Friday PM February 1st, 2008
by: Ed Mayberry, February 1, 2008 5:02:00 am
It's the biggest annual profit ever posted by a U.S. company--$40.6 billion. ExxonMobil says it chalked up that profit in 2007, with the help of historic crude oil prices at the end of the year. ExxonMobil is the world's biggest publicly-traded oil company. It also set a U.S. record for the biggest quarterly profit, with net income of $11.7 billion for the final three months of 2007. That topped its own previous mark of $10.71 billion from two years earlier. The results aren't considered a surprise, given the record prices for a barrel of oil at the end of 2007. For much of the fourth quarter, they hovered around $90 a barrel. That's more than 50 percent higher than a year ago. The company's revenue rose 30 percent in the fourth quarter to more than $116 billion, from $90 billion a year ago.
Retail gasoline prices have fallen across Texas for the third week in a row. The AAA Texas gas price survey finds regular self-serve is averaging $2.87 per gallon in the 11 cities surveyed. That's three cents less than last week but 84 cents more than at the same point of 2007. Nationally, the pump price has fallen below $3 to $2.99 per gallon, a drop of two cents from last week. Houston's average is $2.86, down almost two cents from last week. Auto club spokeswoman Rose Rougeau says a slowing economy and recession fears appears to be curtailing demand for gasoline. That's increased crude oil inventories and decreased crude oil prices from record levels of $100 per barrel to around $90 now. El Paso has the lowest average price of $2.82 per gallon, down a penny from last week. The Austin-San Marcos area again has the highest average gas price in Texas at $2.92 per gallon, down two cents.
Dell is cutting more than 1,200 jobs as the computer maker reduces its sales and support work force. About 900 of those job cuts are at the Round Rock-based computer maker's call center in Canada. It's one of the biggest rounds of layoffs at Dell since May. That's when it announced that it would reduce its work force by ten percent, or about 8,800 jobs. Dell said that it would close its call center in Edmonton, Alberta, by the end of July. That's one of its two Canadian call centers. It says it'll make smaller reductions in Oklahoma City and Ottawa, Ontario. It's also abandoning plans to expand the Ottawa center. Dell also announced it would close 140 kiosks, mostly in shopping malls, where customers could examine and order computers but not buy them. The company is instead striking deals with more retailers to sell machines to consumers. The world's number two computer maker, which built its business on selling PCs directly to customers, has been expanding into retail to better compete with rivals. Besides Best Buy, Dell sells computers at Wal-Mart and Staples in the U.S. But Dell says it remains committed to its traditional direct-sales business. A Dell spokesman says the layoffs are part of a move to simplify the business and increase efficiency.
A South Korean court sentenced the local chief of Lone Star Funds to five years in prison. The Seoul Central District Court ruled that Paul Yoo, Lone Star's South Korean chief, manipulated the stock price of the credit card unit of Korea Exchange Bank. The Dallas-based private equity group owns a controlling stake in the KEB. The court also fined Lone Star and KEB $26.5 million each for stock price manipulation in a case closely watched by foreign investors. The Dallas-based fund blasted the decision. Lone Star and KEB both said they would appeal. Lone Star, KEB and Yoo were accused of conspiring to lower the share price of KEB's credit card unit in 2003 by spreading false information ahead of the bank's merger with it. Prosecutors had sought a ten-year prison term for Yoo. Their spokesman called the five-year term "too light for the crime,'' and said prosecutors also would appeal.
Relatives of civilian truckers killed in Iraq attended a closed-door hearing in New Orleans as they seek to continue their cases against a military contractor. A federal judge in Houston in 2006 threw out lawsuits filed by truckers and their families against Houston-based Halliburton and former subsidiary KBR over a deadly ambush. Six KBR drivers died in the 2004 attack. Others were wounded. One person was missing and presumed dead. Lawyers for truckers and their families asked the 5th U.S. Circuit Court of Appeals to reinstate their cases. No word yet when the three-judge panel will rule. Relatives of the truckers were allowed in court. The hearing was closed to the public and media. Halliburton and KBR asked for the closed hearing because company officials said confidential information would likely come up.
Microsoft is offering to buy search-engine operator Yahoo! for $44.5 billion in cash and stock. It's a move to boost its competitive edge against Google in the online services market. In a letter to Yahoo!'s board of directors, Microsoft Chief Executive Steve Ballmer says the company will bid $31 a share. That's a 62-percent premium to Yahoo!'s closing stock price on Thursday. Ballmer emphasizes that the deal isn't subject to financing. A year ago, Yahoo! opposed any acquisition talks amid optimism about future business moves, but Ballmer says its "competitive situation has not improved.'' Under terms of the proposed deal, Yahoo! shareholders could choose to receive cash or Microsoft common shares, with the total purchase consisting of 50 percent each of cash and stock. Microsoft says it intends to offer significant retention packages to Yahoo! engineers, key managers and employees. The software giant says it doesn't foresee any regulatory hurdles and expects to close the deal later this year.
Baker Hughes in Houston reports the number of rigs actively exploring for oil and natural gas in the U.S. increased by 16 this week--to reach 1,763. One year ago the rig count stood at 1,714. Texas added eight. Baker Hughes has tracked rig counts since 1944.