Tuesday AM May 13th, 2008
by: Ed Mayberry
Three former Enron broadband division executives are to be retried. Former division CEO Joe Hirko and software executive Rex Shelby will be retried November 3rd, followed by broadband strategist Scott Yeager in mid-January. They were first tried in 2005 in a three-month case that ended with jurors acquitting each of some counts and hung on others.
The federal government ran a budget surplus of $159.3 billion in April, smaller than a year ago. The Treasury Department reported that the budget surplus for April was 10.4 percent lower than in April 2007. The government traditionally runs a surplus in April, the month that tax returns are due. However, the weak economy has been dampening growth in revenues this year.
Personal computer and printer maker Hewlett-Packard reportedly is nearing a deal to buy information technology services provider Electronic Data Systems for between $12 billion and $13 billion. The Wall Street Journal reported the talks Monday on its Web site. The newspaper said the acquisition could be announced as early as Tuesday, citing unnamed people familiar with the matter. HP spokesman Ryan Donovan declined to comment Monday. Plano-based EDS didn't immediately respond to messages. Buying EDS would give Palo Alto-based HP more tools to compete against IBM in the lucrative field of technology consulting and customer support.
Court proceedings in New York and Texas were delayed while Clear Channel Communications, its buyers and banks try to settle the feud over whether the banks must fund promised loans for the $19.5 billion deal. Clear Channel and its private equity buyers, Bain Capital and Thomas H. Lee Partners, sued a consortium of six banks, accusing them of trying to undermine the deal by changing the terms. That lawsuit is pending in a Texas court, while the equity firms have a separate suit pending against the banks in New York court. Pre-trial hearings in San Antonio and the trial in New York were delayed. San Antonio-based Clear Channel confirmed the postponement was designed to allow the parties to continue settlement talks.
A day-long “Flex in the City” conference is set for today at the George R. Brown Convention Center, co-sponsored by the Department of Labor’s Women’s Bureau and the city of Houston. The Flex-Options program encourages employers to provide flexibility in the workplace. The program brings together corporate executives and entrepreneurs who volunteer to mentor other business owners interested in developing flexible policies and programs.
The second annual Celebrate! Enterprise business festival begins today at the Wortham Theatre’s Grand Foyer and at Warehouse Live in downtown Houston. The four-day Houston Business Journal event includes the Houston Growth Summit, the Battle of the Business Bands, the Houston Idea*Ation Awards, the Houston Healthcare Congress, the Houston Energy Forum and the Best CFOs of the Year.
Twenty-five conventions, trade shows and other events are set for June in Houston, according to the Greater Houston Convention and Visitors Bureau. More than 48,470 attendees will spend an estimated $47.2 million in Houston during the month. Conventions in June include the American Wind Energy Association’s Windpower 2008 June 1st through the 4th at the George R. Brown Convention Center. The Republican Party olds its state convention June 12th through the 14th at the convention center.
Twenty-six Houston Independent School District teachers are traveling this summer to enrich their teaching, tanks to grants from Fund for Teachers. The National Education Foundation based in Houston is awarding more than $400,000 in grants to more than 100 teachers in Houston. Some are traveling to Italy and Greece to study art. Others are going to South Africa to study peace and equality movements fostered by Nelson Mandela. Teachers are also traveling to Tanzania, New Zealand, Costa Rica, Easter Island, England, Holland, Iceland and India.
Despite extensive efforts to educate workers about saving for retirement, many employees are not doing a good job of managing their company-sponsored 401(k) accounts. A new study of nearly one million retirement portfolios indicates that 69 percent have inappropriate risk or diversification of holdings and 36 percent have worrisome concentrations of company stock. In addition, one-third of savers aren't putting enough aside to qualify for the full company matching contribution. The problems are especially pronounced among young and low-paid workers, according to the study by Financial Engines, a California-based firm that provides investment advice and managed accounts for defined contribution plans like 401(k)s. Jeff Maggioncalda, Financial Engines' president and chief executive, says in an interview that some of the performance problems will dissipate as companies adopt automatic enrollment programs for workers, as authorized by the Pension Protection Act two years ago. Still, he said, the data should help plan sponsors and other industry professionals “figure out who needs help and how to get it to them.”
Across the country, high gas prices are kicking bicycle sales into high gear. Bike dealers say they're seeing customers dusting off their old two-wheelers--or buying new ones--to cope with rising fuel prices. A spokesman for the Washington. D.C.-based League of American Bicyclists says there's a definite increase in people riding bikes. He says, “it's due to a mixture of things but escalating gas prices is one of them.'' About 18 million bicycles have been sold annually in the U.S. over the past few years. The STRONG>National Bicycle Dealers Association says that adds up to about $6 billion in annual sales. A spokesman says bike shops across the country are reporting strong sales so far this year. And more people are bringing in bikes that have been idling at home. A Bismarck, North Dakota, man who opened a shop in April says he sold more than 50 bikes in the first month--double his projections. He says everyone who walks in the store is talking about gas prices.
The government has given itself more time to consider whether to let stand tariffs--set by Western Refining Pipeline--to send crude on the line. The Federal Energy Regulatory Commission accepted the tariffs--which range from $6 to $7.50 a barrel--on March 7th, and they went into effect three days later. Western's 424-mile pipeline stretches from west Texas to northern New Mexico and briefly crosses the Navajo Nation. The Navajo Nation and Resolute Natural Resource have protested the tariffs, saying they were discriminatory and would harm producers in the Four Corners region. The tribe sought the rehearing. The Navajo Nation currently does not ship on Western's pipeline, but the tribe said it intends to. Gary Hanson with Western Refining in El Paso says the FERC order “just buys them more time.” Hanson declined to comment on the tariffs and the Navajo Nation's claim that the rates would harm producers in the region.
Apple says its online stores in the U.S. and U.K. are sold out of the iPhone, a sign supplies are being winnowed ahead of the launch of the device's next generation that will feature faster Internet surfing speeds. The Cupertino-based company has confirmed that the iPhone is out of stock online, but added that brick-and-mortar stores run by Apple and iPhone carriers including San Antonio-based AT&T might still have units available. Apple spokeswoman Natalie Kerris declined to comment on reasons for the shortage and on Apple's plans for an update to the device, which is widely expected to be unveiled in June at Apple's worldwide developers conference in San Francisco.
Imperial Sugar reports it swung to a first-quarter loss, mostly on charges related to a deadly refinery explosion in Georgia. Sugar Land-based Imperial lost $15.5 million in the three months ending March 31st. The company took a net pretax charge of $12.1 million related to the February 7th explosion and fire at a plant in Wentworth, Georgia. The company earned $8.7 million in the same quarter last year. Revenue also tumbled--mostly because of the Wentworth loss.