50 percent to $5.08 billion. The company said the profit was lowered by $19 million from transition costs related to the termination of its deal with Verizon Wireless, with most of those costs in the fourth quarter.
Sunday's NBA All-Star Game at the Toyota Center is giving a boost to Houston-area hotels this weekend, according to Jordy Tollett with the Greater Houston Convention & Visitors Bureau. He says some 25,000 rooms in 25 area hotels are booked with NBA officials, out-of-town media, sponsors and fans, with nearly half staying in the Galleria area. Tollett says twice that many people may be coming through the city because of the game and pre-game activities. He estimates total economic impact between $55 to $60 million.
Clyde Drexler Sport Scene celebrated its grand opening at George Bush Intercontinental Airport today, featuring a memorabilia display from Drexler's personal collection. The store carries logo apparel and collectibles covering all of Houston's professional and college sports teams. The store is in Terminal C on North Terminal Road.
Retail gasoline prices fell this week for the third week in a row across Texas. The weekly AAA Texas gas price survey released today reports prices of regular, self-serve gas at Texas pumps averaged almost $2.19 per gallon. That's down six cents from last week. The national average is $2.27 per gallon--down about six cents from last week. Dallas and Beaumont have the state's most expensive regular-grade gasoline, averaging $2.21 per gallon. That's down six cents in both places. Corpus Christi continues to have the cheapest gas, averaging $2.01 per gallon. That's down nine cents. Auto club spokeswoman Rose Rougeau says rising crude oil and gasoline inventories have encouraged the sharp fall in crude and wholesale gasoline prices. She notes that crude oil prices fell below $58 a barrel earlier this week for the first time in almost two months.
Houston-based ConocoPhillips is offering the state of Alabama incentives to build support for its proposed liquefied natural gas terminal off the Alabama coast. The LNG terminal project is still under review by state and federal regulators. But this week, ConocoPhillips unveiled details of its "economic guarantee'' to Alabama, including a guaranteed supply of natural gas that would be made available to the state. The nation's third-largest energy company behind ExxonMobil and Chevron says it's willing to sign contracts dedicating as much as a fifth of the terminal's capacity for use in Alabama. The Mobile Register newspaper reports that under terms of the agreement, the state would get at no cost the option to buy up to 200 million cubic feet of gas per day at "market'' rates. That's the average spot market price. Spokesman Steve Lawless says the firm has to charge that rate, and not offer the state a discount, because of its obligation to shareholders. The company's incentives package has been sent to Governor Bob Riley. ConocoPhillips says the terminal would be built in federal waters about 12 miles south of Dauphin Island, Alabama.
Round Rock-based Dell posted slightly better-than-expected per-share quarterly earnings. But it told investors that revenue growth in the current quarter won't be up to Wall Street hopes. The computer maker's latest profit rose 52 percent to about $1 billion, thanks to strong sales to business and international customers. Sales rose 13 percent, in part because the quarter had one more week than the year-ago period. In the fiscal first quarter, Dell expects a revenue gain of six to nine percent. One analyst calls the company's prediction of first-quarter sales "very tepid'' and the latest in a string of increasingly conservative growth forecasts.
Jewelry retailer Zale Corporation today says store closing costs and a severance charge contributed to a 12 percent fall in its second-quarter profit. The Irving-based retailer says the president of its main jewelry retail chain, Zales Jewelers, has resigned. Zale reports a net income of $87.8 million for the quarter ended January 31st. The latest quarter's results include an inventory write-down and other costs from closing down certain Bailey Banks and Biddle stores. It also reflects a tax benefit from converting overseas income and a charge for severance and benefit payments from a management change. Revenue rose two percent to $994 million. Same-store sales rose 1.4 percent during the second quarter.
A second day of positive comments from the Federal Reserve, a big jump in new home construction and a strong earnings report from Hewlett-Packard sent stocks higher for a third straight session. Fed Chairman Ben Bernanke repeated for the Senate Banking Committee the message he had for the house Wednesday: that the economy is now flashing good growth signs and that interest rates will probably need to move higher. Before the market opened, the Commerce Department reported a 14.5-percent surge in housing starts in January. The market also drew strength from Hewlett Packard shares, which rose 7.5 percent a day after reporting strong earnings.
Analysts say the first look at inflation for the new year will probably show a moderate increase in wholesale prices. Economists surveyed by Dow Jones Newswires and CNBC are calling for a three-tenths-percent increase in the Overall Producer Price Index for January following a December surge of nine-tenths percent. They expect the "core rate,'' which strips out the food and energy sectors, was up two-tenths percent after increasing one-tenth percent the month before.