Friday AM March 2nd, 2007
by: Ed Mayberry, March 2, 2007 12:03:00 am
The U.S. Army may challenge up to $400 million billed by Halliburton’s subsidiary KBR because those expenses are not covered under the firm’s military support contract. In a filing with the Securities and Exchange Commission, KBR says the Army may withhold six percent of all past and current subcontractor costs to account for unreported private security charges. The company says the contracts do not bar subcontractors from hiring private security. KBR has a $20 billion logistics contract with the Pentagon, with around 50,000 KBR employees and subcontractors providing services ranging from mail delivery to fuel transportation in Iraq, Kuwait and Afghanistan. The military is required to provide security for them. Since 2003, 98 KBR contractors have been killed and hundreds more injured. The Department of labor says more than 770 civilian workers have died in the region. Halliburton is cutting ties with its KBR unit in the coming weeks.
Oscar Wyatt, Jr., and two other Houston oilmen will not be going to trial in New York for allegedly funneling millions of dollars to Saddam Hussein’s regime before August 13th. U.S. District Judge Denny Chin is allowing more time for defense attorneys to go through more than a million pages of documents. The trial was to have begun April 9th, but the defense team is still receiving documents--many of them in Arabic. Wyatt and Houston-based BayOil executives David Chalmers, Jr., and Ludmil Dionissiev are accused of trying to dodge controls keeping the late Iraqi leader from seizing proceeds from the United Nations Food-for-Oil program. Wyatt founded Houston-based Coastal Corporation.
Southern Union plans to form a master limited partnership with its Southwest Gas Storage assets. The Houston-based natural gas firm will use the partnership’s assets for additional storage projects. The pipeline business will be put into a master limited partnership by the third quarter of 2007.
METRORail set a record on Tuesday by carrying 56,388 passengers attending the opening night of the 2007 Houston Livestock Show and Rodeo. That represents over $100,000 in fares for the Metropolitan Transit Authority of Harris County, from those attending George Strait’s 20th performance at the annual event. Metro said the passenger number is the highest, single-day weekday total since METRORail opened for business in January 2004. Tuesday’s record is exceeded only by the 61,005 passengers who attended SuperBowl XXXVIII on February 1st, 2004.
ExpressJet Holdings has signed an agreement with Delta Airlines to fly ten regional jets under the carrier’s Delta Connection banner, according to the Houston Chronicle. The two-year agreement calls for ExpressJet to provide the service, maintain and finance the aircraft and for Delta to handle scheduling, marketing, pricing and revenue management. ExpressJet will start a new service beginning in April under its own name brand to 24 cities, after Continental Airlines downsized its regional carrier agreement.
Customers at George Bush Intercontinental Airport and William P. Hobby Airport will be able to use EZ Tag to pay for parking beginning March 30th. The airports will designate EZ Tag lanes for automated and fast payment, just like the toll roads operated by the Harris County Toll Road Authority.
According to a proxy statement, Schlumberger limited paid Chairman and Chief Executive Andrew Gould nearly $23 million for 2006. The oilfield services provider's profit soared last year due to heavy global exploration and marked price increases. Sixty-year-old Gould saw his salary rise from $1.5 million to $2.5 million last year. But the bulk of his $22.9 million compensation package was from stock and option awards with a grant-date value of $15 million. That's what Schlumberger said in the filing with the U.S. Securities and Exchange Commission. Schlumberger's principal offices are in Houston, Paris and The Hague. It provides products and services such as directional drilling, well completion and seismic technology that's used by oil companies as they explore for new oil and natural gas deposits.
The Labor Department says the number of Americans filing first-time claims for jobless benefits rose by 7,000 last week. The level of new claims is now put at 338,000. Analysts had been looking for a decline, but the week-to-week claims are volatile. The four-week average of claims rose to more than 335,000. That's the highest level for the four-week average since October 2005.
The government says personal incomes rose in January at the fastest rate in a year, and spending also rose more than expected. The Commerce Department reports that personal incomes rose by one percent in January and spending surged one-half of one percent. Incomes were boosted by bonus payments to high-income executives and pay raises for federal workers.
The Commerce Department says construction spending fell eight-tenths of one percent in January, a bigger-than-expected drop. Analysts were looking for a four-tenths decline. The weakness was led by a 1.8 percent plunge in spending on housing construction. It was the tenth consecutive fall in residential construction and a further sign of the steep slowdown in the once-booming sector. The housing slowdown has depressed overall economic activity.
Amid concern about the direction of the U.S. economy, there's some better-than-expected news about the manufacturing sector. The Institute for Supply Management says manufacturing activity surged last month, after a contraction in January. The ISM index came in at 52.3 percent, which is better than expected. The survey chair for the purchasing managers' group, Norbert Ore, says in fact that ''February proved to be a good month'' for manufacturing. He notes positive contributors including improving new orders, production and employment. The positive news helped to trim early declines in the stock market.
Prairie View A&M University and the North Harris County Montgomery Community College District are forming a joint-admissions and co-enrollment program between Prairie View’s College of Business and Cy-Fair College. The partnership will allow students completing their associate of arts degree in business at Cy-Fair to simultaneously enroll in Prairie View’s business college to meet the requirements for a Bachelor’s in Business Administration degree.
Volunteer Houston and ExxonMobil have named 65 local non-profit agencies that will participate in the 2007 ExxonMobil Community Summer Jobs Program. Applications for summer internships can now apply for paid internship positions. Now in its tenth year, the program enables the agencies to hire a college student for an eight-week internship to assist with the workload and staffing associated with the summer months. ExxonMobil will provide grants totaling more than $162,000 for intern salaries and Volunteer Houston expenses associated with the program.
General Motors says its U.S. auto sales grew an unexpected 3.7 percent in February. The leading automaker cites stronger truck demand, which offset some weakness in its cars. GM says its car sales fell 3.3 percent while truck sales grew 7.2 percent last month. Ford says its U.S. auto sales fell 13.5 percent in February, while DaimlerChrysler posted a 7.7-percent decline. Ford attributes its sales drop to a 30 percent reduction in fleet sales. DaimlerChrysler cited lower demand for vehicles from its U.S.-based Chrysler group. Ford says its car sales fell 22 percent while sales of light trucks decreased ten percent last month, compared with a year ago. Sales at Chrysler Group, which has entered a major restructuring amid weakened demand for its cars and trucks, decreased 8.3 percent from the same period a year ago. Meanwhile, brisk demand for passenger cars sent Toyota's sales up 12.2 percent last month from the same period a year ago. The Japanese auto maker says passenger cars sales were up more than 21 percent, while sales of trucks were up 2.4 percent. So far this year, Toyota sales are up almost 11 percent.
Texas oilman T. Boone Pickens sees today's stubbornly high oil price as evidence that daily global production capacity is at--or very near--its peak. Pickens thinks if demand for crude oil rises beyond the current global output of roughly 85 million barrels per day—prices will rise to compensate. He predicts alternative sources of energy will begin to replace petroleum. Pickens spoke with the Associated Press earlier this week in Doha, Qatar, on the sidelines of the Forbes magazine CEO conference. The 78-year-old former wildcatter now heads Dallas-based hedge fund
Blockbuster is in advanced talks to buy Movielink as a way to speed its entry into the online movie-downloading business. The Wall Street Journal reports that Blockbuster would pay less than $50 million in cash and stock for Movielink, which is owned by five major studios. The paper cited people familiar with the matter. The companies did not respond immediately to requests for comment from the Associated Press. Movielink has offered movie downloads since 2002.
Dell has opened its second customer call center in the Philippines. Vice President Dick Hunter says Round Rock-based based Dell plans to hire about 100 people per month until it reaches the target for the area of about 2,600 workers. Hunter says the expansion by the Texas company is evidence of the quality and talent of professionals in the Philippines. Dell's customer contact network includes more than 25 locations globally. Company officials declined to discuss investment details.
Dell saw its fourth-quarter profits plunge in what the struggling computer maker called a preliminary earnings report due to an ongoing federal investigation of the company's finances. Dell said it earned $673 million in the quarter ended February 2nd. That's compared to $1.01 billion a year earlier. Revenue fell four percent, to $14.4 billion. The company didn't provide year-ago figures in its release. Dell's earnings statements from the second and third quarters also remain preliminary and have yet to be filed with the Securities and Exchange Commission because of the ongoing federal accounting probe.