Friday PM October 12th, 2007
by: Ed Mayberry, October 12, 2007 5:10:00 am
Dallas-based homebuilder Centex Corporation reports the slump continues in the housing industry. It says its home sales fell 13 percent in its most recent quarter, and the company will take nearly $1 billion in charges to write down the value of land and other holdings. Centex says preliminary figures show net sales in the quarter ended September 30th fell to less than 6,000 units. The company closed on less than 7,400 units, down 14 percent from a year earlier. Centex said its backlog fell 38 percent to just over 9,600 units. Centex has operations in 25 states. It's scheduled to report financial results on October 23rd.
Retail gasoline prices fell across Texas this week. The weekly AAA Texas Gas Price Survey shows the average price of regular self-serve fell by four cents to $2.65 per gallon across Texas. The national average fell two cents to $2.76 per gallon. Houston's average is down over three cents to $2.57 per gallon. Auto club spokeswoman Rose Rougeau says the price downturn is aided by a mild hurricane season and slackening demand. El Paso has the highest gas prices of the survey's 11 Texas cities. The average price of regular self-serve there fell four cents to $2.79 per gallon. Corpus Christi has the cheapest gas at $2.54 per gallon. That's down six cents from last week.
American Airlines has raised many domestic fares by $5 each way but left prices unchanged on routes where it competes with low-cost carriers. The Thursday night increase affected both long advance-purchase tickets favored by vacationers and more costly last-minute tickets aimed at business travelers. Tim Smith with Fort Worth-based American says the fare increase is needed to cover high fuel costs. Fall is typically a slower time for air travel, which could make carriers reluctant to raise fares. But this week, United Airlines raised fares to Hawaii and other carriers went along. Analyst Jamie Baker with JP Morgan says the recent run-up in spot prices for jet fuel made it highly likely that other carriers will match American's fare hike. If the higher prices stick, it would mark the seventh such increase this year.
The Produce Marketing Association is hosting its four-day 2007 Fresh Summit International Convention and Exposition at the George R. Brown Convention Center. The association's president is Bryan Silbermann.
"It's all the major producers of fresh fruit and vegetables and flowers from all around the world. You'll have flowers from Colombia, You'll have bananas from Guatemala. You'll have Texas citrus. You'll have lettuce from California. You'll have grapefruit from Florida. You'll have product from Japan. You'll have all the world's produce all gathered in one place to appeal to the buyers, also from all over the world—people from 70 countries. We expect more than 16,000 people here." Ed: "So it's not a public event, it's for the industry, and they are basically networking with their supplier. Distribution sort of networking." "Absolutely. What we're doing creating a place in which buyers and sellers can get together, see the products that are available, see the new innovations and new products, in various new kinds of packaging, and new transportation techniques—everything that gets fruits and vegetables and flowers from the source of production to consumers in the greatest state possible, in the best quality possible. So it's not just a trade show. It's also educational events, networking, learning from people like General Colin Powell, who's the opening speaker today. It's a wide variety of different things, but it really is the meeting place for the world's produce industry."
The Houston Food Bank will be taking about 400,000 pounds of fresh produce away from the event on Monday.
More than 90,000 children's toys have been recalled for containing dangerous levels of lead. That's the word from the Consumer Product Safety Commission. Plano-based J.C. Penney is recalling more than 70,000 toys for excessive levels of lead in surface paint, including Chinese-made Winnie the Pooh play sets and decorative ornaments with a horse theme and art kits made in Taiwan and Vietnam. The company says an independent laboratory began the process of performing additional tests on its painted toys in August due to the recent increase in recalls of lead-contaminated toys. She says the process started sometime in August and the company alerted the CPSC to a potential recall just under two weeks ago. A government safety spokeswoman says this round of toy recalls is the direct result of the commitment that was made earlier this summer to rid the shelves of contaminated products. She says the number of toys in violation are expected to go down.
Conagra Foods has voluntarily recalled all of its Banquet pot pies and store brand varieties after they were linked to a nationwide salmonella outbreak. The company and federal officials are warning consumers not to eat the pies and to throw them away. Conagra is offering refunds. Conagra issued a consumer alert two days ago and asked stores to stop selling the chicken and turkey pies, but stopped short of a recall until Thursday night. The company says the decision to recall the pies, including its beef variety, isn't based on new information but on an abundance of caution. The store brand versions are sold under the names of Albertson's, Hill Country Fare, Food Lion, Great Value (sold at Wal-Mart stores), Kirkwood, Kroger, Meijer and Western Family. Consumers who want a refund for their pot pie should send the side panel of the package that contains the "P-9'' location code to: Conagra Foods/Dept. BQPP, P.O. box 3768, Omaha, Nebraska 68103-0768. Consumers with questions can call the company toll free at 1-866-484-8671.
Wal-Mart chief executive Lee Scott is defending the world's largest retailer's reliance on imports, against what he calls emerging economic nationalism. Speaking at a retailing conference, Scott said he would like to stock more American-made goods. But he says Wal-Mart's must offer the lowest price for consumers who cannot afford to spend more. Scott was answering a question from an audience member who wanted to know if Wal-Mart would buy more U.S.-made products to reduce the greenhouse gas emissions of global transport and to bring manufacturing jobs back from places like China. He said ''20 percent of Wal-Mart's customers don't have a checking account and they do not have the economic luxury of making a broader social statement''. Wal-Mart has been a lightening rod for critics who say overseas buying by retailers has cost U.S. manufacturing jobs. Wal-Mart has said it finds the lowest prices for its customers and creates jobs at its stores.
Baker Hughes in Houston reports the number of rigs actively exploring for oil and natural gas in the U.S. rose by 12 this week--to reach 1,767. One year ago the rig count stood at 1,728. Texas gained four rigs. Baker Hughes has tracked rig counts since 1944.