Warren Buffett

Gannett, largest US newspaper publisher, earns after cutting costs

2010-06-27T08:50:00.000-07:00

Cost cutting produced a solidly profitable third quarter for Gannett Co.

But the latest financial results for the country's largest newspaper publisher show another big decline in ad revenue.

Gannett owns USA Today, more than 80 other newspapers and 23 television stations.

Its earnings Monday follow a similar report last week from McClatchy Co., another big newspaper owner that has managed to profit even as timberland boots its main revenue source withers.

Gannett's ad sales in its publishing division dropped 28 timberland mens boots percent from a year ago. That follows a 32 percent decline in the second quarter and a 34 percent timberland boots decline in the first.

Layoffs and other belt-tightening moves helped the McLean, timberland boots Virginia-based company earn $73.8 million, or 31 cents per share.

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Comcast Claims Interactive Ad Success

2010-06-27T08:46:00.000-07:00

TV ads that let viewers set reminders to watch or record upcoming shows are already paying off, according to one Comcast Corp. executive.

In one instance of an interactive TV ad campaign tested in San Francisco, Comcast Spotlight director of product management Kathleen DeBenedictis credits such "reminder" ads for bringing in more viewers in key demographics. "It's all about driving viewership to those programs," DeBenedictis told the audience here yesterday.

The campaign included interactive reminder spots run by Lifetime Television and CBS on Comcast's San Francisco system, where it says it has 1.2 million interactive TV-enabled homes. Two days prior to the premiere of Lifetime’s Project Runway series -- which targets women 18 to 49 -- the network ran "remind record" spots. The campaign resulted in a 74 percent higher viewership for the 18-to-49 demo in San Francisco compared to other top 20 markets, DeBenedictis said.

DeBenedictis said Comcast Spotlight has run about 200 paid interactive TV ad campaigns, including 15-second and 30-second tune-in campaigns from programmers. It is also running spots from advertisers that allow subscribers to request more information about a product.

Comcast also surveyed subscribers to get feedback on interactive ad campaigns. Some of the results: 98 percent of subscribers surveyed said the interactive ads are easy to use; 95 percent thought the interactive ads were appropriate; and 97 percent said they’d use interactive TV ads again in the future, DeBenedictis said.

“We’re definitely seeing that viewers are responding positively to these applications, and they perceive them as valuable.”

Refreshing 'tired' stories
In addition to interactive advertising, Comcast is stepping up its focus on interactive TV programming. The MSO plans to deploy an EBIF-based ITV application for CNN, which will afford digital cable subscribers access to news stories supplied by CNN.com, Turner Broadcasting vice president of business development Michael Quigley said Thursday.

The application, which Turner has been developing for about two years, will prompt subscribers to press the select buttons on their remote controls to access text-based stories and photos supplied by CNN.com, Quigley said.

The ITV application will also allow viewers to access VoD content from CNN from its linear TV channel. The app is designed to keep viewers tuned to the channel longer, according to Quigley.

“One of the things we have a need to address at CNN is when the viewer tunes to the network, and says, ‘I’m tired of the story.’ In that situation, without some kind of interaction, he could ultimately [change channels],” Quigley said.

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Eaton to supply CH-53K helicopter cockpit control panels, dimming controllers

2010-06-27T08:43:00.000-07:00

Engineers at Sikorsky Aircraft Corp., a United Technologies company in Irvine, Calif., needed lighted control panels and dimming controllers for its CH-53K military heavy-lift helicopter under development for the U.S. Marine Corps.

They found what they needed at Eaton Corp., a Cleveland-based designer and manufacturer of electrical systems and components for aircraft, industrial, and mobile equipment.

Eaton Corp. won a contract from Sikorsky to design, develop, and supply the helicopter control panels and controllers. Eaton also holds a contract for the helicopter’s hydraulic power generation system, integrated fuel system, and fluid conveyance package.

According to the contract, Eaton personnel will provide the lighted control-panel support hardware for five helicopter ship sets, as well as system development test sets, during the development phase of the program. The development phase runs through 2014.

Sikorsky staff anticipates the production of more than 156 helicopters for the U.S. Marine Corps. Sikorsky holds a contract valued at approximately $20 million and, when combined with anticipated foreign military sales, is expected to exceed $26 million over the approximate 12-year life of the program.

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GlaxoSmithKline Settles 200 Birth Defects Cases Linked to Antidepressant

2010-06-27T08:39:00.000-07:00

Pharmaceutical giant GlaxoSmithKline has entered into confidential settlements with nearly 200 families who claimed that its antidepressant Paxil caused congenital birth defects.

Most of the claims alleged that babies born to mothers taking Paxil suffered heart defects. Last October, a suit filed on behalf of Lyam Kilker said he was born with three cardiac defects, including a hole between two chambers of his heart that disrupted the aorta.

Kilker’s case is the only one to have gone to trial, and a Philadelphia jury awarded Kilker’s family $2.5 million in compensatory damages. Plaintiffs argued that animal testing revealed potential problems with Paxil, but the company did not follow up with additional tests. A company memo introduced as evidence during the trial also revealed that Glaxo considered covering up any negative test results. “If neg, results can bury,” the 1997 memo said.

In 2005, the Food and Drug Administration warned doctors about a 35,000-person study that found that pregnant women on Paxil were twice as likely to have a child with defects than women taking other antidepressants.

The terms of the settlement will remain confidential. At least 600 Paxil birth defect cases have been filed, and up to 100 cases were settled prior to the settlement announced on Thursday. Paxil generates nearly $3 billion in annual sales, ConsumerAffairs.com reports.

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Wabco raises yearly outlook as car sales rise

2010-06-27T08:28:00.000-07:00

Commercial auto parts maker Wabco Holdings Inc. on Friday raised its guidance due to better-than-expected demand worldwide.

The availability of credit has loosened, meaning businesses can buy cars and trucks more easily.

May marked the seventh straight month of year-over-year sales increases for the auto industry and demand for the electronic and mechanical products that Wabco makes is up.

The company now expects earnings in 2010 to be $1.75 to $2.05 per share, from earlier guidance of $1.40 to $1.80 per share. That excludes a fine levied on Wabco by the European Commission.

Analysts polled by Thomson Reuters, on average, predict a profit of $1.77 per share. Analyst estimates typically exclude one-time items.

Wabco has its headquarters in Brussels, Belgium. Company shares were unchanged at $33.63 Friday.

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5 Steps to Build Your Brand and Reputation

2010-06-27T08:10:00.000-07:00

Whether you're trying to build your personal brand, business brand or a product brand, the basic steps to developing a successful brand are always the same. Brands aren't built overnight. Be prepared to commit to the long-term and don't give up.

Building a brand is just like building a reputation in that you need to prove yourself again and again in order for people to put their trust in you and become loyal to you. This holds true for individuals, small companies and even the largest, most trusted brands, such as Kraft Foods and Disney.

With that in mind, check out the 5 steps to building your brand below:

1. Be specific

Know what your brand stands for, and know what your brand promises. Your brand promise should be precise and attainable, and you should be able to communicate it clearly. For example, don’t just say your brand stands for quality. That’s a broad statement that any individual or company can make. How does your brand specifically live and breathe quality? Those specifics are what will make your brand stand out from your competition.

2. Be authoritative

Once you know what your brand stands for and promises, don’t be afraid to flaunt it. You need to make everyone else believe you’re the leader and authority in your area of expertise and specialization. Don’t meekly communicate your message. Say it with powerful words and conviction.

3. Be consistent

Get your brand message out there and don’t waiver on it. I’ve read statistics in the past that state as soon as you’re tired of your message, your customers are just starting to recognize it. Commit to your brand message. A consistent message and customer experience are critical elements to building your brand.

4. Be honest

In today’s world, people welcome honesty and transparency, and your business will be rewarded for it. Don’t offer something you can’t deliver. Instead, admit your fallibility and deliver on your promises. Integrity goes a long way.

5. Be relentless

Get your brand message out there. Then get it out again and again and again. People are inundated with a myriad of messages each day. It’s not only critical that you try to stand out from the competition but it’s equally important that you are not forgotten. Don’t drop the ball on communicating your brand promise and building your brand image. Your efforts will be rewarded in time.

These rules apply to company, product and personal branding. They are simple, basic rules that are critical to your brand’s overall success.

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Unusual Trading Activity for Kraft Foods Inc.

2010-06-27T08:06:00.000-07:00

Unusual volume of call contracts was traded today. There were 68,619 call contracts traded compared to the ten day average volume of 5,414 contracts. On the put side, 2,164 put contracts exchanged hands. Today's traded Put/Call ratio is 0.03. There were 31.71 calls traded for each put contract.

The following alerts were raised:
- Unusual Call Volume
- Low Put/Call Ratio

Put/Call ratio is often used to measure investment sentiment, the ratio serves as a predictor of investor behavior. Unusual options volume provides reliable clues that the stock is expected to make a move.

Kraft Foods Inc. closed at $29.47 in the last trading session and opened today at $29.57. The stock price declined $0.14 (-0.47%) to $29.33 in today's trading session. KFT is trading between the range of $29.28 - $29.60. Volume is 15,855,927 in relation to the three month average volume of 12,806,300 shares. KFT is trading below the 50 day moving average and higher than the 200 day moving average. The stock's 52 week low is $25.08 and 52 week high is $31.09.

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Oil nears Florida as BP tries risky cap move

2010-06-02T02:40:00.000-07:00

As submersible robots made another risky attempt to control the underwater Gulf oil gusher, the crude on the surface spread, closing in on Florida. BP's stock plummeted and took much of the market down with it, and the federal government announced criminal and civil investigations into the spill.

The stakes couldn't be higher.

After six weeks of failures to block the well or divert the oil, the latest mission involved using a set of tools akin to an oversized deli slicer and garden shears to break away the broken riser pipe so engineers can then position a cap over the well's opening.

But it's a big gamble: Even if it succeeds, it will temporarily increase the flow of an already massive leak by 20 percent -- at least 100,000 gallons more a day. That's on top of the estimated 500,000 to 1 million gallons gushing out already.

In Florida, officials confirmed an oil sheen about nine miles from the famous white sands of Pensacola beach. Crews shored up miles of boom and prepared for the mess to make landfall as early as Wednesday.

Florida would be the fourth state hit. Crude has already been reported along barrier islands in Alabama and Mississippi, and it has impacted some 125 miles (201 kilometers) of Louisiana coastline.

More federal fishing waters were closed, too, another setback for one of the region's most important industries. More than one-third of federal waters were off-limits for fishing, along with hundreds of square miles of state waters.

BP's stock nose-dived on Tuesday, losing nearly 15 percent of its value on the first trading day since the previous best option -- the so-called top kill -- failed and was aborted at the government's direction. It dipped steeply with Holder's late-afternoon announcement, which also sent other energy stocks tumbling, ultimately causing the Dow Jones industrial average to tumble 112.

If BP's new effort to contain the leak fails, the procedure will have made the biggest oil spill in U.S. history even worse.

It is an engineer's nightmare. They're trying to fit a 21-inch cap over a 20-inch pipe a mile away. That's just horrendously hard to do. It's not like you and I standing on the ground pushing -- they're using little robots to do this.

Since the Deepwater Horizon rig exploded on April 20, eventually collapsing into the Gulf of Mexico, an estimated 20 million to 40 million gallons (76 million to 151 million liters) of oil has spewed, eclipsing the 11 million that leaked from the Exxon Valdez disaster.

BP PLC's Doug Suttles said that although there's no guarantee the company's latest cut-and-cap effort to close off the leak will work, he remained hopeful, but wouldn't guarantee success.

Engineers have put underwater robots and equipment in place this week after a bold attempt to plug the well by force-feeding it heavy mud and cement -- called a "top kill" -- was aborted over the weekend. Crews pumped thousands of gallons of the mud into the well but were unable to overcome the pressure of the oil.

The company said if the small dome is successful it could capture and siphon a majority of the gushing oil to the surface. But the cut and cap will not halt the oil flow, just capture some of it and funnel it to vessels waiting at the surface.

The British oil giant has tried and failed repeatedly to halt the flow of the oil, and this attempt like others has never been tried before a mile beneath the ocean. Experts warned it could be even riskier than the others because slicing open the 20-inch (51-centimeter) riser could unleash more oil if there was a kink in the pipe that restricted some of the flow.

But BP's best chance to actually plug the leak rests with a pair of relief wells but those won't likely be completed until August.

The company has carefully prepared the next phase, knowing that another failure could mean millions more gallons spew into the ocean and lead to even more public pressure. And they say they have learned valuable lessons from the failure of a bigger version of the containment cap last month that was clogged with icelike slush.

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Wall Street Slides as Energy Shares Hit

2010-06-01T22:13:00.000-07:00

Stocks fell on Tuesday as energy shares slid after the latest failed attempt to halt the oil spill in the Gulf of Mexico and the U.S. government announced a criminal probe into the disaster.

Investors punished shares of companies directly involved with the spill and losses accelerated into the close following the news of the investigation.

"It's the fact that no one can really quantify the cost of the BP disaster out there," said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas .

"There's so much uncertainty, investors are stepping to the sidelines."

U.S.-listed shares of BP Plc , which owns the well, tumbled 15 percent. The losses signaled growing frustration over the difficulty of sealing off the worst oil spill in U.S. history.

The Dow Jones industrial average <.DJI> dropped 112.61 points, or 1.11 percent, to 10,024.02. The Standard & Poor's 500 Index <.SPX> fell 18.70 points, or 1.72 percent, to 1,070.71. The Nasdaq Composite Index <.IXIC> gave up 34.71 points, or 1.54 percent, at 2,222.33.

Decliners carried the day on the New York Stock Exchange , outpacing advancers by almost 4 to 1.

BP's American Depositary Receipts have now lost about $75.03 billion since the April 20 rig explosion, and the stock has the lowest price-to-earnings ratio of any of the major oil companies as a result of the fall.

Halliburton Co, which performed some work on the well, lost 14.8 percent after Goldman Sachs removed the company from its "conviction buy list.

Transocean , which owns the rig, slid 11.9 percent to $50.04, while the S&P energy index <.GSPE> shed 4.3 percent.

Markets were choppy throughout the day and had earlier found support from data that showed manufacturing expanded for a tenth straight month in May.

In addition to the stronger-than-expected manufacturing data, construction spending recorded its largest gain in nearly 10 years in April, government data showed.

Despite the positive U.S. data, investors worry about what impact the euro zone's debt crisis will have on global economic growth. Indeed, data showed a more sluggish pace in euro zone manufacturing, while the rate of China's factory output eased.

On the upside, Apple Inc rose 1.5 percent to $260.83 as a successful international launch of its iPad prompted analysts to raise earnings and sales estimates.

In merger news, ev3 Inc jumped 17.4 percent to $22.22 after Covidien Plc agreed to buy the maker of stents and other vascular devices for $2.6 billion. Covidien shares slipped 2.7 percent to $41.24.

Regarding the oil spill investigation, the FBI and other federal agencies, will participate.

"If we find evidence of illegal behavior, we will be forceful in our response," U.S. Attorney General Eric Holder said in New Orleans.

About 9.39 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, shy of last year's estimated daily average of 9.65 billion.

Declining stocks outnumbered advancing ones on the NYSE by 2,403 to 642, while on the Nasdaq, decliners beat advancers 2,224 to 455.

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Weak Euro Propels German Economy

2010-06-01T21:48:00.000-07:00

Germany's economy appears to be gaining steam despite mounting worries the fiscal troubles in countries along the euro-zone's fringe could undermine Europe's recovery.

Germany's economy, the driver of the European economy, is likely to expand at a 3% to 4% rate this quarter, economists say, a forecast supported by a string of strong reports on employment, consumer spending and manufacturing Tuesday. Lower interest rates and a weaker euro have propelled Germany's investment and export-driven economy.

The recovery could still falter, analysts warn. Just as the U.S. subprime-mortgage crisis thwarted Germany's expansion two years ago, Europe's brewing financial contagion could hamper growth if German banks face extensive losses and are unable to extend credit to industry and households. Other countries in Europe face years of weak growth or recession, making Germany vulnerable to any slowdown in markets including China or the U.S.

Still, while the German public was strongly opposed to rescuing Greece, and its central bank is openly at odds with the European Central Bank's decision to purchase Greek and other struggling countries' debt, from an economic standpoint it has little to complain about.

"As a firm, we're always one of the very first to experience the first affects of a crisis," says Dietmar Ahl, chief executive of Günther Bechtold GmbH, a Bavaria-based sheet metal processor and manufacturer. "That also has the benefit of making us one of the first to see a recovery. And that's what's happening right now."

Business should be up 25% this year, Mr. Ahl says, after falling almost 50% between 2007 and 2009. The company has been able to add some temporary workers to its 66-person staff.

German unemployment fell 45,000 in May, more than twice the drop expected by economists, bringing the unemployment rate down to 7.7%, the lowest since December 2008. The EU-harmonized figure is even lower at just over 7%.

The German numbers highlight the divide between its economy and that of the greater euro zone. The European Union's Eurostat agency said Tuesday that unemployment across the 16 countries that share the euro rose to 10.1% in April, its highest level in 12 years, driven by increases in Spain, Portugal, Ireland and Italy. But Eurostat said there are signs the jobless rate may be close to peaking after only 25,000 people joined jobless queues in April, the second-smallest increase since March 2008.

German manufacturing slowed in May, according to purchasing manager reports released Tuesday by Markit, but continues to expand at a healthy pace. Factory output slowed more markedly in the euro zone as a whole, highlighting the region's fragility.

"The short-term outlook is very favorable" for Germany, said Alexander Koch, economist at UniCredit Group. He thinks Germany's GDP could swell 4%, at an annualized rate, this quarter. "The momentum is strong, which bodes well for the labor market in coming months," Mr. Koch says.

JPMorgan Chase expects Germany's GDP to expand 3% this quarter, though that could be revised higher in light of recent data, economist Greg Fuzesi says. That should propel euro zone growth to around 3% this quarter as well, Mr. Fuzesi says. GDP in the currency bloc advanced just 0.8%, at an annualized rate, last quarter, well below growth rates seen in the US and developing countries such as China and India.

The total number of German unemployed fell last month to 3.24 million. It was once feared that unemployment would top four million or even five million. The labor market is one area where Germany has outperformed the U.S., where the jobless rate is 9.9% despite strong economic growth at the end of 2009 and early 2010.

A number of forces are at work here, economists say. The Germany statistics office changed the way it classifies unemployed people who are using employment agencies, which reduced the reported numbers of unemployed. Government subsidy programs aimed at keeping people in their jobs by paying part of their wages and employment taxes kept as many as 500,000 from going on the jobless rolls, some economists estimate.

The number of people on Germany's subsidized work program, known as Kurzarbeit, has fallen roughly in half since it peaked at 1.5 million one year ago.

That suggests a gamble Germany made at the start of the crisis is paying off. Kurzarbeit has been in place for decades, but the government expanded the program during the recent recession. Critics warned that by keeping people in their jobs, the government was simply delaying an inevitable adjustment that would have to come in order for Germany to stay competitive with other economic powerhouses including the U.S. and China.

But now that global trade is recovering, German exporters have the staff, and expertise, on hand to meet demand.

"Right now, the Germany industry is starting to heal itself very slowly," says Matthias Freund, who owns Freund Human Resources Consulting, which focuses on management recruitment. "Firms are starting to hire employees again, and you can sense that the business climate is getting better."

Europe's debt crisis could still derail expansion, because German banks are heavily exposed to the debt of at-risk peripheral countries like Greece, Portugal and Ireland. But for now a weaker euro is shielding the economy from financial turbulence. The euro now fetches around $1.23 against the U.S. dollar, down more than 15% since December.

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Top 5 Companies in the Independent Power Producers Industry With the Best Relative Performance (DYN, HNP, MIR, NRG, CEG)

2010-06-01T20:21:00.000-07:00

Below are the top five companies in the Independent Power Producers industry as measured by relative performance. This analysis was compiled based on yesterday's trading activity as we search for stocks that have the potential to outperform.

Dynegy (NYSE:DYN) ranks first with a gain of 2.35%;

Huaneng Power International (NYSE:HNP) ranks second with a gain of 1.62%;

and Mirant (NYSE:MIR) ranks third with a gain of 1.55%.

NRG Energy (NYSE:NRG) follows with a gain of 1.43%

and Constellation Energy (NYSE:CEG) rounds out the top five with a gain of 1.17%.

SmarTrend is bullish on shares of DYN and our subscribers were alerted to Buy on May 25, 2010 at $4.76. The stock has risen 9.9% since the alert was issued.

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GSK settles more lawsuits over Avandia

2010-06-01T20:16:00.000-07:00

Thousands of lawsuits alleging that drug maker GlaxoSmithKline’s diabetes drug Avandia caused heart attacks were settled, the company confirmed today.

The cases were originally scheduled to go to court in Philadelphia this month. GlaxoSmithKline declined to provide details of the settlement.

The first product liability case involving Avandia is expected to go to court in the U.S. in October.

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Why is consumer economy is dead even 1 year after the financial crisis

2010-06-01T20:14:00.000-07:00

One year after the near collapse of the global financial system, this much is clear: The financial world as we knew it is over, and something new is rising from its ashes.

Historians will look to September 2008 as a watershed for the U.S. economy.

On Sept. 7, the government seized mortgage titans Fannie Mae and Freddie Mac. Eight days later, investment bank Lehman Brothers filed for bankruptcy, sparking a global financial panic that threatened to topple blue-chip financial institutions around the world. In the several months that followed, governments from Washington to Beijing responded with unprecedented intervention into financial markets and across their economies, seeking to stop the wreckage and stem the damage.

One year later, the easy-money system that financed the boom era from the 1980s until a year ago is smashed. Once-ravenous U.S. consumers are saving money and paying down debt. Banks are building reserves and hoarding cash. And governments are fashioning a new global financial order.

Congress and the Obama administration have lost faith in self-regulated markets. Together, they're writing the most sweeping new regulations over finance since the Great Depression. And in this ever-more-connected global economy, Washington is working with its partners through the G-20 group of nations to develop worldwide rules to govern finance.

"Our objective is to design an economic framework where we're going to have a more balanced pattern of growth globally, less reliant on a buildup of unsustainable borrowing . . . and not just here, but around the world," said Treasury Secretary Timothy Geithner.

The first faint signs that the U.S. economy may be clawing its way back from the worst recession since the Great Depression are only now starting to appear, a year after the panic began. Similar indications are sprouting in Europe, China and Japan.

Still, economists concur that a quarter-century of economic growth fueled by cheap credit is over. Many analysts also think that an extended period of slow job growth and suppressed wage growth will keep consumers — and the businesses that sell to them — in the dumps for years.

"Those things are likely to be subpar for a long period of time," said Martin Regalia, the chief economist for the U.S. Chamber of Commerce. "I think it means that we probably see potential rates of growth that are in the 2-2.5 (percent) range, or maybe . . . 1.8-1.9 (percent)." A growth rate of 3 percent to 3.5 percent is considered average.

The unemployment rate rose to 9.7 percent in August and is expected to peak above 10 percent in the months ahead. It's already there in at least 15 states. Regalia thinks that it could be five years before the U.S. economy generates enough jobs to overcome those lost and to employ the new workers entering the labor force.

All this is likely to keep consumers on the sidelines.

"I think this financial panic and Great Recession is an inflection point for the financial system and the economy," said Mark Zandi, the chief economist for forecaster Moody's Economy.com. "It means much less risk-taking, at least for a number of years to come — a decade or two. That will be evident in less credit and more costly credit. If you are a household or a business, it will cost you more, and it will be more difficult to get that credit."

The numbers bear him out. The Fed's most recent release of credit data showed that consumer credit decreased at an annual rate of 5.2 percent from April to June, after falling by a 3.6 percent annual rate from January to March. Revolving lines of credit, which include credit cards, fell by an annualized 8.9 percent in the first quarter, followed by an 8.2 percent drop in the second quarter.

That's a sea change. For much of the past two decades, strong U.S. growth has come largely through expanding credit. The global economy fed off this trend.

China became a manufacturing hub by selling attractively priced exports to U.S. consumers who were living beyond their means. China's Asian neighbors sent it components for final assembly; Africa and Latin America sold China their raw materials. All fed off U.S. consumers' bottomless appetite for more, bought on credit.

"That's over. Consumers can do their part — spend at a rate consistent with their income growth, but not much beyond that," Zandi said.

If U.S. consumers no longer drive the global economy, then consumers in big emerging economies such as China and Brazil will have to take up some of the slack. Trade among nations will take on greater importance.

In the emerging "new normal," U.S. companies will have to be more competitive. They must sell into big developing markets; yet as the recent Cash for Clunkers effort underscored, the competitive hurdles are high: Foreign-owned automakers, led by Toyota, reaped the most benefit from the U.S. tax breaks for new car purchases, not GM and Chrysler.

Need a loan? Tough luck: Many U.S. banks are in no condition to lend. Around 416 banks are now on a "problem list" and at risk of insolvency. Regulators already have shuttered 81 banks and thrifts this year.

The Federal Deposit Insurance Corp. reported on Aug. 27 that rising loan losses are depleting bank capital. The ratio of bank reserves to bad loans was 63.5 percent from April to June, the lowest it's been since the savings-and-loan crisis in 1991.

For all that, the U.S. economy does seem to be rising off its sickbed. The latest manufacturing data for August point to a return to growth, and home sales are rising. Indeed, there are many encouraging signs emerging in the global economy.

It's all growth from a low starting point, however, and many economists think that there'll be a lower baseline for U.S. and global growth if the new financial order means less risk-taking by lenders and less indebtedness by companies and consumers.

That seems evident now in the U.S. personal savings rate. It fell steadily from 9.59 percent in the 1970s to 2.68 percent in the easy-money era from 2000 to 2008; from 2005 to 2007, it averaged 1.83 percent.

Today, that trend is in reverse. From April to June, Americans' personal savings rate was 5 percent, and it could go higher if the unemployment rate keeps rising. Almost 15 million Americans are unemployed — and countless others are underemployed or uncertain about their job security, so they're spending less and saving more.

A few years ago, banks fell all over themselves to offer cheap home equity loans and lines of consumer credit. No more. Even billions in government bailout dollars to spur lending haven't changed that.

"The strategy that was stated at the beginning of the year — which is that you would sustain the banking system in order that it would resume lending — hasn't worked, and it isn't going to work," said James K. Galbraith, an economist at the University of Texas at Austin.

Over the course of 2008, the nation's five largest banks reduced their consumer loans by 79 percent, real estate loans by 66 percent and commercial loans by 19 percent, according to FDIC data. A wide range of credit measures, including recent FDIC data, show that lending remains depressed.

Why? The foundation of U.S. credit expansion for the past 20 years is in ruin. Since the 1980s, banks haven't kept loans on their balance sheets; instead, they sold them into a secondary market, where they were pooled for sale to investors as securities. The process, called securitization, fueled a rapid expansion of credit to consumers and businesses. By passing their loans on to investors, banks were freed to lend more.

Today, securitization is all but dead. Investors have little appetite for risky securities. Few buyers want a security based on pools of mortgages, car loans, student loans and the like.

"The basis of revival of the system along the line of what previously existed doesn't exist. The foundation that was supposed to be there for the revival (of the economy) . . . got washed away," Galbraith said.

Unless and until securitization rebounds, it will be hard for banks to resume robust lending because they're stuck with loans on their books.

"We've just been scared," said Robert C. Pozen, the chairman of Boston-based MFS Investment Management. He thinks that the freeze in securitization reflects a lack of trust in Wall Street and its products and remains a huge obstacle to the resumption of lending that's vital to an economic recovery.

Enter the Federal Reserve. It now props up the secondary market for pooled loans that are vital to the functioning of the U.S. financial system. The Fed is lending money to investors who're willing to buy the safest pools of loans, called asset-backed securities.

Through Sept. 3, the Fed had funded purchases of $817.6 billion in mortgage-backed securities. These securities were pooled mostly by mortgage finance giants Fannie Mae, Freddie Mac and Ginnie Mae. In recent months, the Fed also has moved aggressively to lend for purchase of pools of other consumer-based loans.

Today, there's little private-sector demand for new loan-based securities; government is virtually the only game in town. That's why on Aug. 17, the Fed announced that it would extend its program to finance the purchase of pools of loans until mid-2010. That suggests there's still a long way to go before a functioning securitization market — the backbone of consumer lending — returns to a semblance of normalcy.

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Americans are getting poorer, and it's going to get worse

2010-06-01T20:11:00.001-07:00

The early impact of the worst recession since the 1930s pushed median incomes down, forced millions more people into poverty and left more Americans without health care in 2008, according to new annual survey data from the U.S. Census Bureau.

Poor people, working people, blacks, Hispanics and children bore a disproportionate share of the hardship. The new figures, however, likely understate the severity of the economic downturn because a large portion of nation's job losses and unemployment rate increases occurred after the Census survey data was collected in March as part of the annual Current Population Survey.

The poor performances of key economic and social indicators come as little surprise, since the recession officially began in December 2007 and continued to create economic carnage for 18 months before appearing to bottom out over the summer.

_ Along the way, the nation's real median income — the point at which half the nation earns less and half more — fell 3.6 percent from $52,163 in 2007 to $50,303 in 2008. That was the first such decline in three years and the worst in the first year of any recession since Census Bureau began collecting the data during World War II, said Lawrence F. Katz, an economics professor at Harvard University.

_ Men and women were both affected. Full-time working men saw their median incomes fall by 1 percent from $46,846 to $46,367, while female earnings declined by 1.9 percent, from $36,451 to $35,745.

_ The worst is yet to come. "This is just the beginning, or the tip of the iceberg because 2008 was not nearly as bad an economy as 2009," Katz said. The average unemployment rate in 2008 was 5.8 percent, up from 4.6 percent in 2007. That pales in comparison with the 9 percent average unemployment rate so far this year, and it's likely to increase. August unemployment was 9.7 percent, and it's expected to peak above 10 percent in the months to come.

_ Because real median household income is 4.2 percent lower than it was in 2000, Katz said, "We've basically seen a lost decade for the American family," with only the top earning families doing better now than they were in 2000.

The national poverty rate also hit its highest level since 1997, jumping to 13.2 percent in 2008 from 12.5 percent in 2007. The increase meant that 39.8 million people lived below the poverty line, the most since 1960. That's up from 37.3 million in 2007. For children, the poverty rate hit 19 percent, or 14.1 million youngsters in 2008. That means 35.3 percent of the nation's poor in 2008 were under age 18.

Heidi Shierholz, an economist with the liberal-leaning Economic Policy Institute, estimated that 25 percent of U.S. children would be in poverty next year and 26.6 percent in 2010. "This would represent an increase of 10.4 percentage points from 2000 to 2010 — truly a lost decade," Shierholz said.

Meanwhile, the number of people without health insurance increased from 45.7 million in 2007 to 46.3 million in 2008, even though the percentage of uninsured Americans didn't change, at 15.4 percent. About 46 percent of the nation's uninsured are non-Hispanic whites, but as a group, 11 percent of non-Hispanic whites lack coverage, compared with 19 percent of blacks and 31 percent of Hispanics. About 45 percent of noncitizens lack coverage.

Following President Barack Obama's Wednesday night speech to Congress in which he stressed the need for comprehensive health care legislation, many supporters used the new Census estimates to support Obama's call for change.

At the Yorkville Common Pantry, an emergency meal program in East Harlem, Joel Berg, the executive director of the New York City Coalition Against Hunger, said the troubling numbers underscore the need for health reform.

"Today's new numbers make it clearer than ever that lack of health insurance and inability to pay medical bills is one of the greatest contributing factors to poverty and hunger in America," Berg said. "People in poor health rarely earn significant wealth."

Henry E. Simmons, President of the National Coalition on Health Care, another group pushing for reform, said the Census data also shows that more than 600,000 adults who earn more than $75,000 a year also lost coverage in 2008.

"The problem of (the uninsured) is not confined to the less affluent. More middle-income Americans are losing their health insurance coverage," Simmons said.

As in previous economic downturns, public health coverage through government-run programs such as Medicaid, Medicare, and the State Children's Health Insurance Program helped cover many people otherwise would've gone without. Enrollment in Medicaid and SCHIP alone increased by 3 million in 2008.

This expanded coverage caused the number of uninsured children to fall from 8.1 million or 11 percent in 2007 to 7.3 million of 9.9 percent in 2008.

"This was the lowest number (and percentage) of children without health insurance since 1987," said David Johnson, who heads the Census Bureau's housing and household economics statistics division.

Many experts think the 2008 data substantially understates how many people lack health coverage today because the unemployment rate in 2008 ranged from 4.8 to 7.2 percent compared with 9.7 percent in August.

Ron Pollack, the executive director of the health care advocacy group, Families USA, said every percentage point increase in the unemployment rate adds about 1.1 million people to the uninsured rolls. He estimates that 50 million Americans now lack coverage.

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Bernanke: Recession is over, but tough times will linger

2010-06-01T20:04:00.000-07:00

The deep recession that's gripped the U.S. economy by the throat since December 2007 is "very likely over at this point," Federal Reserve Chairman Ben Bernanke said Tuesday.

However, Bernanke painted a picture of an underperforming economy well into next year as he fielded questions after a speech at the Brookings Institution, a center-left research center in the nation's capital.

"From a technical perspective the recession is very likely over," Bernanke said, cautioning that unemployment is likely to remain high. "It's still going to feel like a very weak economy for some time, as many people will still find that their job security and employment status is not what they wish it was. So that's a challenge for us and all policymakers going forward."

Most mainstream economists think that the National Bureau of Economic Research, the official scorekeeper of when recessions begin and end, eventually will declare that this downturn came to an end in the summer or early fall of 2009.

What follows may not feel much like recovery, Bernanke cautioned, because structural problems in the U.S. economy are likely to resurface. There'll be economic growth during the rest of this year, "but the general view of most forecasters is the pace of growth in 2010 will be moderate, less than you might expect, given the depth of the recession, because of ongoing head winds."

The "head winds" he referred to include an impaired credit system, households still trying to dig out from personal debt and ongoing adjustments in many sectors of the economy, such as construction and autos.

In addition, the government must unwind many of its massive stimulus efforts or risk igniting inflation. That's all likely to lead to a weaker recovery than after past recessions, and a lingering high unemployment rate.

The sluggish outlook was punctuated by August retail sales data released Tuesday by the Commerce Department. Sales rose by 2.7 percent over July, driven up by the government's "cash for clunkers" car sales program and higher gasoline prices.

Drop those two factors, and retail sales rose by only 0.6 percent. That's another sign of consumer reluctance to spend amid widespread job insecurity.

"The various fiscal stimulus measures, including the cash for clunkers program, are playing a pivotal role in jump-starting the economy in the third quarter of 2009, and that should create enough initial momentum to keep the recovery in motion, but we should not be looking for consumer spending to be a major driver of the recovery beyond the current quarter," Brian Bethune, a U.S. economist for forecaster IHS Global Insight, warned in a research note Tuesday.

Looking over a longer horizon, Bernanke said that a major factor in the recent global expansion of credit was significantly impaired and unlikely to revive anytime soon. The implication: less lending and at higher costs.

The Fed chief was referring to securitization, the process by which loans are sold to Wall Street firms that bundle them together into securities that are sold to investors. Their returns on investment come from monthly payments that consumers make on their homes, cars, credit cards and student loans.

Securitization is in a deep freeze right now because investors no longer want pooled loans, fearing defaults by consumers and businesses. This is one reason it's so difficult now for consumers to get credit to buy cars or houses. Bernanke warned that even when this process resumes, it's unlikely to be as vigorous as it was during the go-go days earlier this decade.

"My forecast would be that the shadow banking system — securitization markets — will come back, will be a substantial part of the U.S. credit system. But they will certainly, at least in the medium term, be simpler, smaller, less opaque, subject to more oversight by regulators," Bernanke said. "And those things, I think, will constrain its growth for a period of time."

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Family health costs outpace inflation and wage growth

2010-06-01T20:00:00.000-07:00

The average cost of job-based family health insurance climbed 5 percent to $13,375 in 2009, making this the 10th straight year that health care premiums have increased faster than workers' wages and overall inflation have.

Insurance costs have increased 131 percent since 1999, when a year of family coverage cost about $5,791, according to the 2009 Employer Health Benefits Survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

That supercharged growth rate far outpaces the 38 percent increase in wages and 28 percent growth of inflation over the same period.

The inability of consumers and employers to finance that growth in cost is helping to drive the heated debate over how to revamp the nation's heath care system.

At a time when employers are laying off workers, facing revenue declines and looking for ways to cut costs, health insurance is proving a substantial financial burden.

So they're passing the costs to employees, who're paying higher deductibles and out-of-pocket expenses while often receiving less comprehensive coverage for their money.

Twenty-one percent of firms with insurance coverage reduced benefits or increased employee cost-sharing due to the recession, the survey found. Fifteen percent increased their workers' shares of the monthly premium.

"When health care costs continue to rise so much faster than overall inflation in a bad recession, workers and employers really feel the pain," said Drew Altman, the president and chief executive of the Kaiser Family Foundation.

Employers typically pay about $9,860 of the standard $13,375 family policy, the survey found. Workers pick up the rest, about $3,515 or 27 percent. That's the same share as last year.

The cost of single coverage increased slightly this year, averaging about $4,824 compared to $4,704 last year. Employees pay about 17 percent of the cost, or $779 toward the coverage.

The rising costs mean that a year of family coverage, on average, now costs employers about $15,000, nearly as much as a year of labor from a full-time minimum wage worker, Altman said.

Consumers also pay more, on average, for family coverage than they'd pay to purchase a gas-sipping Chevrolet Aveo — about $12,000 — or to rent a two-bedroom apartment for the nationwide yearly average of $11,136.

"It just underscores why health insurance is increasingly unaffordable for working people and for employers, especially small employers," Altman said.

About 159 million people have employer-based coverage nationally, but the percentage of companies that provide it is declining, particularly among smaller ones. Only 59 percent of firms with fewer than 200 employees offer coverage in 2009, compared with 62 percent last year. The rate fell from 78 percent to 72 percent among companies with 10 to 24 employees.

Perry Goodwin, who runs the Gaines W. Harrison & Sons hydraulic repair shop in Columbia, S.C., saw his insurance costs increase 28 percent to 33 percent a year for five straight years. But when it cost him $16,000 a month to insure his 20 employees, Goodwin decided it was time for a change.

So he switched insurance carriers several years ago, and his premiums fell to about $10,000 a month. "But then they shot up another $3,000 (a month) over the period of one year," Goodwin said. "So then I went to another carrier, who got me down to about $11,000 a month."

Goodwin now pays about $10,000 a month, and to keep his costs down he increased his employees' deductible this year to $500 from $250 and cut his coverage for employee dependents in half.

"I could get it cheaper if I wanted it, but you get what you pay for," Goodwin said.

As the debate about health care goes on, Goodwin said he opposes what the Obama administration and Congress have proposed, particularly a government-run public option, which he fears businesses could be asked to subsidize.

"It ain't the government's business," Goodwin said. "They don't need to be running a car company, and they sure don't need to be running health care."

If there's a way to keep costs down without the government getting involved, however, Goodwin said he's all for it.

Dallas Salisbury, the president and chief executive of the Employee Benefits Research Institute, said Goodwin's comments are typical of surveys of business owners, who're mostly Republican or Libertarian and are likely to oppose most forms of government intervention.

Without state or local level regulation, however, Salisbury said insurance companies would withhold coverage from people with pre-existing conditions and try to "cherry pick," or insure only healthy people.

Resolving the cost, coverage and quality issues surrounding the health care debate will always be difficult as long as consumers want access to everything, "but they assume that everybody else is getting a lot of services that they really don't need. That has been, for at least 60 years, the dilemma of modern health care," Salisbury said.

Other key findings from the survey:

_ Twenty-two percent of workers now pay at least $1,000 out of their own pocket for single coverage before their insurance kicks in. That's up from 18 percent last year, according to the survey of more than 2,000 public and private employers.

_ The average annual deductible for single coverage in an HMO increased to $699 this year from $503 in 2008. For family coverage in an HMO, the average deductible jumped to $1,524 from $1,053.

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Will Obama, Fed tolerate another jobless recovery?

2010-06-01T19:59:00.000-07:00

Politicians, pundits and even the Federal Reserve chairman have declared the recession over, but what's coming next is likely to prove as vexing as the deep economic crisis that Americans hope to leave behind.

As the economy begins to grow again, the nation faces a huge challenge: Consumers drive roughly 70 percent of U.S. economic activity, but job growth is expected to be quite slow even as the recovery gains steam. Without a rebounding job market, consumer spending is unlikely to return to robust levels, slowing a return to full employment.

Think of it as America's chicken-and-egg dilemma: The economy needs a big jump in consumer spending to spur exceptional growth, but that won't happen as long as unemployment remains high.

Fed Chairman Ben Bernanke acknowledged this dilemma Tuesday when he predicted that growth next year would be moderate at best. The economy faces strong "head winds," he warned, raising prospects for a jobless recovery like the ones that followed the brief recessions in 1990-91 and 2001.

"Unless the economy grows significantly faster than its longer-term growth rate," which economists peg at about 3 percent annually, "it will be relatively slow in creating jobs over and above people coming into the labor force," Bernanke said. "And therefore the unemployment rate would tend to come down quite slowly. That's a risk, a possibility."

That's a problem for President Barack Obama, who's promised jobs, and for Bernanke, whose mission includes steering the economy to full employment. The unemployment rate, now 9.7 percent, is expected to rise above 10 percent soon.

They must find a way to encourage job creation to replace the more than 7 million positions already lost, plus about 1 million new entrants into the work force annually. To get back to an unemployment rate below 5 percent will require about 12 million to14 million new jobs.

"The problem here is that once the economy makes the turn, and once we're not only out of recession but out of this period that feels like recession ... even then the economy is not going to be growing fast enough consistently to bring down the unemployment rate," said Ken Goldstein, an economist with the Conference Board, a business research center in New York.

Absent significantly above-trend growth, Goldstein said, the unemployment rate is likely to remain stubbornly high, at around 8 percent by the end of 2011.

"It might be 2012 or 2013 before we're back below 6 (percent). We're certainly not going to go back to 4. We may not see 5 again. But to be in the 5.5 range, we could be there by mid-decade," he said.

That's 2015. If Goldstein is right, many Americans will continue struggling to find jobs or will be underemployed, and the economy is in for a long slog.

With credit markets still impaired and Americans likely to be offered less and more-costly credit for years, a period of higher-than-average growth appears unlikely. The U.S. economy probably isn't facing a return to the dismal 1970s, but it won't be like the roaring '80s and '90s either.

"It's going to feel uncomfortable compared to what we've enjoyed over the past couple of decades," said Mark Zandi, the chief economist for forecaster Moody's Economy.com.

Not all analysts are glum. James Glassman, senior economist and managing director at JP Morgan Chase, the nation's strongest large bank, thinks that the Federal Reserve and the Obama administration will do what it takes to improve the jobs outlook.

"We're going to have to grow faster than trend to get unemployment to come down, which means that it is going to happen — unless you believe zero (percent) interest rates don't matter," Glassman said in an interview at bank headquarters.

His logic goes like this: Because the Fed has held its benchmark interest rate near zero since last December and is expected to leave it there for quite a while longer, lending rates across the economy will remain unusually low as the Fed tries to engineer full employment, which economists consider to be when the jobless rate is around 5 percent.

"The economy is not going to have the same robustness that it normally has. Returning to 5 percent (unemployment) is a national goal. That means they are not going to take their foot off of the gas until they can see that coming into view," Glassman said.

"It doesn't take a brain surgeon to figure out that you should gun it to get the economy to full employment. And it's not a Republican idea or Democrat idea, because we've seen both the Bush and Obama administrations do it," he said.

However, banks aren't lending much right now despite the low rates as they recover from the recession and the toll it's taken on their balance sheets. Over time, however, economists think, bank lending will grow and low borrowing costs will stimulate economic activity by consumers and businesses, and one result will be job growth.

If unemployment remains intolerably high, the government could take further steps.

"I think policy measures can be used to generate a more robust recovery," said Lawrence Mishel, the president of the Economic Policy Institute, a liberal policy-research group. He favors extending unemployment benefits and more aid to states, effectively pumping up the existing $787 billion federal stimulus effort, since at least 15 states now have unemployment rates above 10 percent.

In a sign of the times, Mishel also sees a need for targeted public-works programs like those of the 1930s and temporary tax breaks for businesses that hire new workers, an idea that conservatives have championed.

"There are going to be distressed communities that are going to need jobs for years to come," Mishel said. "I think that these are really extraordinary times, and I think we need to do what we can to create jobs."

Obama doesn't think so at this point, however. In an interview this week with The New York Times, the president said he was leaning against seeking a second economic stimulus package. "I have a strong inclination not to do it," Obama said, citing expectations that the economy is poised to resume growth. "As you know, jobs tend to be a lagging indicator. They come last," he said.

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Why haven't any Wall Street tycoons been sent to the slammer?

2010-06-01T19:54:00.001-07:00

More than a year into the gravest financial crisis since the Great Depression, millions of Americans have seen their home values and retirement savings plunge and their jobs evaporate.

What they haven't seen are any Wall Street tycoons forced to swap their multi-million dollar jobs and custom-made suits for dishwashing and prison stripes.

There are plenty of civil and class-action lawsuits from aggrieved investors angered by the losses in their mortgage bonds, hedge funds or pensions. Regulators have stepped up their vigilance after the fact. But to date, no captain of finance tied to the crisis has walked the plank.

There have been some high-profile arrests and federal convictions of financial giants — such as Ponzi scheme king Bernard Madoff and Stanford Financial Group chairman Robert Allen Stanford. They weren't among the causes of the financial meltdown, however, just poster boys for an era of lax enforcement, weak regulation and devout faith in free markets.

"A lot of people who are responsible (for the crisis) seem to have gotten awfully rich in the process," said Barbara Roper, the director of investor protection for the Consumer Federation of America.

The absence of what many would call justice stands out all the more because past financial crises always had their villains. The depression-era had electricity and railroad magnate Samuel Insull, who partly inspired the movie "Citizen Kane." The savings and loan crisis of the 1980's had banker Charles Keating. Energy giant Enron Corp.'s spectacular collapse offered the late CEO Kenneth Lay, a Texas crony of President George W. Bush.

Yet there's no such poster child for the Great Recession, as today's crisis is now called.

One may yet emerge. The FBI has more than 580 large-scale corporate fraud investigations under way. At least 40 of them are scrutinizing players in sub-prime mortgage lending, which was the first domino to fall and triggered a global financial crisis.

"The investigations are very complex; it's not something that's going to turn overnight," said Bill Carter, a spokesman at FBI headquarters. "They are labor intensive. They involve a review of records."

To date, the closest thing to a prosecution of a major actor in the financial meltdown is a civil fraud case that the Securities and Exchange Commission brought on June 4 against Angelo Mozilo, the perma-tanned CEO of mortgage-lending giant Countrywide.

The SEC, in documents filed in a federal courtroom in central California, accuses Mozilo of "deliberately misleading investors" by misrepresenting the risk that Countrywide posed. The SEC also accused him of insider trading because he sold large shares of company stock and options ahead of what he allegedly knew was a coming collapse of mortgage lending.

Unless the Justice Department brings corresponding criminal charges, however, Mozilo could be hit with penalties and a ruined reputation if convicted — but he wouldn't see the inside of a jail cell.

Another big trial is imminent, however. On Oct. 13, a Brooklyn jury will begin hearing the federal prosecution of former Bear Stearns investment fund founder Ralph Cioffi and his fund manager Matthew Tannin.

Two of their hedge funds, offered to mega-wealthy investors and heavily weighted with investments in mortgage bonds backed by sub-prime loans to the weakest borrowers, collapsed in June and August of 2007. Their collapse signaled a gathering storm in mortgage finance that culminated in March 2008 with the government-brokered fire sale of their bank to JP Morgan Chase.

Both men were charged on June 19, 2008, with defrauding investors, passing off as safe the investment in mortgage bonds even though they described the market for sub-prime mortgages as "toast" in their own e-mails. Cioffi also faces charges of insider trading.

Lawyers for both men declined comment to McClatchy, but when their clients were arrested they called the pair scapegoats for the broader financial crisis.

Court documents filed in August show attorneys for the two are trying to suppress evidence that the executives' special trading notebooks have disappeared. The government suspects that Cioffi and Tannin, or someone helping them, made them disappear to cover their tracks.

Cioffi's attorneys also asked in August that the presiding judge quash the use of evidence that points to their clients' lavish lifestyle, including mansions and Ferraris. The documents accused federal prosecutors of "improper appeal to class prejudice." Tannin's attorneys joined the motion on Sept.15.

Class prejudice against bankers is what many Americans feel, evident in the death threats made against some former or current executives at insurer American International Group and other financial firms earlier this year. Wall Street switchboard operators at some institutions no longer provide addresses to phone callers.

Americans are angry because the suffering on Main Street is a spillover from the excessive risk taking and lavish compensation of executives who invested on behalf of the ultra-wealthy. Investors seeking outsized "alpha" returns turned to Wall Street, both seeking to make a short-term killing even if doing so eventually brought the near collapse of the financial system.

President Barack Obama alluded to this on Sept. 14 in a New York speech to commemorate the anniversary of the collapse of investment bank Lehman Brothers, which sent off a global financial panic.

"We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses," Obama said, promising new rules. "Those on Wall Street cannot resume taking risks without regard for consequences."

There are persistent but unconfirmed reports that the FBI and grand juries are looking at the e-mails of executives of failed institutions such as Bear Stearns, which pioneered the process of pooling sub-prime loans for sale to investors, and Lehman Brothers, which was a leader in these toxic products when it collapsed.

Records from AIG, which the Federal Reserve saved from collapse on Sept. 17, 2008, are also thought to be under review. The FBI reportedly is also looking at rating agencies Fitch, Moody's and Standard & Poor's to determine if they knowingly gave pools of sub-prime mortgages AAA investment-grade ratings, the best possible, despite evidence to the contrary.

Carter, the FBI spokesman, declined comment on ongoing investigations.

The lack of any prosecution to date doesn't mean authorities aren't investigating, added Ian McCaleb, a spokesman for the Department of Justice.

"There are ongoing cases. But from a prosecution standpoint, it takes a significant amount of time to develop these things. Most financial fraud cases are very complex and it could take a while to unravel the specifics of each case," he said. "I would characterize financial fraud as one of our top priorities."

Another possibility is that a new politically appointed Financial Crisis Inquiry Commission could turn up something that leads to prosecution. The 10-member panel, created by Congress this month, began probing the origins of the crisis, has subpoena power and could compel testimony. This could, however, lead to conflicts with ongoing legal investigations.

Another reason that there've been no arrests of the perpetrators of the financial meltdown is that agencies such as the SEC, which regulates trading in stocks and bonds, and the Commodity Futures Trading Commission, which oversees the trading of contracts for future delivery of energy and farm products, lack powers of criminal prosecution.

They can bring civil charges that result in fines or pass information to federal prosecutors or the FBI, which under the Bush administration was reorganized to focus less on white-collar crime and more on national security matters and crimes against children.

Legislation introduced in the House and Senate would make it easier for the CFTC to prosecute, especially allegations of market manipulation. Measures would lower the current high threshold for determining manipulation. In 35 years, the agency has won only a single manipulation case, and it's under appeal. The bills also would give commodities regulators powers to bring criminal cases.

"Folks who do the crime shouldn't just pay a fine, but do the time," said Bart Chilton, a CFTC commissioner who's championed the need for prosecutorial powers.

Because it saves time and money, regulators traditionally have negotiated settlements with bad actors, and fines often amount to a business cost.

That, too, may be changing, however. The SEC on Sept. 14 was hit with a stinging judicial rebuke for its half-hearted efforts to punish Bank of America for alleged disclosure failures in the government-brokered purchase of investment bank Merrill Lynch.

U.S. District Judge Jed Rakoff tossed out a $33 million settlement between the SEC and Bank of America, effectively calling it a fig leaf. The agency, he said, looked as if it was enforcing the law while the bank and its CEO, Kenneth Lewis, got away with a slap on the wrist.

"It is not fair, first and foremost, because it does not comport with the most elementary notions of justice and morality, in that it proposes that the shareholders who were the victims of the bank's alleged misconduct now pay the penalty for that misconduct," Rakoff wrote in a scathing 12-page opinion that ordered the complaint to proceed to trial.

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How Moody's sold its ratings - and sold out investors

2010-06-01T19:50:00.000-07:00

As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression.

A McClatchy investigation has found that Moody's punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.

Instead, Moody's promoted executives who headed its "structured finance" division, which assisted Wall Street in packaging loans into securities for sale to investors. It also stacked its compliance department with the people who awarded the highest ratings to pools of mortgages that soon were downgraded to junk. Such products have another name now: "toxic assets."

As Congress tackles the broadest proposed overhaul of financial regulation since the 1930s, however, lawmakers still aren't fully aware of what went wrong at the bond rating agencies, and so they may fail to address misaligned incentives such as granting stock options to mid-level employees, which can be an incentive to issue positive ratings rather than honest ones.

The Securities and Exchange Commission issued a blistering report on how profit motives had undermined the integrity of ratings at Moody's and its main competitors, Fitch Ratings and Standard & Poor's, in July 2008, but the full extent of Moody's internal strife never has been publicly revealed.

Moody's, which rates McClatchy's debt and assigns it quite low value, disputes every allegation against it. "Moody's has rigorous standards in place to protect the integrity of ratings from commercial considerations," said Michael Adler, Moody's vice president for corporate communications, in an e-mail response to McClatchy.

Insiders, however, say that wasn't true before the financial meltdown.

"The story at Moody's doesn't start in 2007; it starts in 2000," said Mark Froeba, a Harvard-educated lawyer and senior vice president who joined Moody's structured finance group in 1997.

"This was a systematic and aggressive strategy to replace a culture that was very conservative, an accuracy-and-quality oriented (culture), a getting-the-rating-right kind of culture, with a culture that was supposed to be 'business-friendly,' but was consistently less likely to assign a rating that was tougher than our competitors," Froeba said.

After Froeba and others raised concerns that the methodology Moody's was using to rate investment offerings allowed the firm's profit interests to trump honest ratings, he and nine other outspoken critics in his group were "downsized" in December 2007.

"As a matter of policy, Moody's does not comment on personnel matters, but no employee has ever been let go for trying to strengthen our compliance function," Adler said.

Moody's was spun off from Dun & Bradstreet in 2000, and the first company shares began trading on Oct. 31 that year at $12.57. Executives set out to erase a conservative corporate culture.

To promote competition, in the 1970s ratings agencies were allowed to switch from having investors pay for ratings to having the issuers of debt pay for them. That led the ratings agencies to compete for business by currying favor with investment banks that would pay handsomely for the ratings they wanted.

Wall Street paid as much as $1 million for some ratings, and ratings agency profits soared. This new revenue stream swamped earnings from ordinary ratings.

"In 2001, Moody's had revenues of $800.7 million; in 2005, they were up to $1.73 billion; and in 2006, $2.037 billion. The exploding profits were fees from packaging . . . and for granting the top-class AAA ratings, which were supposed to mean they were as safe as U.S. government securities," said Lawrence McDonald in his recent book, "A Colossal Failure of Common Sense."

He's a former vice president at now defunct Lehman Brothers, one of the highflying investment banks that helped create the global crisis.

From late 2006 through early last year, however, the housing market unraveled, poisoning first mortgage finance, then global finance. More than 60 percent of the bonds backed by mortgages have had their ratings downgraded.

"How on earth could a bond issue be AAA one day and junk the next unless something spectacularly stupid has taken place? But maybe it was something spectacularly dishonest, like taking that colossal amount of fees in return for doing what Lehman and the rest wanted," McDonald wrote.

Ratings agencies thrived on the profits that came from giving the investment banks what they wanted, and investors worldwide gorged themselves on bonds backed by U.S. car loans, credit card debt, student loans and, especially, mortgages.

Before granting AAA ratings to bonds that pension funds, university endowments and other institutional investors trusted, the ratings agencies didn't bother to scrutinize the loans that were being pooled into the bonds. Instead, they relied on malleable mathematical models that proved worthless.

"Everyone else goes out and does factual verification or due diligence. The credit rating agencies state that they are just assuming the facts that they are given," said John Coffee, a finance expert at Columbia University. "This system will not get fixed until someone credible does the necessary due diligence."

Nobody cared about due diligence so long as the money kept pouring in during the housing boom. Moody's stock peaked in February 2007 at more than $72 a share.

Billionaire investor Warren Buffett's firm Berkshire Hathaway owned 15 percent of Moody's stock by the end of 2001, company reports show. That stake, largely still intact, meant that the Oracle from Omaha reaped huge financial rewards while Moody's overlooked the glaring problems in pools of subprime mortgages.

A Berkshire spokeswoman had no comment.

One Moody's executive who soared through the ranks during the boom years was Brian Clarkson, the guru of structured finance. He was promoted to company president just as the bottom fell out of the housing market.

Several former Moody's executives said he made subordinates fear they'd be fired if they didn't issue ratings that matched competitors' and helped preserve Moody's market share.

Froeba said his Moody's team manager would tell his team that he, the manager, would be fired if Moody's lost a single deal. "If your manager is saying that at meetings, what is he trying to tell you?" Froeba asked.

In the 1990s, Sylvain Raynes helped pioneer the rating of so-called exotic assets. He worked for Clarkson.

"In my days, I was pressured to do nothing, to not do my job," said Raynes, who left Moody's in 1997. "I saw in two instances -- two deals and a rental car deal -- manipulation of the rating process to the detriment of investors."

When Moody's went public in 2000, mid-level executives were given stock options. That gave them an incentive to consider not just the accuracy of their ratings, but the effect they'd have on Moody's -- and their own -- bottom lines.

"It didn't force you into a corrupt decision, but none of us thought we were going to make money working there, and suddenly you look at a statement online and it's (worth) hundreds and hundreds of thousands (of dollars). And it's beyond your wildest dreams working there that you could make that kind of money," said one former mid-level manager, who requested anonymity to protect his current Wall Street job.

Moody's spokesman Adler insisted that compensation of Moody's analysts and senior managers "is not linked to the financial performance of their business unit."

Clarkson couldn't be reached to comment.

Clarkson's own net worth was tied up in Moody's market share. By the time he was pushed out in May 2008, his compensation approached $3 million a year.

Clarkson rose to the top in August 2007, just as the subprime crisis was claiming its first victims. Soon afterward, a number of analysts and compliance officials who'd raised concerns about the soundness of the ratings process were purged and replaced with people from structured finance.

"The CEO is from a structured finance background, most of the people in the leadership were from a structured finance background, and it was putting their people in the right places," said Eric Kolchinsky, a managing director in Moody's structured finance division from January 2007 to November 2007, when he was purged, he said, for questioning some of the ratings. "If they were serious about compliance, they wouldn't have done that, because it isn't about having friends in the right places, but doing the right job."

Another mid-level Moody's executive, speaking on the condition of anonymity for fear of retribution, recalls being horrified by the purge.

"It is just something unthinkable, putting business people in the compliance department. It's not acceptable. I was very upset, frustrated," the executive said. "I think they corrupted the compliance department."

One of the new top executives was Michael Kanef, who was experienced in assembling pools of residential mortgage-backed securities, but not in compliance, the division that was supposed to protect investors.

"What signal does it send when you put someone who ran the group that assigned some of the worst ratings in Moody's history in charge of preventing it from happening again," Froeba said of Kanef. Clarkson and Kanef, who remains at Moody's, were named in a class-action lawsuit alleging that Moody's misled investors about its independence from companies that paid it for ratings.

Kanef went after Scott McCleskey, the vice president of compliance at Moody's from the spring of 2006 until September 2008, and the man that Moody's said was the one to see for all compliance matters.

"It's speculation, but I think Scott was trying to get people to follow some rules and people weren't ready to accept that there should be rules," Kolchinsky said.

McCleskey testified before the House of Representatives Oversight and Government Reform Committee on Sept. 30 and described how he was pushed out on the heels of the people he'd hired.

"One hour after my departure, it was announced that I would be replaced by an individual from the structured finance department who had no compliance experience and who, to my recollection, had been responsible previously for rating mortgage-backed securities," McCleskey testified.

His replacement, David Teicher, had no compliance background. SEC documents describe him as a former team director for mortgage-backed securities from 2006 to 2008.

McCleskey had raised concerns about the integrity of the ratings process, and Moody's had excluded him from meetings in January 2008 with the Securities and Exchange Commission about the eroding quality of pools of subprime loans that Moody's had blessed with top ratings.

SEC officials, however, didn't bother to seek out McCleskey, even though he was the "designated compliance officer" in company filings with the agency. The SEC maintains that its officials met with Kanef because he was McCleskey's superior.

SEC spokesman Erik Hotmire said that officials met with Kanef because "we ask to interview whomever we determine is appropriate."

Another former Moody's executive, requesting anonymity for fear of legal action by the company, said the agency might've understood what was going wrong better if it had talked to the hands-on compliance officials.

"If they had known he'd (Kanef) come from structured finance, the conflict of having him in that position should have been evident from the start," the former executive said.

Others who worked at Moody's at the time described a culture of willful ignorance in which executives knew how far lending standards had fallen and that they were giving top ratings to risky products.

"I could see it coming at the tail end of 2006, but it was too late. You knew it was just insane," said one former Moody's manager. "They certainly weren't going to do anything to mess with the revenue machine."

Moody's wasn't alone in ignoring the mounting problems. It wasn't even first among competitors. The financial industry newsletter Asset-Backed Alert found that Standard & Poor's participated in 1,962 deals in 2006 involving pools of loans, while Moody's did 1,697. In 2005, Standard & Poor's did 1,754 deals to Moody's 1,120. Fitch was well behind both.

"S&P is deeply disappointed in the performance of its ratings on certain securities tied to the U.S. residential real estate market. As far back as April of 2005, S&P warned investors about increased risks in the residential mortgage market," said Edward Sweeney, a company spokesman. S&P revised criteria and demanded greater buffers against default risks before rating pools of mortgages, he said.

Still, S&P continued to give top ratings to products that analysts from all three ratings agencies knew were of increasingly poor quality. To guard against defaults, they threw more bad loans into the loan pools, telling investors they were reducing risk.

The ratings agencies were under no legal obligation since technically their job is only to give an opinion, protected as free speech, in the form of ratings.

"As an analyst, I wouldn't have known there was a compliance function. There was an attitude of carelessness, or careless ignorance of the law. I think it is a result of the mentality that what we do is just an opinion, and so the law doesn't apply to us," Kolchinsky said.

Experts such as Columbia University's Coffee think that Congress must impose some legal liability on credit rating agencies. Otherwise, they'll remain "just one more conflicted gatekeeper," and the process of pooling loans — essential to the flow of credit — will remain paralyzed and economic recovery restrained.

"If (credit) remains paralyzed, small banks cannot finance the housing demand. They have to take them (investment banks) these mortgages and move them to a global audience," said Coffee. "That can't happen unless the world trusts the gatekeeper."

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BD Board Declares Dividend (Part of Warren Buffett Portfolio)

2010-06-01T19:45:00.000-07:00

The Board of Directors of BD (Becton, Dickinson and Company) (NYSE:BDX) has declared a quarterly dividend of 37 cents per common share, payable on June 30, 2010 to holders of record on June 9, 2010. The indicated annual dividend rate is $1.48 per share.

About BD

BD is a leading global medical technology company that develops, manufactures and sells medical devices, instrument systems and reagents. The Company is dedicated to improving people’s health throughout the world. BD is focused on improving drug delivery, enhancing the quality and speed of diagnosing infectious diseases and cancers, and advancing research, discovery and production of new drugs and vaccines. BD’s capabilities are instrumental in combating many of the world’s most pressing diseases. Founded in 1897 and headquartered in Franklin Lakes, New Jersey, BD employs approximately 29,000 associates in more than 50 countries throughout the world. The Company serves healthcare institutions, life science researchers, clinical laboratories, the pharmaceutical industry and the general public. For more information, please visit www.bd.com.

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Chevron (NYSE:CVX) and Conoco Phillips (NYSE:COP) Sign Deal Binding Them For 12 yrs.

2010-06-01T19:41:00.000-07:00

There are two deals that have been agreed to by Chevron (NYSE:CVX) and Conoco Phillips (NYSE:COP) , according to Indonesia's energy watchdog BPMIGAS. Chevron is Indonesia's largest oil producer and the final deal entails Chevron purchasing their natural gas from Conoco Phillips.

One of the deals was an amendment to a previous deal, which was meet with resistance by politicians because it was said to be unfair due to the current hike in the prices of oil. The gas supply will come from Conoco Phillips fields in South Sumatra.

The terms are for a four year time period, where Conoco Phillips will be supplying 77.9 trillion British thermal units total. As well as an additional 12 year agreement for 1,177 trillion British thermal units.

This deal will replace a prior deal which entailed swapping crude oil for natural gas among the two companies. Chevron is currently producing 370,000 barrels of crude oil daily from Sumatra.
As production has decreased due to not being able to tap new fields quickly enough, Indonesia has become a net importer of crude oil in recent years.

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WABCO Supplies MAN Latin America for 4,000 School Buses in Brazil, Improves Vehicle Safety and Comfort; MAN's Largest Delivery Ever

2010-06-01T19:35:00.000-07:00

WABCO Holdings Inc. (NYSE: WBC) [www.wabco-auto.com], a global technology leader and tier-one supplier to the commercial vehicle industry, today announced that the company is supplying MAN Latin America in support of their contract with the federal government in Brazil to produce 4,000 school buses featuring improved vehicle safety and passenger comfort.

MAN Latin America, the market leader in Brazil, is part of the MAN Group, one of Europe's leading manufacturers of commercial vehicles and diesel engines.

As part of a national program to modernize the school bus fleet in Brazil, the federal government has ordered 4,000 of MAN Latin America's Volksbus buses, the vehicle maker's largest delivery ever. WABCO is supplying a range of products and innovative solutions that deliver advanced safety and enable cleaner, more efficient operation over the lifetime of the vehicles. Due for delivery by the end of 2011, these buses will further expand Brazil's public transportation system for schoolchildren in cities and rural areas.

""We are proud to contribute to MAN Latin America's increasingly successful Volksbus as this vehicle demonstrates high quality transportation and enhanced safety alike,"" said Nikhil Varty, WABCO Vice President, Compression and Braking. ""On this Volksbus made for transporting schoolchildren in Brazil, WABCO's content helps significantly to improve vehicle safety while increasing passenger comfort.""

About WABCO

WABCO Vehicle Control Systems (NYSE: WBC) is a leading supplier of safety and control systems for commercial vehicles. For over 140 years, WABCO has pioneered breakthrough electronic, mechanical and mechatronic technologies for braking, stability, and transmission automation systems supplied to the world's leading commercial truck, trailer, and bus manufacturers. With sales of $1.5 billion in 2009, WABCO is headquartered in Brussels, Belgium. For more information, visit www.wabco-auto.com

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Costco Wholesale Corporation Reports April Sales Results

2010-05-06T23:44:00.000-07:00

Costco Wholesale Corporation reported net sales of $5.83 billion for the month of April, the four weeks ended May 2, 2010, an increase of 13 percent from $5.18 billion in the same four-week period last year. This year's four-week period for April included 28 days of sales compared to 27 last year; Easter fell in the reporting month of April last year. This calendar shift positively impacted this year's April total and comparable sales by approximately two to three percent.

For the thirty-five weeks ended May 2, 2010, the Company reported net sales of $51.04 billion, an increase of 9 percent from $46.66 billion during the similar period last year. Inflation in gasoline prices and strengthening foreign currencies had a positive impact on comparable sales.

Additional discussion of these sales results is available in a pre-recorded telephone message. You can access the recording by dialing 1-800-642-1687 (conference ID 44186110). This message will be available today through 5:00 p.m. (PT) on Friday, May 7, 2010.

Costco currently operates 567 warehouses, including 414 in the United States and Puerto Rico, 77 in Canada, 21 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan, one in Australia and 32 in Mexico. The Company also operates Costco Online, an electronic commerce web site, at www.costco.com and at www.costco.ca in Canada. The Company plans to open up to six additional new warehouses prior to the end of its fiscal year on August 29, 2010.

Certain statements contained in this document and the pre-recorded telephone message-constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, conditions affecting the acquisition, development, ownership or use of real estate, actions of vendors, rising costs associated with employees (including health care costs), geopolitical conditions and other risks identified from time to time in the Company's public statements and reports filed with the Securities and Exchange Commission.

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Gannet Co Inc Announces Quarterly Dividend

2010-05-06T23:41:00.000-07:00

Gannet co., Inc. has declared a regular quarterly dividend of $0.04 per share. The dividend will be payable on July 1, 2010. It will be paid to shareholders of record as of June 4, 2010.

The company’s shareholders have re-elected Craig Dubow, Howard Elias, Arthur Harper, John Jeffry Louis, Marjorie Magner, Scott McCune, Duncan McFarland, Donna Shalala, Neal Shapiro and Karen Hastie Williams to its Board of Directors. The election was held during the company’s annual meeting at Gannett’s headquarters. The directors will serve one year terms that will end at the company’s next annual meeting in 2011.

Gannett Co., Inc. (Gannett) is an international media and marketing solutions company. The Company publishes 83 daily United States newspapers, including USA TODAY, the daily print newspaper, and more than 650 magazines and other non-dailies, including USA WEEKEND. The Company also operates 23 TV stations in 19 the United States markets and Captivate, which operates video screens in office elevators in urban markets. Gannett's subsidiary Newsquest is the United Kingdom’s regional newspaper company with 17 daily paid-for titles, more than 200 weekly newspapers, magazines and trade publications, and a network of Websites. The Company operates in three segments: publishing, digital and broadcasting. In July 2009, Newsquest sold one of its commercial printing businesses, Southernprint Limited. In February 2009, the Company purchased a minority interest in Homefinder, a national online marketplace connecting homebuyers, sellers and real estate professionals.

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GlaxoSmithKline receives UK approval for Combodart

2010-05-06T23:37:00.000-07:00

GlaxoSmithKline has been granted a licence approval for Combodart, a new treatment for moderate-to-severe benign prostatic hyperplasia (BPH).

The therapy, which is a combination of dutasteride and tamsulosin hydrochloride, has been approved on the basis of results from a four-year clinical study, which showed its efficacy in reducing the risk of urinary retention and BPH-related surgery.

It is the first treatment to be approved in the UK which combines the positive effects of two separate recommended monotherapies.

Dr Jon Rees, a GP from Bristol with a special interest in urology, said the effectiveness of the treatment makes it more likely that patients will stick to medication regimes and avoid disease progression.

He added: "By delivering all the advantages of two treatments in one single capsule, the arrival of Combodart represents a new approach to BPH management in the UK."

Last week, GlaxoSmithKline published its financial report for the first quarter of 2010, reporting a year-on-year turnover increase of 13 per cent.

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United Parcel Service Inc rolls out hybrid electric vehicles in Stafford Read more: UPS rolls out hybrid electric vehicles in Stafford

2010-05-06T23:29:00.000-07:00

The new vehicles are the latest in the expansion of the Atlanta-based company’s alternative fuels vehicle fleet expansion, and part of a rollout of 200 new HEVs deployed in seven other U.S. cities: Austin; Chicago, Long Island, Louisville, Minneapolis, Philadelphia and Washington, D.C.

The hybrid power system combines a conventional diesel engine with a battery pack, and use regenerative braking, where energy from the friction of applying the brakes is captured and returned to the battery as electricity.

The HEVs will cut down on fuel consumption by about 35 percent, the company said, equaling about 100 regular UPS delivery vehicles.

United Parcel Inc also uses compressed natural gas, liquefied natural gas, propane, electricity and hydraulic hybrid technology in its alternative fleet.

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Comcast rolls out mobile broadband to 5 cities

2010-05-06T23:23:00.000-07:00

Comcast Corp. on Wednesday said it has rolled out mobile broadband service in Portland, Ore., Philadelphia, Seattle, Houston and Boston.

Called High-Speed 2go, the service in the five cities will operate on Sprint Nextel Corp.'s nationwide 3G network.

Comcast is offering a "Fast Pack" $54.99-a-month promotion for one year that bundles mobile and wired Internet access. The price will go up to $69.99 a month after 12 months.

Existing wired Internet customers can add mobile 3G broadband for $40 or more per month for both services.

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Wabco posts 1Q profit of $30M, reversing loss

2010-05-06T23:20:00.000-07:00

Wabco Holdings Inc., which supplies components for commercial vehicle manufacturers, posted first-quarter net income Wednesday of $30.7 million, citing higher truck and bus production in emerging markets.

The company also lifted its full-year forecast.

The Brussels-based company said earnings for the three months ended March 31 came to 47 cents per share. That compares with a loss of $36.4 million, or 57 cents per share, in the same period last year.

Excluding items, the company earned 51 cents per share. Results on that basis breezed past Wall Street estimates. According to Thomson Reuters, analysts expected 25 cents per share, on average.

Revenue rose to $491.1 million from $333.9 million. Analysts expected $427.8 million.

"The commercial vehicle industry is recovering," said Wabco Chairman and CEO Jacques Esculier.

The company said Asia and South America showed "significant growth" during the quarter, adding that 75 percent of the world's truck and bus production took place in China, India and Brazil.

Wabco raised its full-year earnings forecast to $1.27 to $1.67 per share, excluding items, citing a recovery in European truck and bus demand. Analysts expect $1.32 per share.

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NRG Energy's Wind farm set to move forward

2010-05-06T23:15:00.000-07:00

Federal waters off Delaware are officially open to bidders seeking to lease parts of the Outer Continental Shelf. That means NRG Energy’s Bluewater Wind wind offshore farm is a big step closer to completion.

NRG Energy spokesman David Gaier said, “We feel that we are very far along in the game as far as the Mid-Atlantic Wind Park is concerned.” He said the company already has in hand a power-purchase agreement with Delmarva Power for 200 megawatts of energy, an agreement to deliver wind power to the regional electric grid and a lease to install a meteorological tower for studies.

Gaier said the company plans to have turbines generating power by 2014.

Gaier said NRG is reviewing the application from the Minerals Management Service (MMS), which is part of the interior department. “This action by the Department of the Interior formally opens the permitting process for us,” said Gaier. This is the first-ever offshore wind permit process, said Gaier, so the company can’t estimate how long it will take. But, he said, the company expects to meet its deadlines.

Gov. Jack Markell said, “Delawareans are eager to seize the economic and environmental benefits of offshore wind and we are proud to be the first state in which MMS will issue an Offshore Wind Request for Interest.”

Gaier said the company would also have to complete environmental-impact studies, including the effects of the planned park on migratory birds.

“We believe, based on other studies and from long-term experience in Europe, there will be no negative impact on birds. In fact, one of the first organizations to support us in Delaware was Delaware Audubon,” said Gaier.

NRG Energy purchased Bluewater Wind from Australian-based Babcock and Brown in November 2009 after Babcock and Brown had financial problems and went into voluntary administration, selling off its assets. In 2008, Bluewater Wind and Delmarva Power signed a power-purchase agreement after more than a year of contentious negotiation. MMS said if there is no competitive interest, the agency says it may proceed with a noncompetitive lease process. Both options will include public participation and environmental review, the agency said.

The Department of the Interior announced last week the first step in allowing a wind farm project off Rehoboth Beach. Interior secretary Ken Salazar said federal and Delaware officials have been working closely on the project. The Minerals Management Service governs continental shelf leases.

The Request for Interest includes federal waters between Delaware Bay shipping routes. The point closest to land is 7.5 miles due east of Rehoboth Beach.

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For Investors, Diabetes Is a Growth Industry: GlaxoSmithKline

2010-05-01T11:38:00.000-07:00

The numbers are sobering. Approximately 24 million Americans today have diabetes, and another 12 million are expected to be diagnosed by 2020, according to the American Diabetes Association. One survey puts the toll of lost productivity and caring for diabetes patients at $218 billion annually in the U.S. alone.Yet for investors, the fast-growing diabetes industry suggests something else: opportunity.

Each week seems to bring another development. Earlier this month, Swiss pharma giant Roche Holding AG announced its acquisition of a unit working on a new type of insulin patch. That development came on the heels of AstraZeneca's rollout of the new diabetes drug, Onglyza, in India — a country that is projected to have the most diabetes cases globally by the end of 2010, according to the International Diabetes Federation (IDF). In January, Novo-Nordisk got approval for its new once-a-week diabetes drug, Victoza, one of a new generation of similar medications.

Of course, not every new diabetes product is a success. The FDA may be considering halting trials of GlaxoSmithKline’s diabetes treatment Avandia due to possible side effects like increased risk of heart attack. (In a statement, GlaxoSmithKline says it “welcomes additional scientific information that could help guide decisions around clinical trials and ultimately patient safety.”) Inhaled insulin drugs have also been something of a bust, with Eli Lilly, Pfizer and Novo-Nordisk abandoning efforts to develop those products.

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Conoco Net Income More Than Doubles on Oil Prices

2010-05-01T11:36:00.000-07:00

ConocoPhillips, the third-largest U.S. oil company, said first-quarter profit more than doubled after higher crude prices increased the value of its production.

Net income climbed to $2.1 billion, or $1.40 a share, from $800 million, or 54 cents, a year earlier, Houston-based ConocoPhillips said today in a statement. Excluding costs related to pulling out of two Middle East projects, profit was $1.47 a share, 10 cents higher than the average of 15 analyst estimates compiled by Bloomberg. Revenue surged 46 percent.

ConocoPhillips said in October it planned to divest $10 billion of assets as it intensifies its focus on exploring for oil and natural gas. The company reached nearly half its goal when it agreed this month to sell a Canadian oil-sands stake for $4.65 billion.

Improving economic conditions have helped crude prices rise this year. Oil futures traded in New York were 82 percent higher, on average, in the first quarter than a year earlier.

“I think they’re executing about as well as can be expected given the environment they have,” said James Halloran, a consultant at Financial America Securities in Cleveland.

ConocoPhillips rose 55 cents to $59.10 at 4:15 p.m. in New York Stock Exchange composite trading. The stock has nine buy ratings from analysts, eight holds and three sells. Before today, ConocoPhillips had climbed 15 percent this year in New York trading.

Production Falls

ConocoPhillips said production of oil and gas in the first quarter fell about 5 percent from a year earlier to 1.83 million barrels of oil equivalent a day. The company cited normal field declines in the U.K. and North America, the effects of production-sharing agreements and unplanned downtime in North America related to weather.

The company said its earnings from producing oil and gas more than doubled in the first quarter to $1.83 billion. The company’s stake in Russia’s OAO Lukoil had a first-quarter profit of $387 million, compared with $8 million a year earlier.

ConocoPhillips said in March that it wants to sell half its 20 percent stake in Lukoil by the end of 2011. A 10 percent stake was valued at about $5 billion last month. The Lukoil sale is in addition to a plan to sell $10 billion in assets within the same period. This month, ConocoPhillips also said it’s pulling out of the Yanbu refinery venture with Saudi Aramco and the Shah gas project with Abu Dhabi. Costs related to those two projects totaled $110 million in the first quarter.

More Focused

“I think they’re finally realizing that they don’t have to be big to be appreciated by the market,” said Brian Youngberg, an analyst at Edward Jones in St. Louis who has a “buy” rating on ConocoPhillips shares and owns none. “If they focus on returns and operate their assets well, they will be rewarded in terms of improved share price.”

ConocoPhillips said it is increasing drilling in the Eagle Ford shale formation, with four horizontal wells completed and three more being drilled. The company also said three wells in North Dakota’s Bakken Shale began producing last month.

The company is seeking to reduce its refining and marketing business, whose profit margins have been squeezed by reduced demand for transportation fuels. ConocoPhillips has said it eventually wants that segment to comprise 15 percent of its portfolio, compared with 28 percent last year.

Clayton Reasor, vice president of corporate affairs at ConocoPhillips, said in March that the company may enter into some refinery joint ventures or sell interests. ConocoPhillips doesn’t expect to sell a refinery in the next couple of years, he said.

Refining Loss

ConocoPhillips reported a loss of $4 million from refining and marketing in the first quarter, compared with earnings of $205 million a year earlier. The company said its U.S. refining utilization rate was 88 percent in the first quarter, while the international rate was 48 percent in part because of maintenance work.

Profit from DCP Midstream, a pipeline and gas-processing venture with Spectra Energy Corp., fell 37 percent to $77 million. ConocoPhillips’s chemicals business, held in a joint venture with Chevron Corp., earned $110 million, compared with a profit of $23 million a year earlier.

Exxon Mobil Corp. and Chevron are the biggest U.S. oil companies. Exxon Mobil said today that first-quarter profit rose 38 percent. Chevron is scheduled to report earnings tomorrow.

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Berkshire rebounds from 2009 $1.5 billion 1Q loss to post a preliminary $3.6 billion profit

2010-05-01T11:34:00.000-07:00

Berkshire Hathaway has rebounded from last year’s first-quarter loss and earned $3.6 billion as the economic recovery began and Berkshire absorbed Burlington Northern Santa Fe railroad.

CEO Warren Buffett shared preliminary first-quarter results with shareholders Saturday at Berkshire’s annual meeting. The full report will be released Friday.

Last year’s $1.5 billion loss included a $241 million loss on the sale of investments and a $1.9 billion charge from writing down a ConocoPhillips investment.

The addition of Burlington Northern more than doubled Berkshire’s regulated businesses unit income to $555 million. The unit also includes utilities.

Buffett says Berkshire’s results show the economy is improving because manufacturing and retail income grew 85 percent to $477 million.

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Exxon Mobile Q1 profits up by 38%

2010-04-30T11:36:00.000-07:00

Exxon Mobil has said its first quarter profits rose 38% from the same period a year earlier to $6.3 billion.

The profits excluded a $200m charge to pay for changes in US healthcare legislation. Amid high oil prices of around $85 a barrel, Exxon had been expected by analysts to report slightly stronger.

In 2009 Exxon recorded the largest profit of any publicly-listed company in the world, a whopping $40.6 billion, boosted by record high oil prices.

The Texas-based company said oil production increased around 4.5% in the first quarter compared with the same period a year ago.

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Republic Services, Inc. Reports Record First Quarter Results

2010-04-30T11:32:00.000-07:00

Republic Services, Inc. today reported net income of $65.0 million, or $0.17 per diluted share, including a loss on the extinguishable of debt and other charges as further described in this release, for the three months ended March 31, 2010, versus $113.0 million, or $0.30 per diluted share, for the comparable period last year.

Republic's adjusted net income for the three months ended March 31, 2010 increased $16.9 million, or $0.03 per diluted share, to $157.6 million, or $0.41 per diluted share, from $140.7 million, or $0.38 per diluted share, for the three months ended March 31, 2009. Adjusted net income excludes a loss on the extinguishment of debt, costs to achieve synergies, restructuring charges and loss on disposition of assets and impairments, net for the three months ended March 31, 2010 and exclude costs to achieve synergies, restructuring charges and loss on disposition of assets and impairments, net for the three months ended March 31, 2009. A detail of these costs and charges is contained in the Reconciliation of Certain Non-GAAP Measures section of this document.

Earnings before interest, taxes, depreciation, depletion, amortization and accretion (EBITDA) for the three months ended March 31, 2010 was $604.5 million compared to $598.1 million for the comparable period in 2009. Excluding certain costs and charges recorded during 2010 and 2009 as previously described, adjusted EBITDA for the three months ended March 31, 2010 would have been $619.7 million or 31.7% as a percentage of revenue, compared to $647.1 million, or 31.4% as a percentage of revenue, for the comparable 2009 period.

Revenue for the three months ended March 31, 2010 was $1,957.7 million compared to $2,060.5 million for the same period in 2009. Core price for the three months ended March 31, 2010 increased 2.2%, commodity pricing increased 1.8% and fuel charges increased 0.3%. Core volume decreased by 7.0% during the period.

"During the quarter, Republic achieved the highest EBITDA margins in its history," said James E. O'Connor, Chairman and Chief Executive Officer of Republic Services. "Our performance is a direct result of the organization's continued focus on pricing, productivity improvements, customer service and synergy savings. Thus far, we have achieved approximately $180 million in annual run-rate synergy savings. I am especially pleased with the results of our recent $1.5 billion bond offering. Approximately $30 million of our annual run-rate synergies have been generated by refinancing debt at more favorable rates and we now expect total synergies to be in the range of $185 to $190 million."

Don Slager, President and Chief Operating Officer stated, "Our continued focus on safety resulted in a significant reduction in our risk cost during the quarter. Also, we have begun to see signs of increased economic activity, including indications of greater industrial activity, throughout the United States. Implementation of programs designed to lower costs, drive efficiency and increase productivity will allow us to generate higher returns as economic conditions improve."

Company Declares Quarterly Dividend

Republic also announced that its Board of Directors declared a regular quarterly dividend of $0.19 per share for shareholders of record on July 1, 2010. The dividend will be paid on July 15, 2010.

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Union Pacific promises to move train traffic faster

2010-04-30T11:28:00.000-07:00

If you're one of those Glen Ellyn residents having trouble sleeping because of freight trains rumbling along the Union Pacific tracks, there may be some relief in sight.

Union Pacific officials appeared before the Village Board on April 26 to outline plans for improvements they say will speed train traffic along.

"We're doing something significant to eliminate this process," Union Pacific Public Affairs Director Tom Zapler said of the habit of trains stopping and idling at all hours of the night.

Speaking in front of the board and about 30 residents who live close to the tracks, Zapler and General Superintendent David Giandinoto laid out plans to make improvements to their operations that will give residents some relief.

Union Pacific runs from 50 to 60 freight trains per day through Glen Ellyn. The noise problem comes primarily from trains idling during the times they are stopped by congestion from Metra commuter trains, Union Pacific officials said.

While the problem is worst during morning and evening commutes, residents have complained that weekends are a problem as well.

Using locomotives on both ends of the train, a measure that increases fuel efficiency but also produces more noise, compounds the problem.

Union Pacific is partnering with Metra in series of initiatives that are designed to reduce downtime to enhance public safety, reduce delays by 50 percent and grade crossing downtime by 11 percent.

Two high-speed crossovers, one in Wheaton and the other in Lombard, will be installed at the railroad's expense, which will get a grant from the Illinois State Commerce Commission to defray costs.

With no other crossovers between Elmhurst and West Chicago, trains have no ability to switch from one track to another to avoid bottlenecks.

Village President Mark Pfefferman asked why the problem persisted on weekends when there was little in the way of Metra commuting.

"We tend to run more trains," Giandinoto said.

Trustee Carl Henninger pointed out that westbound trains were a problem, particularly in the area near Park Boulevard.

Zapler seemed surprised by that assertion.

Residents peppered the Union Pacific representatives with questions.

"We have seen a significant increase in train traffic," Gina Meyers said, noting that the noise problem was aggravated by the rear engines. She also asked if Union Pacific had plans to install a fourth track in Glen Ellyn.

"We have no plan whatsoever," Zapler said.

Anne Akamatsu noted that the railroad's own policies called for shutting down locomotives after 15 minutes of idling and asked, "How do you enforce them (the policy)?"

Zapler promised to look into the problem.

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Riverview Bancorp Q4, fiscal 2010 losses grow

2010-04-30T11:25:00.000-07:00

Riverview Bancorp Inc. reported a fourth-quarter net loss of $4.7 million, or a loss of 44 cents per diluted share, which compares with a loss of $720,000, or a loss of 7 cents a share a year earlier.

In the latest quarter, the Vancouver, Wash.-based banking company (NASDAQ: RVSB) recorded a $5.9 million provision for loan losses.

For fiscal 2010, Riverview reported a loss of $5.4 million, or a loss of 51 cents per share, compared with a loss of $2.7 million, or a loss of 25 cents a share a year earlier. For fiscal 2010, the company recorded a $15.9 million provision for loan losses, compared with $16.2 million recorded in 2009.

No major analysts cover the company.

“While our increased provision for loan losses put a damper on profitability, we are encouraged with the progress we have made as we move through this economic phase. Nonperforming assets declined during the quarter and remain manageable while our capital and liquidity levels remain strong,” said Pat Sheaffer, chairman and CEO, in a statement.

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Bank of America Refinance Mortgage Rates – Home Loans Lower on April 30th for First Time Home Buyers

2010-04-30T11:16:00.000-07:00

Bank of America refinance mortgage rates remain at low levels as we are seeing home loans around 4.85% for the 30 year fixed mortgage. As April comes to a close and the first time home buyer tax credit is set to expire many first time buyers are flooding the market hoping to get a very low mortgage rate with a great home price.

Bank of America and almost all mortgage lenders continue to enjoy the low interest rate environment. Just this week the Federal Reserve Bank announced that they are going to take the necessary steps to keep interest rates low for an extender period of time. This means that banks and lenders will be able to add new customers.

Customers are benefiting from this low interest rate environment as they are able to borrow money at much lower rates. This means that mortgage and car payments are likely much less. With this being the case, well qualified borrowers can save a significant amount of money that they can use to buy some of the finer things in life that they desire.

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Comcast sees good quarterly results

2010-04-30T11:11:00.000-07:00

Comcast Corp. its quarterly profits go up. The good thing is that it was able to beat the analyst expectations.

Comcast is the largest cable company. It has been able to do this, since the company added newer customers through its high-speed Internet services.

The company saw its earnings rise by 31 cents as against the expectations of 30 cents.

The Philadelphia-based company was able to add 1.02 million new customers.

Comcos has also rebranded itself and takenover the name if "Xfinity". With this, it wants to highlight that it gives very high speed Internet service.

Then there are services lime "OnDemand Online" which helps the customer watch videos on the Web.

The news reports also suggest that Comcast is trying hard to win over the customers of Verizon. Its main focus is Philadelphia and Washington.

Comcast saw its net income increase by 12 per cent to touch $866 million or 31 cents for every share. Last year, the figure was $772 million or 27 cents.

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Norfolk Southern earnings rise, revenue up

2010-04-30T11:08:00.000-07:00

Norfolk Southern Corp. announced Tuesday that its first-quarter profit rose 45 percent from the same quarter a year ago, as the effects of the global recession eased.

Net income was $257 million, or 68 cents a share, for the quarter that ended March 31, up from $177 million, or 47 cents a share, in the first quarter of 2009. The earnings beat Wall Street projections by 2 cents a share. The average earnings-per-share estimate of analysts surveyed by Bloomberg News was 66 cents.

Norfolk Southern's operating revenues for the first quarter rose 15 percent to $2.2 billion, from $1.9 billion in the same quarter last year.

It was the first time in 15 months that the Norfolk-based railroad, the nation's fourth-largest, was able to announce a year-over-year increase in net income. That last occurred on Jan. 27, 2009, when it reported fourth-quarter 2008 profit jumped 13 percent.

For all four quarters of 2009, profit decreases ranged from 32 percent to 45 percent.

"Looking ahead, we are increasingly convinced that the domestic economic recovery is well under way, although the rate of growth is still somewhat unclear," Norfolk Southern CEO Wick Moorman told Wall Street analysts in a teleconference late Tuesday. "...We saw a big upsurge in business in March, and while some of that was clearly catch-up from a snowbound February, we are very encouraged that our April volumes have continued to be strong."

Quarterly revenues were up across all of the railroad's business segments:

--General merchandise rose to $1.2 billion, a 23 percent increase from $975 million in the same quarter a year ago.

--Coal climbed to $629 million from $602 million last year, a 4.5 percent increase.

--Intermodal, involving the shipment of truck trailers and shipping containers, was up 12 percent, rising to $410 million from $366 million in the same quarter last year.

Norfolk Southern released its earnings after the close of trading on the New York Stock Exchange. In trading Tuesday, its stock fell $1.44 a share, closing at $59.65.

On Thursday, Union Pacific, the nation's largest railroad, reported that its net income for the first quarter rose 43 percent, to $516 million from $362 million in the same quarter a year ago. Revenue grew 16 percent, to $3.96 billion.

On April 13, CSX Corp., the third-largest, reported that first-quarter net earnings jumped 24 percent compared with the same quarter a year ago, to $306 million from $246 million. Revenue grew 11 percent, to $2.49 billion.

Burlington Northern Santa Fe, the second-largest, was acquired by Warren Buffett's Berkshire Hathaway Inc. earlier this year and no longer releases its own earnings.

Berkshire Hathaway's first-quarter earnings are expected to be announced early next month.

Norfolk Southern operates roughly 21,000 route miles in 22 states and the District of Columbia and serves every major container port in the eastern United States, including Hampton Roads. Earlier Tuesday, the railroad announced the regular quarterly dividend of 34 cents per share on its common stock, payable on June 10, to stockholders of record on May 7.

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NRG Energy, Inc. to Present First Quarter 2010 Earnings on May 10

2010-04-30T11:04:00.000-07:00

NRG Energy, Inc. to present the Company's first quarter 2010 financial results to the financial community in a conference call to be held Monday, May 10, at 9:00am eastern.

Investors, the news media and others may access the live webcast of the conference call and presentation materials by logging on to NRG's website at http://www.nrgenergy.com and clicking on "Investors." The webcast will be archived on the site for those unable to listen in real time.

About NRG

NRG Energy, Inc., a Fortune 500 and S&P 500 Index company, owns and operates one of the country's largest and most diverse power generation portfolios. Headquartered in Princeton, NJ, the Company's power plants provide more than 24,000 megawatts of generation capacity--enough to supply more than 20 million homes. NRG's retail business, Reliant Energy, serves more than 1.6 million residential, business, commercial and industrial customers in Texas. A past recipient of the energy industry's highest honors--Platts Industry Leadership and Energy Company of the Year awards, NRG is a member of the U.S. Climate Action Partnership (USCAP), a group of business and environmental organizations calling for mandatory legislation to reduce greenhouse gas emissions. More information is available at www.nrgenergy.com.

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GlaxoSmithKline launches mini Nicorette lozenges

2010-04-30T11:00:00.000-07:00

GlaxoSmithKline said Tuesday it is selling a fast-dissolving lozenge version of its Nicorette anti-smoking lozenges.

The British drugmaker said the new mini lozenge dissolves up to three times faster than similar products. It is designed to help relieve nicotine cravings and withdrawal symptoms, and comes in a small pocket-size vial. The company is launching the lozenges with a campaign that includes a Facebook contest.

GlaxoSmithKline reported about $529 million in nicotine replacement therapy revenue in 2009, including sales of Nicorette gum, Nicoderm CQ patches and Commit lozenges.

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GlaxoSmithKline Q1 results 'strong'

2010-04-30T10:57:00.000-07:00

The pharmaceutical company, which rivals AstraZeneca, says it was encouraged by underlying revenue growth which was driven by emerging markets and consumer health growth.

The stock has marginally underperformed the rest of the FTSE 100 on concerns over US Healthcare reform, however rose swiftly by about 1.2 pct on the news.

It remains down since however since then.

The profits at the group beat market expectation at £7.36 bn whilst margins were affected as the Group prepares its business to absorb any future US Healthcare reform.

Overall, profits were £2.23 billion and 30.7p earnings per share - slightly under some expectations of £2.41 billion and 31.3p earnings per share which investment bank Nomura gave.

The earnings however did beat consensus.

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Becton, Dickinson posts $300 million in Q2 profits

2010-04-30T10:52:00.000-07:00

Net income grew 14 percent to nearly $300 million at Becton, Dickinson & Co. (NYSE:BDX) during the company's fiscal second quarter that ended March 31.

The $1.24-a-share profit topped consensus analyst opinion by a penny, although revenues fell just short of the $1.85 billion Wall Street estimate for the quarter. BD officials said they now anticipate revenues for the fiscal year ending in September to rise 6 percent to around $7.59 billion — or about $70 million below the company's previous forecast due to currency fluctuations.

The BD executives also estimated that changes in Medicare Part D reimbursements enacted under federal legislation could trim reported earnings over the second half of fiscal 2010 by roughly $9.5 million, or about 4 cents per share.

Overall, the Franklin Lakes, N.J.-based medical device manufacturer said it generated $297.7 million in net income on $1.88 billion in revenues during the January-to-March fiscal period. That compares with a $261.2 million profit during the year-ago quarter on sales of $1.73 billion.

The company enjoyed strong performance within its BD Medical segment by diabetes care and pharmaceutical system products. It also saw gains with diagnostic kits used to detect cancer and sexually transmitted diseases, as well as growth in selected markets with labware used in cell analysis and discovery.

On the downside, a relatively mild flu season this past winter — including limited outbreaks of the Swine Flu virus — undercut sales of test kits, the company said.

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ConocoPhillips reports 1st quarter profit

2010-04-30T10:47:00.000-07:00

Conoco-Phillips announced Thursday that “significantly improved” oil and natural gas prices helped more than double net profit from one year ago, despite stumbling production.

The Houston refiner reported a first quarter net income of $2.1 billion, or $1.40 per share, from $800 million, or 54 cents per share, in the same quarter of 2009, according to ConocoPhillips documents. Earnings available to the common shareholders were $2.2 billion, or $1.47 per share, following the company’s decision to end participation in the Shah Gas Field and Yanbu refinery projects in the Middle East.

Revenue reached $44.8 billion in the quarter, up from $30.7 billion in 2009’s first quarter, company documents state.

“Improving market conditions in the first quarter contributed to increased earnings,” ConocoPhillips Chairman and CEO Jim Mulva said in a conference call with investors and the media.

Production of oil and gas in the first quarter fell about 5 percent from one year ago, when the company produced about 1.93 million barrels of oil per day, according to company documents.

The decrease was due to normal field declines in the United Kingdom and North America, the effects of production-sharing agreements and unplanned down time in North America related to weather, company documents state. But increased production from China and Canadian oil sands helped offset the decrease.

ConocoPhillips annou-nced in October it hopes to sell $10 billion in assets to focus on oil and natural gas exploration efforts.

The company agreed this month to sell its stake in Syncrude, a Canadian oil sands project, for $4.65 billion. It also hopes to sell half of its 20 percent stake in Russian oil giant Lukoil, which produced earnings of $387 million in the first quarter for ConocoPhillips.

“The increase in dividends and the sale of the Syncrude interest are examples of steps we have taken to increase distributions and improve our balance sheet,” Mulva said. “As previously annou-nced, we decided to opt out of the Yanbu refinery project and have elected not to participate in the Shah gas field development in Abu Dhabi. Over the next couple of years we expect to see improved shareholder returns through disciplined capital investment, a strengthened financial position and growth in shareholder distributions.”

The company reported gains in all but two segments.

ConocoPhillips exploration and production arm recorded first-quarter earnings of $1.83 billion, an increase from the $700 million it posted in last year’s first quarter, according to company documents.

“The higher crude oil and natural gas liquids prices resulted in improv-ed earnings across our E&P portfolio,” Mulva said.

ConocoPhillips refining and marketing segment lost $4 million in the first quarter, compared with a profit of $205 million in the year-ago quarter, company documents state. Weakened market conditions hurt the refining and marketing segment, but light-heavy crude differentials widened and earnings benefited from lower costs and improved clean product yields.

The company’s chemicals arm, Chevron Phillips Chemical, earned $110 million in the first quarter, compared to $24 million in the same period one year ago, company documents state.

ConocoPhillips’ emerging business arm earned $6 million in the first quarter, according to company documents.

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Home Depot settles California wage case for $25.5 million

2010-04-18T05:49:00.000-07:00

Home Depot has agreed to pay $25.5 million to settle a lawsuit by California employees who complained they were not allowed to take lunch and rest breaks in violation of state law.

The Atlanta-based retail giant is the latest company to face a legal challenge based on California’s labor laws. Retailers Chico's, Abercrombie & Fitch, Costco and Guitar Center also have been sued by California employees. Sandy Springs-based UPS settled with its drivers who complained they didn't get breaks for $87 million. Wal-Mart is appealing a $172 million jury verdict in a similar case.

Stephen Holmes, a Home Depot spokesman, said the company settled because it was “the most expeditious and advantageous business decision – not because we believe there was any wrongdoing on our part.”

A Los Angeles Superior judge approved the Home Depot settlement in January. It came to light in the company's annual report to the Securities and Exchange Commission this month.

Plaintiffs' attorneys said they could not comment on details, but court documents show only California employees of Home Depot and Home Depot Expo from 2000 to 2009 are included in the settlement class. Home Depot has more than 200 stores in California, making it the retailer's largest U.S. market.

The class could number in the tens of thousands, and it appears most members would get no more than a few hundred dollars each, depending on hours worked.

Eight individual plaintiffs will get $25,000 and five will get $15,000 for their effort in bringing the cases.

The plaintiffs’ attorneys will receive $7.65 million in fees plus $751,712 in expenses, which is part of the $25.5 million settlement.

California requires that after five hours of work, an employee must be offered a 30-minute meal period, though it can be voluntarily waived, said Michael J. Walsh, of the Irvine, Calif., firm Walsh & Walsh. The lawyer, who was not involved in the Home Depot case but has followed it, called the California law one of the nation's strictest.

A full-time associate at Home Depot usually works an 8-hour day, according to Holmes, and would be offered an hour for lunch plus two fifteen minute breaks. The lunch hour would be unpaid, he said, though not the breaks. He said Home Depot reiterated its lunch and break policies to its California stores.

The settlement combined eight cases filed in California against Home Depot, the nation’s third largest retailer.

“One of the common themes I kept seeing, at least early in the decade,” said Walsh, “was a lot of companies that were headquartered outside of California tried to have national [labor] standards. But they came up against problems arising from California’s more worker-friendly laws.”

California law changed in the early 2000s, Walsh said, and some companies failed to make sure employees took their required lunch and rest breaks. If breaks aren’t taken, said Walsh, employees could be owed overtime pay per California law. He said some retailers were caught having employees clock out for lunch, but then asking them to work through their break if the store got busy.

In the UPS case, 23,600 California truck drivers claimed they were denied lunch breaks. The drivers were to receive anywhere from a few hundred dollars to $20,000 each from the 2007 settlement, according to news reports. UPS at the time said the dispute arose from a “rigid” new state law and that the company would comply with it.

Walsh said Home Depot, which has successfully defended other employee lawsuits in California, probably faced a toughter challenge this time.

“With that kind of track record, they are not likely to throw good money on a case where don’t see some exposure,” said Walsh. “This isn’t nuisance money.”

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Eaton Vance Declares Quarterly Dividend

2010-04-18T05:44:00.000-07:00

The Board of Directors of Eaton Vance Corp. today declared a quarterly dividend of $0.16 per share on its common stock. The dividend is payable May 10, 2010 to shareholders of record on April 30, 2010.

Eaton Vance Corp. is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates managed $173.1 billion in assets as of March 31, 2010, offering individuals and institutions a broad array of investment strategies and wealth management solutions. The Company's long record of providing exemplary service and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today's most discerning investors.

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FDA Chides Glaxo for Cancer-Drug Ad

2010-04-18T05:41:00.000-07:00

The Food and Drug Administration on Friday said an advertisement for a GlaxoSmithKline PLC cancer drug and a Web site for a bladder treatment the company co-promotes were "false or misleading."

The agency also took issue with a consumer email from Novartis AG about its pain gel Voltaren.

Specifically, an advertisement that ran in a cancer medical journal involving Glaxo's drug Arzerra omitted "important information about the drug's safety and effectiveness," the FDA said in a letter to the company that was posted on the agency's Web site. Arzerra was approved in October to treat chronic lymphocytic leukemia after other therapies fail.

The agency said the ad, which ran in December, failed to reveal any risks associated with the product, including a serious brain infection, pneumonia, fevers and other blood disorders. The agency said a Web-site address provided in the ad that directed people to all the prescribing information for Arzerra doesn't mitigate the "misleading omission of material information from the ad."

Mary Anne Rhyne, a Glaxo spokeswoman, said the Arzerra ad referenced by the FDA won't be used again.

"We are working to resolve any remaining questions and ensure our materials reflect the direction provided by the FDA," she said.

In another letter released Friday, the FDA said a Web site for the drug Vesicare, which is co-promoted in the U.S. by GlaxoSmithKline, of Brentford, England, and Japan's Astellas Pharma Inc., presented unsubstantiated superiority claims and overstated the effectiveness of the product. Vesicare is approved to treat a condition known as overactive bladder.

The agency said information on the Web site suggested Vesicare was better than another drug, tolterodine, at improving incontinence, by citing a study comparing the products. The FDA said the information used to make a superiority claim involved a secondary study endpoint, rather than a main study goal, and doesn't provide enough evidence to suggest Vesicare is better than the other drug.

Both Astellas and GlaxoSmithKline said the Vesicare Web site has been changed to remove the content the FDA was concerned about.

The FDA said a so-called "adherence email" sent by Novartis involving Voltaren, a gel applied to the knees or hands for osteoarthritis pain, "minimizes risks associated with the use of Voltaren Gel, overstates the efficacy of Voltaren Gel and broadens the indication for Voltaren Gel."

The agency said the email "prominently presents efficacy claims" or effectiveness information "in large bolded font size and in colorful text and graphics surrounded by a significant amount of white space" while the "risk information is relegated to the bottom of the email...in single-spaced paragraph format that makes the information very difficult to read."

In a statement, a Novartis spokeswoman said the Swiss company was reviewing the letter it received from the FDA. "We plan to work with the FDA to address concerns," she said.

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Oil production forecast falls by a billion barrels

2010-04-18T05:37:00.000-07:00

A curious thing happened on the way to Alaska's latest long-term oil production forecast.

We lost a billion barrels.

Sound alarming?

It's probably not as bad as it sounds. Read on.

Declining projection

On April 9, the Alaska Department of Revenue released its new state revenue forecast.

The semiannual revenue forecast is a vital document, used by the governor and Legislature to plan a state budget extremely reliant on taxes and other revenue from oil and gas production.

Nearly all of the state's oil production comes from the North Slope, in particular the large Prudhoe Bay, Kuparuk River and Alpine oil fields.

As part of developing the revenue forecast, state officials and consultants must try to forecast the level of future oil production.

The Department of Revenue's latest forecast says North Slope production will total just over 5.2 billion barrels through the year 2050.

That's a great deal of oil, to be sure, worth a staggering $415 billion at today's market price of about $80 per barrel.

But the forecast is well shy of what the department was projecting a year ago: 6.3 billion barrels through 2050.

2,000 forecasts

So what's changed in a year?

Are some Prudhoe Bay wells playing out prematurely?

Are oil companies canceling new fields and other investments?

In fact, one of the biggest changes is the state's new approach to estimating the amount of oil each field is expected to produce.

In the past, the state looked at each field on an aggregate level to forecast production, said Jennifer Duval, a Department of Revenue petroleum economist.

But following the spring 2009 revenue forecast, the department began to review historic production data on about 2,000 individual wells on the North Slope, Duval said. The data come from the Alaska Oil and Gas Conservation Commission, which regulates subsurface work in the oil fields.

The idea was to study and forecast each well's performance to better understand what sort of production could be expected from corresponding fields, Duval said.

"I don't really want to say it's more accurate. We won't know for a while," Duval said. "But each well performs differently."

Already, the technique has been used twice -- for the fall 2009 forecast, and for the spring 2010 forecast.

In predicting well output from one forecast to the next, Duval said: "Some wells we were higher, some wells we were lower, some we were right on. On average, we were pretty good."

Lots of other variables go into the production forecast, she said, including talks with oil companies and a review of the development plans they're required to submit annually to the Department of Natural Resources.

Changing company plans can have a significant effect on the forecast. For example, production from a planned Conoco Phillips development, Alpine West, was "pushed out a year" in the latest forecast, Duval said, because of trouble obtaining a permit from the U.S. Army Corps of Engineers.

"Each forecast is made with a different set of assumptions," she said. "You make your best guess based on all the information you have available to you at the time."

Revenue's new man

The Department of Revenue awarded a contract to Frank Molli to do the production forecasts, starting with the fall 2009 projection. That forecast, like the spring 2010 forecast, predicted about 1 billion fewer barrels through 2050.

Molli is doing the forecasts, including the individual well analysis, using software he wrote himself, Duval said.

Molli isn't an Alaskan. He lives in Colorado Springs, Colo., and is president of Molli Computer Services Inc., his resume says. He has a bachelor's degree in electrical engineering from the University of Colorado, and worked as a process engineer and a reservoir engineer during the 1970s and 1980s for Phillips Petroleum Co.

Is this anything?

So Molli and the Department of Revenue are now forecasting, long-range, some 1 billion barrels of oil less than the department predicted a year ago.

But does this really matter?

As anyone in the oil business knows, a lot can change over 40 years and nobody has a clear enough crystal ball to see all the factors that could help or hurt Alaska oil production -- from drilling success and new technology to shifting politics and company priorities to price swings, weather and wars.

The spring 2009 and 2010 forecasts, near-term, really aren't very different. As an example, for 2015 the forecasts put total North Slope production at 232 million barrels and 227 million barrels respectively. Twenty years further out, in 2035, the divergence between forecasts is more pronounced: 117 million barrels vs. 78 million.

Here's another consideration on the significance of a mere 1 billion barrels when forecasting over decades: The department, for the most part, doesn't even include in its estimates the tens of billions of barrels of known heavy or viscous oil in deposits such as Ugnu and West Sak. Nor does it include known oil discoveries such as Kuvlum and Sandpiper on the federal outer continental shelf, or the potentially vast volumes of oil that might one day be recovered with technologies such as low-salinity waterflood or carbon dioxide injection.

"Accordingly, we believe that our current estimates of ultimate recovery from the North Slope are conservative," says the department's fall 2009 revenue forecast.

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WABCO Develops and Supplies Innovative Electronics and Air Suspension Technology for Luxury Automaker's Newest Model

2010-04-18T05:33:00.000-07:00

WABCO Holdings Inc. (NYSE: WBC) , a global technology leader and tier-one supplier to the commercial vehicle industry, today announced that the company has developed and will supply innovative electronic control technology and a high performance air supply module for original equipment manufacturer Rolls-Royce Motor Cars. WABCO's content will be equipped on the air suspension of the Rolls-Royce Ghost, the newest model in the Rolls-Royce range of luxury sedans.

Enabled by WABCO's and BMW's innovative engineering, the new Rolls-Royce Ghost air suspension is so sensitive that it can detect the movement of a single rear passenger from one side of the seat to the other, and it compensates accordingly. The air suspension system also includes a lift and kneel function, raising or lowering the Rolls-Royce Ghost by 25 millimeters. It assists passengers to enter or exit the vehicle and allows unmatched riding dynamics over uneven road surface.

WABCO's electronic control unit superbly regulates the new Rolls-Royce Ghost's high-tech air suspension, which is pressurized by WABCO's newest generation of high power compressors. The Rolls-Royce Ghost has a state-of-the-art chassis using four-corner air suspension enabled by WABCO's proprietary control algorithms that intelligently distribute air to four air springs. Significantly boosting performance of the new Rolls-Royce Ghost's air suspension, WABCO also enables its virtual silence due to enhanced air management and substantially improved acoustics of WABCO compressors.

"WABCO plays an important role in the success of the new Ghost model," said Mike Thompson, WABCO Vice President, Car Systems. "We are proud of our 23-year track record of innovative electronics and modules for air suspension in passenger cars and light commercial vehicles, and we have a passion for complete, cost-effective modules that satisfy the increasingly strong global demand from car makers and end-users alike for air suspension that significantly enhances ride quality."

In 1986, WABCO introduced its first electronically controlled air suspension (ECAS) system for passenger cars and light commercial vehicles. Today WABCO offers a range of electronic control units and air supply modules for air suspension systems that can be adapted to luxury, midsize and compact passenger cars, sports utility vehicles, and compact vans. Original equipment manufacturers increasingly seek additional functionalities such as speed sensitive adaptation of vehicle body height, which improves vehicle safety while reducing fuel consumption.

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Glenmark settles malaria drug patent dispute with GlaxoSmithKline news

2010-04-13T09:17:00.000-07:00

Glenmark Generics Inc., USA, the US subsidiary of Glenmark Pharmaceuticals Limited (GPL), today announced that it has settled patent issues with GlaxoSmithKline (GSK) concerning atovaquone and proguanil hydrochloride tablets, the generic version of GSK's Malarone tablets use in the treatment of malaria.

Under the terms of the agreements, which are still subject to review by the US Federal Trade Commission and the Department of Justice, Glenmark will be able to market and distribute its atovaquone / proguanil 250mg and 100mg tablets under a royalty-bearing license from the London-based GSK in the 3rd quarter of calendar year 2011, or earlier under certain circumstances.

Glenmark said in a statement that it believes that it is entitled to 180 days of exclusivity with respect to its atovaquone / proguanil tablets as the first generic to file an Abbreviated New Drug Application (ANDA) for the drug.

ANDA is an application filed for a generic drug approval in the US for an existing licensed approved drug. GSK, the UK's biggest pharmaceutical company, currently markets its product as Malarone in the US, a drug prescribed for the prevention and treatment of malaria.

The IMS Health has reported that the total US sales of Malarone for the 12 month period ending December 2009 were approximately $56 million.

Glenmark Generics Limited (GGL) is a subsidiary of Glenmark Pharmaceuticals Limited (Glenmark) and aims to be a global integrated Generic and API leader.

GGL has an established presence in North America, a developing EU presence and Argentina and maintains marketing front-ends in these countries. It primarily sells its FDF products in the US and the European Union, as well as its oncology FDF products in South America.'

The Company supplies APIs to customers in approximately 63 countries, including the US, various countries in the EU, South America and India.

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GlaxoSmithKline: The Unluckiest Pharma Company in the World

2010-03-25T11:33:00.000-07:00

GlaxoSmithKline (GSK), the world’s second-largest drug maker, just can’t seem to catch a break.

It appears the Swiss pharma giant can do nothing right these days. First, there was Advair, the asthma drug that worsened the condition with prolonged use, then there was Avandia, the diabetes drug which has been shown to cause heart attacks. Now, there is GSK’s vaccine for the diarrhea-inducing virus Rotarix. The vaccine was found to contain traces of the supposedly innocuous pig disease called porcine circovirus.

Several governments have advised their doctors to avoid treating patients with the drug until the risk of the unintended ingredients can be determined. Switzerland is the most recent country to issue a cease and desist order. The company spokespeople insist this is only a temporary precaution, and that those who have already been inoculated with the drug have nothing to fear. Stay tuned for further mishaps from GlaxoSmithKline, we predict their heavy-hitter, Tums, will be shown to cause indigestion and heartburn.

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Pfizer and GlaxoSmithKline in deal to supply low-cost vaccines

2010-03-25T11:29:00.000-07:00

Pfizer and GlaxoSmithKline will supply hundreds of millions of doses of their pneumonia vaccines to the world's poorest countries at heavily discounted prices under a novel agreement, reports the New York Times.

The deal was announced by the Gavi Alliance, a non-profit organisation, which estimated the program could save a total of 900,000 lives by 2015 and up to seven million lives by 2030.

Pneumococcal disease not only kills small children but also maims, leaving survivors with high rates of mental disability, seizures and deafness, says Sarah Boseley in the Guardian. She continues: "There's no doubt about the good that such a vaccine can do. But there will continue to be questions about the way the deal has been done, not least because it is the first of its kind and sets a pattern for the future".

Pfizer and GlaxoSmithKline will provide up to 300 million doses each of their vaccines over a 10-year period under the new agreement. The price for the first 20% of the supply will be $7 a dose. Then the price will drop to $3.50 a dose for the remainder. The vaccines would be paid for by donations raised by Gavi and by the governments of the countries that ordered the vaccines. In Western markets, the pneumococcal vaccines sell for $54 to $108 a dose.

"For the price of a Starbucks latte, developing countries are going to be able to buy a dose of a life-saving vaccine," said Orin Levine, director of the international vaccine access center at the Johns Hopkins Bloomberg School of Public Health, who has worked with GAVI.

The NYT reports that officials involved in the deal say that it historically took many years for a vaccine developed in the West to trickle down to developing countries. But the new program would make the first vaccines available to Africa this year.

"American kids and African kids will get this new vaccine in the same year," Dr. Levine of Johns Hopkins said. "That's just never happened before."

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Conoco to halve its 20 percent stake in LUKOIL

2010-03-25T11:19:00.000-07:00

ConocoPhillips said it plans to halve its 20 percent equity stake in Russian oil major LUKOIL as part of a program to boost returns and reduce debt.

Conoco, which has big exposure to a weak refining market and is challenged by exploration and production assets in North America that are tilted toward less-profitable natural gas, lags its oil major peers in returns.

ConocoPhillips released a bare-bones plan to revive its finances five months ago, which included the sale of $10 billion in assets.

At the time, investors and analysts speculated that Conoco might sell part of its stake in the Russian oil major and last week Reuters reported that Conoco had decided to do so.

It is "more appropriate" for the company to use proceeds from part of its LUKOIL interest to increase shareholder value, Jim Mulva, Conoco chief executive, told the company's annual meeting with analysts. But he also said it was important for the company to remain in Russia.

LUKOIL was the most likely buyer of the 10 percent stake, which is worth $4.9 billion, analysts at Raymond James said in a research note.

LUKOIL Vice President Leonid Fedun told analysts in London that his company would not rule out buying the shares being sold by Conoco, but added that the Kremlin could oppose such a move.

Conoco said potential dispositions in 2010 include its interests in the Syncrude oil sands project and the Rex pipeline, 10 percent of its Lower 48 and Western Canada portfolio, and its remaining gasoline retail operations.

About half of the assets will be sold in 2010, and the remainder in 2011, the company said.

The company also said it plans a $5 billion share repurchase program and will raise its dividend 10 percent.

The third-largest U.S. oil company said it expects per share production growth of 3 percent in 2010 and 2011 and 3 percent to 5 percent in subsequent years.

At 1600 GMT, the company's shares were up 7 cents, or 0.1 percent, at $52.58 on the New York Stock Exchange.

LUKOIL's Fedun said planned tax breaks in Russia meant its cash flows could rise and that the Kremlin could object if this money was spent buying back the shares.

"The political leadership of the country may see it negatively," he said.

He added that any purchase would depend on LUKOIL's other financial obligations and said he himself would not buy the shares. Fedun already owns 9 percent of LUKOIL.

LUKOIL, Russia's No. 2 oil producer missed forecasts when posting a 23 percent drop in 2009 profit on Wednesday.

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Buffett's Berkshire Hathaway continues to dump Moody's stock

2010-03-25T11:08:00.000-07:00

Warren Buffett continues to show that he's no longer in the mood to be a Moody's investor.

Buffett's Berkshire Hathaway reported additional sales of the credit rating firm in an SEC filing Monday. Berkshire has reported such sales at least a half-dozen times in the past year and seems on its way to liquidating the entire stake.

The latest filing reported that Berkshire sold 815,905 shares last week. That raised about $24 million for Berkshire, mere pocket change.

Berkshire still owned about 31 million shares of Moody's Corp. as of the filing.

Berkshire is required to report the transactions within two days of their occurrence because it owns more than 10 percent of the company's stock. Once that ownership level falls below 10 percent, which it seems nearly certain to do, Berkshire will no longer have to update its sales each time they're made.

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GlaxoSmithKline makes vaccine executive changes

2010-03-14T00:39:00.000-08:00

British pharmaceutical company GlaxoSmithKline PLC on Friday announced two changes in the executive lineup of its vaccines business.

Jean Stephenne was appointed chairman of GSK Biologicals with immediate effect. He will also continue in his current role as president of GSK Biologicals.

Over the next two years, Glaxo said, operational responsibility will be taken over by Dr. Moncef Slaoui, who will also continue as chairman for research & development.

"Jean has built a world-leading vaccines business and as chairman will continue to be instrumental in driving forward our public health agenda," said Chief Executive Andrew Witty.

"Moncef has more than 17 years experience working in the vaccines area and has played a critical role in developing the strong pipeline we have today. These changes will ensure continued strong focus on delivery and development of this pipeline."

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Growing transportation demand suggests global freight recession over: United Parcel Service

2010-03-14T00:29:00.000-08:00

United Parcel Service (NYSE:UPS) and logistics firm Expeditors International (Nasdaq:EXPD) have indicated that strong air freight growth last fall continued through at least January.

A recent surge in demand for rail, truck and air transportation suggests the global freight recession may have ended, industry analysts said Friday.

After bottoming out in the second quarter of 2009, demand has materially strengthened over the last four weeks, says a report from UBS analysts Rick Paterson and Fadi Chamoun.

The International Air Transportation Association recently revised its outlook, saying cargo volumes should increase by 12 per cent in 2010. That's up from seven per cent in earlier forecasts.

The Port of Long Beach says its container traffic grew by 30 per cent in February from last year.

The American Trucking Association said its seasonally adjusted truck tonnage index was up 1.9 per cent in January.

Railways in Canada and the United States saw their non-coal volumes increase over the last week from a year ago.

Total carloads grew by 13 per cent to 739,292, the highest level since November 2008. They are also up 3.5 percentage points from the previous week.

Carloads were down 9.8 per cent from 2008 but things are at least moving in the right direction, added Walter Spracklin of RBC Capital Markets.

Canadian railways were ahead of their U.S. peers, with carloads up by 20.5 per cent compared to an 11.4 per cent increase south of the border, he said in a report.

Canadian carloads improved 9.5 percentage points from the previous week, while U.S. carloads were up 2.2 percentage points.

Canadian National Railway's (TSX:CNR) carloads grew the most, up 23.8 per cent over the week, compared to a group average increase of 13 per cent.

So far this year, its carloads are up 13.4 per cent.

At Canadian Pacific Railway (TSX:CP), carloads increased by 5.3 per cent during the week and five per cent for the year to date. Intermodal traffic grew by 19.2 per cent for the week but is down 0.9 per cent year to date.

Overall Canadian volumes were driven by an 86-plus per cent surge of gravel and metallic ores. Chemicals were up 34.3 per cent and automobiles 42.5 per cent.

Grains decreased by 5.7 per cent in the week. Pulp and paper products were down marginally but lumber was up 13.6 per cent.

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GE Capital, Navistar Partner On Truck Loans

2010-03-11T08:46:00.000-08:00

General Electric Co.'s (GE) financing unit will provide customer loans for commercial truck maker Navistar International Corp. (NAV), giving Navistar the ability to finance larger truck fleet purchases.

The partnership between the two companies, which will be called Navistar Capital, will effectively transfer Navistar's retail-level lending operations from its finance subsidiary to General Electric Capital Corp. The new venture will commence in about 90 days, the companies said Tuesday.

About 60 Navistar Financial employees who support its retail lending business will join GE Capital to manage lending under the new venture, the companies said. Navistar Financial, meanwhile, will continue to provide financing for truck purchases by the company's independent dealers.

The two companies declined to divulge how much money GE Capital is committing to Navistar Capital or the details about profit-sharing between the companies. The agreement announced Tuesday will run for three years, followed by one-year automatic renewals that will run indefinitely.

Navistar Financial has been providing customer loans totaling $1 billion to $2 billion a year. The company's traditional focus has been on small and medium-sized trucking companies that have limited credit options elsewhere.

But Navistar has been under pressure in the past year to expand its lending volume as large trucking companies look to the company for purchase financing as they replace their truck fleets. Tighter credit standards have put bank loans off limits for many of these companies, prolonging a sales slump in the commercial truck industry that began in 2007.

Navistar said the ability to provide in-house financing for large truck deals will make the Illinois company more competitive with rivals such as Daimler AG's (DAI, DAI.XE) Freightliner truck line and Paccar Inc. (PCAR).

GE Capital has provided financing for Navistar's customers in Canada for the past 25 years. The Connecticut company also has similar partnerships with other equipment makers, including for the Bobcat-brand of compact construction equipment. GE Credit operates about 40 commercial lending programs across a variety of industries.

Navistar noted that the infusion of capital from GE will allow Navistar to expand its financing options, particularly a lease-to-own program for trucks buyers. Navistar Capital also is expected to strengthen Navistar's balance sheet by lessening Navistar Financial's reliance on borrowing to generate capital for loans.

"The deal is a mild positive for Navistar," said Gregg Lemos Stein, a credit analyst with Standard & Poor's, in a written statement. "We believe the alliance will reduce the risk of heavy funding requirements at Navistar Financial Corp."

Navistar, which has a below-investment-grade credit rating, has been an active issuer in the public market for asset-backed securities. Navistar Financial in January was in the market with a $250 million equipment bond for dealer financing. The security is eligible for financing under the Federal Reserve's Term Asset-Backed Securities Loan Facility, which is intended to rejuvenate the consumer loan-backed market.

Bill McMenamin, vice president of Navistar Financial, predicted the company will lessen its exposure to the asset-backed market once Navistar Capital takes over customer lending.

"Navistar Financial will become a smaller, but more conservatively financed company," he said.

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Walmart Sales Fell 2% in the Fourth Quarter

2010-02-18T15:46:00.000-08:00

Wal-Mart Stores Inc. (WMT ), the world's largest retailer, reported that sales fell 2% in the fourth quarter compared to the same period last year. More bad news is on the way. Walmart also forecast a "challenging" first quarter.

All of the big guns at Walmart offered their reasons for the decline. Deflation in the price of groceries, which account for 40% of sales, was one factor. Price discounts in electronics and flat screen TVs were also cited.

Tom Schoewe, chief financial officer, said customer traffic had fallen and, among other things, cited the remodeling of Walmart stores under Project Impact.

The retailer reported adjusted earnings of $4.5 billion or $1.17 per diluted share. Full-year sales increased 4.6% to $112 billion. International sales surpassed $100 billion.

Mike Duke, chief executive, said sales had exceed expectations for the fourth quarter. It ended the year with inventory down 7.8%. He expects the first quarter to be "challenging."

For the current fiscal year, the company expects diluted earnings per share to come in at $3.90 to $4.00. First quarter earnings per share are expected to be between $0.81 to $0.85.

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GE and Hitachi want to use nuclear waste as a fuel

2010-02-18T15:42:00.000-08:00

One of the world's biggest providers of nuclear reactors, GE Hitachi Nuclear Energy (a joint venture of General Electric and Hitachi), wants to reprocess nuclear waste for use as a fuel in advanced nuclear power plants, instead of burying it in waste repositories such as that proposed at Nevada's Yucca Mountain.

Conventional nuclear power plants in the US only harness around five percent of the energy of nuclear fuels. The reprocessing technique would separate nuclear waste into different types of fuels, some of which can be used in conventional nuclear power plants, and some of which can only be used in advanced fast neutron reactors. Reprocessing of nuclear waste to extract more useable fuel has been criticized in the US because it produces pure plutonium, which could be stolen and used to make nuclear weapons. To get around this difficulty, GE Hitachi’s proposed method produces a fuel that is much harder to steal.

The GE Hitachi process separates wastes from conventional nuclear power plants into three streams, by applying voltage to a molten salt. The first waste material consists of the products of fission, which cannot be further used as fuel and will need to be stored, but the storage time required is reduced from tens of thousands of years to a few hundred years (although a small fraction of the material will still need to be stored for over 10,000 years). The second material is uranium that does not have enough fissile material to be used in the light water uranium reactors in the US, which need enriched uranium, but it can be used by deuterium (heavy water) uranium reactors, which are used in Canada.

The final group of waste products is a mixture of transuranic elements including plutonium and neptunium. The plutonium is not separated from the other elements, and the mixture releases 1,000 times more heat and 10,000 times more neutrons than pure plutonium. This makes it much harder to steal, and therefore less of a security risk, and it is also much easier to detect. The mixture of transuranic elements can be used in nuclear reactors that use molten sodium as the coolant rather than water, and this type is used in Japan and a few other countries. GE Hitachi has designed a reactor known as the PRISM reactor that would be able to use the mixed fuel, but sodium cooled reactors have not been approved for use in the US.

A GE Hitachi spokesman said previous US administrations had little interest in re-using spent nuclear fuel, but the Obama administration is increasing support for nuclear power and looking at possibilities such as reprocessing. If adopted, the proposal would significantly decrease the amount of dangerous nuclear waste that needs to be stored.

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GE Energy, Partner Seek Smarter Way To Charge Electric Cars

2010-02-18T15:35:00.000-08:00

GE Energy has entered into a partnership with electric vehicle plug developer Juice Technologies LLC to integrate smart-metering technology into charging devices. GE Energy, a unit of General Electric Co. (GE), has been developing products and services to help the integration of advanced energy technologies into the transmission system in a way that allows better use of power resources. The partnership with Juice is its first move into electric car charging technology.

With advanced metering technology incorporated into charging devices developed by Juice, GE hopes vehicle owners will be able to manage the charging, the same way smart meters are being deployed to help people monitor electricity use. Clemente also said utilities may eventually develop a rate system whereby electric vehicle owners would have an incentive to charge up their cars during off-peak hours, and the smart charging stations would help them control that.

GE said it will start offering the chargers with Juice's technology in the second half of this year.

GE is in talks with original equipment manufacturers in the auto industry to discuss the adoption of its meters, which it believes will be used both at homes as well as in public charging infrastructure.

Some electric vehicle developers are offering charging kits to be installed in their customers' homes. For instance, ClipperCreek Inc. delivered chargers for Tesla Motors Inc.'s Roadster and BMW AG's (BMW.XE) Mini E, and Nissan USA has a deal with AeroVironment Inc. (AVAV) to use its chargers for the fully electric Nissan Leaf.

Juice Technologies, which worked with utilities and the Ohio State University's Center for Automotive Research to develop its technology, has also developed a kit for homeowners to manage their energy consumption that is marketed under the brand PlugSmart.

Juice is backed by private individual investors as well as "a significant equity investment" by a large consumer electronics company, with which Juice is working to market its home energy management technology, said Aaron Martlage

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ConocoPhillips President Dies in Avalanche

2010-02-15T08:16:00.000-08:00

State troopers are watching the weather for a chance to return to the scene of an avalanche that killed Conoco Phillips Alaska President Jim Bowles and left another Conoco worker missing Saturday on the Kenai Peninsula.

Low clouds, high winds and heavy rain prevented searchers from looking for the body of 40-year-old Alan Gage Sunday, according to troopers. Friends say the father of two disappeared in a cloud of snow when a slide walloped their snowmachine group in the Grandview area wilderness.

He is presumed dead.

Other snowmachiners on the trip said it took as little as 15 minutes to generally locate Bowles -- head of the largest oil and gas producer in Alaska -- but 90 minutes to shovel him out of the snow. Members of the group said they then tried for up to an hour and a half to revive him.

"We dug and probed and CPR'd until it was dark," said Ed Gohr, a former Conoco employee who is part-owner of an equipment rental company and rode with Bowles and Gage Saturday.

Gohr and another snowmachiner, CH2M Hill Vice President Bob Lacher, described the avalanche moment-by-moment Sunday. Here's what happened, they said:

Bowles and another rider were at the front of a pack of about 10 snowmachiners riding in groups along a relatively flat bench. They traveled beside a tall mountain -- it looked to be 3,000 to 4,000 feet -- loaded with snow.

Gage was following close behind the two leaders. At some point, Bowles' snowmachine became stuck, Lacher said, and another rider ran over to help.

"About that time, I just happened to be looking up as I was traveling up the bench and saw the first of about four or five pieces of the mountain break loose," Lacher said.

The avalanche began about 500 to 700 yards above the snowmachiners, he said. The first wave of snow hammered the rider who had been trying to help Bowles, slamming him into the throttle. His machine accelerated to safety.

But Bowles was caught -- pinned beneath 10 feet of snow, his friends said.

GAGE DISAPPEARS

Lacher managed to turn his machine around and speed back the way he'd come.

"Just as I did, I saw Al (Gage) up and to the left get hit with the main force of the avalanche and disappear in a cloud," he said.

Lacher waved and pointed, warning the nearest snowmachiners to spin around and accelerate out from under the avalanche, he said

After the avalanche, other snowmachiners in the area joined in the search. They could see one of the skis from Gage's snowmachine poking through the snow, but no sign of the rider, the men said.

"Because Jim had a beacon we were able to find him, I'd say in 15 or 20 minutes, we knew what part of the mountain he was buried under," Lacher said.

The slide came maybe 100 yards from an area where the group had been riding for 25 minutes, Gohr said.

ROLE OF BEACONS

The avalanche was reported to troopers at about 12:30 p.m. along the west ridge of Grandview, about a half mile from Mile 43 of the Alaska Railroad tracks between Girdwood and Seward.

Initial trooper reports said Bowles was buried for about 45 minutes before friends located him, and announced dead after rescuers tried to revive him for at least 30 minutes.

"One of the party members rode down about a mile to the railroad tracks and contacted a railroad worker who then contacted us," said Trooper Howie Peterson.

The section of the avalanche that caught the snowmachiners was about 150 yards high by 150 yards wide, Peterson said. "It was a heavy, slow moving slide."

Troopers said late Saturday night that Bowles and Gage weren't wearing beacons. But Bowles was apparently found with the device, troopers spokeswoman Megan Peters said Sunday.

Troopers still believe Gage was not carrying a beacon. Lacher and Gohr, his fellow snowmachiners, agree.

Gage's wife, Dalon Gage, says that's hard to imagine. Her husband her "always played it safe," she said.

"This was not a go goof-off, play around, screw-off group of guys," Dalon Gage said. "They were very safe, well-versed, trained."

BAD WEATHER

Alan Gage grew up in Alaska and is an avid outdoorsman who often hunted and fished with other members of Saturday's group, she said.

He worked for the oil field services company Veco for eight or nine years before joining Conoco about five years ago, where he worked as a project control lead for the company's capital projects division, Dalon Gage said. Conoco runs the big Kuparuk River and Alpine oil fields on the North Slope.

Along with Bowles, most of the snowmachine group were friends who work in the energy business or supporting industries and get together for outdoor trips, the snowmachiners said.

Lacher and Gohr worked with Gage at Veco at one time, they said. Another of the snowmachiners along on the trip, Eric Spitzer, is a state trooper who led the efforts to revive Bowles, Lacher said.

The search for Gage was called off as darkness fell Saturday night, while poor weather prevented Troopers from looking again on Sunday.

There was a low cloud ceiling, high winds and heavy rain in the region, Peterson said. "Everything is ready to go as far as the search. It's just weather permitting."

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Norfolk Southern Facilitates $3.1 Billion in Industrial Investment Along Rail Lines in 2009

2010-02-13T03:11:00.000-08:00

Norfolk Southern Corporation in the location of 70 new industries and the expansion of 23 existing industries along its rail lines in 2009.

New plants and expansions represented an investment of more than $3.1 billion by Norfolk Southern customers and are expected to create 3,000 jobs in the railroad's territory, eventually generating more than 138,500 carloads of new rail traffic annually.

Norfolk Southern assisted state and local government and economic development officials throughout 19 states in helping customers identify ideal locations for new and expanded facilities.

"The energy sector anchored our results during 2009," said Newell Baker, assistant vice president industrial development. "Our group assisted in the location or expansion of 24 energy related facilities in 12 states across our service area. Ethanol production and distribution accounted for the lion's share of energy projects, with 11 new and expanded facilities that began to receive NS rail service in 2009."

The balance of other projects secured during 2009 was distributed among several of the broad product areas Norfolk Southern serves.

Norfolk Southern works with state and local economic development authorities on projects involving site location and development of infrastructure to connect customers to its rail system and provides free and confidential plant location services, including industrial park planning, site layout, track design, and logistics assistance. During the past 10 years, Norfolk Southern's Industrial Development Department has participated in the location or expansion of 1,084 facilities, representing an investment of $23.9 billion and creating nearly 50,000 customer jobs in the territory served by the railroad.

Norfolk Southern Corporation ( NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates approximately 21,000 route miles in 22 states and the District of Columbia, serving every major container port in the eastern United States and providing efficient connections to western rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is North America's largest rail carrier of metals and automotive products.

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GlaxoSmithKline to cut 380 jobs at UK research facility

2010-02-13T02:46:00.000-08:00

UK-based pharmaceutical group GlaxoSmithKline is planning to reduce its workforce at the company's R&D facility in Harlow, Essex. According to reports, approximately 380 employees are likely to lose their jobs at the facility.

The company has decided to implement the job reductions following the completion of projects for pain relief, anxiety and depression drugs.

Andrew Witty, CEO of GlaxoSmithKline, was quoted by Canadian Business Online as saying: "Glaxo would discontinue research in some areas including depression and pain, and would focus more on degenerative and inflammatory diseases such as Alzheimer's disease and Parkinson's disease."

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Conn. blast fuels plant plan’s critics

2010-02-13T02:37:00.000-08:00

Carlsbad Fire Chief Kevin Crawford said that this week’s fatal explosion at a Connecticut power plant has validated his city’s stand that such projects are dangerous and shouldn’t be underestimated.

The blast occurred Sunday, three days after public hearings wrapped up on a proposal by NRG Energy to build a 540-megawatt plant next to Interstate 5 in Carlsbad.

Construction of the 620-megawatt plant in Middletown, Conn., was nearing completion when crews were testing a natural-gas line. The blast ripped a giant hole in the works, killing five workers and injuring 27. The explosion was heard 20 miles away.

“It gives me a sense that maybe in the eyes of other people, my opinion is getting validated a little,” Crawford said. “Here’s exactly what we were trying to say.”

However, Steve Hoffmann, president of NRG Energy’s Western division, which has proposed the Carlsbad plant, said it’s wrong to link the two.

“I don’t believe you can draw a parallel,” Hoffmann said. “The Kleen Energy (in Connecticut) plant and the Carlsbad plant are very different.

“The Kleen Energy plant was in a building. Natural gas was released in a building … and went off, and that’s what caused the explosion.”

He said the Carlsbad plant will be in the open, so gas can’t concentrate in an enclosure and cause the same kind of blast.

Matthew Layton, manager of the California Energy Commission’s engineering office, said the Connecticut blast hasn’t changed the way the commission is evaluating the Carlsbad proposal, or others, because the agency already places a high importance on safety.

The commission has the authority to license power plants in the state. Two of the commission’s five members held a hearing in Carlsbad from Feb. 1-4, gathering information on all aspects of the plant.

NRG has proposed the plant on its 95 acres west of Interstate 5 and north of Cannon Road, and east of the coastal railroad tracks. It owns and operates the Encina Power Station on the same property, closer to the ocean.

City officials oppose the project. They say the location is no longer suitable for heavy industry. Carlsbad fire officials told the commission last week that the proposed access road encircling the plant would be too narrow, limiting firefighters’ access in an emergency.

However, NRG’s safety experts testified that the plant’s concrete-and-steel construction would render the structure practically noncombustible. Valves installed along the plant’s natural-gas lines would enable workers to cut the supply should a fire erupt, and thus prevent its spread, they said.

Frank Collins, an NRG safety expert, told commissioners that the control measures would be so sophisticated that “the Fire Department is a backup to fire-suppression systems on large fires.”

“Their testimony would indicate to me that maybe they don’t have the same degree of concern or appreciation for the impact of any incident,” Crawford said.

“We’re in the worst-day-of-your-life business and need to get the upper hand. It really says to me, OK, we’re really on the right track on this,” Crawford said, in reference to the explosion.

NRG’s Hoffmann said the company is well aware that disasters happen, and that’s why the plant would have built-in detection, suppression and monitoring systems. He called the Fire Department’s statements about potential danger “wild speculation” and said Encina’s safety record is exemplary.

When questioned last week, Carlsbad fire operations Chief Chris Heiser testified that there have been few recent incidents at Encina. The worst accident was in 1976, when six people died in a crane accident, he said.

Recent reports from Middletown indicate that gas may have vented outside the building into an enclosed area, where welding equipment ignited it.

The Connecticut disaster is prompting calls by residents elsewhere in the country to challenge power plants. Opponents of a proposed gas-fired plant in Brockton, Mass., jammed a state legislative hearing Tuesday, urging lawmakers to block its construction.

California Energy Commission officials hesitated this week to draw conclusions about Sunday’s explosion, saying they want to see the results of an investigation first. However, they said initial reports from Connecticut raised some concerns, such as the procedures used in venting the gas.

“The commission doesn’t allow venting gas into a confined space,” said Layton, the commission’s engineering office manager. “You would vent on a day that would make sure there isn’t a confined area (that would) lead to such an event.”

He also said it wasn’t clear how closely Connecticut officials monitored the venting. He said California requires a chief building officer and a safety monitor to be present for gas venting, and that it didn’t appear a monitor was there.

Layton said commissioners are familiar with the safety debate at the Carlsbad plant. The commission is expected to make a final decision on the proposed plant by the end of the year.

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Eaton Corp. shares rendering of planned Beachwood headquarters with workers

2010-02-13T02:26:00.000-08:00

Eaton Corp. shared a rendering of its planned Beachwood headquarters with its employees today, giving a first glimpse of the 470,000-square-foot structure that the company says it will begin building in early 2011.

Appearing to be mostly glass from the outside, the $170 million, semi-circular headquarters will cradle a lake and will be surrounded by walking paths on its 53-acre site, which is the highest point in Cuyahoga County. The development includes a 220,000-square-foot parking garage for Eaton employees. Executives in the highest of the building's 10 floors are to have views of downtown Cleveland and Lake Erie.

In an e-mail to Crain's, Eaton spokeswoman Kelly Jasko said the company plans to move about 700 of its local employees, including those now housed at Eaton Center in downtown Cleveland, to the new building in late 2012.

Site preparation and infrastructure work should begin this summer, the company reported.

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Eaton’s Cutler Says U.S. Doesn’t Need Another Stimulus Package

2010-02-13T02:06:00.000-08:00

Eaton Corp., the maker of hydraulics and automotive valves, said the U.S. government doesn’t need another economic-stimulus plan even as his company expects about $1 billion in related funding.

“From a pure economic view, do you need another stimulus plan? Probably not,” Chief Executive Officer Sandy Cutler said in an interview from company headquarters in Cleveland. “Every economy goes through three phases -- there’s an early phase, a mid phase and a late phase -- and that won’t be changed by a stimulus program. Part of what we are seeing now is the early- cycle businesses are recovering.”

Eaton, which also makes power meters and lighting controls, has forecast it will capture $500 million in stimulus funds this year and another $500 million in 2011. The company “immediately” began seeking opportunities to benefit from spending in the $787 billion package that passed last year while Congress was debating the legislation, Cutler said.

The company pursued projects such as rebuilding housing on U.S. military bases and improving efficiency in federal buildings.

“Buried within the stimulus packages are very specific programs that have a pretty good mapping to Eaton’s electrical businesses,” said Eli Lustgarten, an analyst with Longbow Securities in Independence, Ohio. Lustgarten recommends buying Eaton’s shares.

The U.S. should ease away from monetary and fiscal measures that have kept interest rates low and bring them back to about 3 percent, Cutler said in the Feb. 10 interview. Providing research and development credits and making more loans available to small businesses would remedy an underemployment rate of about 17 percent, he said.

Small Businesses

“When the economy starts to move up, that’s normally when your small business goes bankrupt,” said Cutler, 58. “They’ve lived off of their working capital for a year and now when they start to get their first orders in, they place the order, they go to their bank, they can’t get the loan.”

Cutler joined Eaton in 1979 and has served as CEO since 2000. He reduced the company’s reliance on truck and automotive markets to about a quarter of revenue from almost 40 percent of sales in 2004. The company has a larger presence in housing, non-residential construction and aerospace and expanded its international business to more than half of revenue from about 35 percent in 2004.

Net income last year dropped 64 percent to $383 million and sales declined 23 percent as the global recession reduced demand. The company trimmed the workforce by about 17 percent since 2008 to about 70,000 and last year imposed one week of unpaid furlough per worker each quarter. Eaton forecasts 2010 sales increasing about 11 percent, driven by higher demand, a gain in market share and favorable foreign exchange rates.

Auto Demand

The company is seeing demand increase in its auto and trucks unit as is typical early in an economic cycle, Cutler said. The global recovery will be a more muted rebound with higher-than- normal growth from underdeveloped countries, he said.

“I think 2010 in many ways is a transitional year,” Cutler said. “And I think that’s the way one has to think about it in terms of an economic recovery, because many end-markets won’t return to their 2007-2008 time period until we get out into the 2011 and 2012 time period.”

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Gannett’s USA Today to Impose Leave, Extend Pay Halt

2010-02-12T10:16:00.000-08:00

Gannett Co.’s USA Today will enforce a weeklong unpaid leave for about 1,500 employees between the end of this month and July to help counter declining advertising and circulation sales, according to a memo to staff.

A yearlong freeze on pay increases begun in February 2009 also will be extended by at least 90 days, the newspaper’s publisher, David Hunke, said today in the memo.

“National advertising revenues in general were still down from the previous year as were paid advertising pages at USA Today,” Hunke said in the memo. “Circulation sales continued to be lower” in the fourth quarter.

Gannett said in December it would require most local newspaper employees to take five days of unpaid leave this quarter, though USA Today employees originally weren’t affected. The McLean, Virginia-based publisher enforced two weeks of unpaid leave for many workers in 2009.

Ed Cassidy, a spokesman for USA Today, confirmed the memo in an e-mail.

Circulation for USA Today, the second-largest by distribution, fell 17 percent from a year earlier to 1.9 million on an average weekday in the six months through September, according to the latest data from the Audit Bureau of Circulations. That compares with an 11 percent plunge industrywide.

The company last year posted a 28 percent decline in publishing advertising revenue to $2.97 billion, according to a Feb. 1 statement. It didn’t break out USA Today’s ad sales.

Ad Hire

Hunke said in a separate statement today that USA Today has hired Gordon Lee Jones as new senior vice president of advertising, replacing Brett Wilson, who stepped down last year. Jones previously was senior vice president of sales and marketing for Cablevision Systems Corp.’s Newsday.

In December, Gannett said it couldn’t rule out additional unpaid leave time this year. Robin Pence, a Gannet spokeswoman, said in an e-mail message that USA Today’s action today was not part of a larger strategy.

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Wabco TVS inks supply pact with Mahindra Navistar

2010-02-12T10:10:00.000-08:00

Wabco TVS (India) Limited, part of global technology leader Wabco Holdings Inc of Belgium, a tier-I global supplier for the commercial vehicles industry, has entered into an agreement with Mahindra Navistar Automotives Limited (MNAL), a manufacturer of trucks and part of M&M Group. The pact is for development and long-term supply of air compressor technology products for braking systems and clutch servo technology products.

MNAL, a joint venture between M&M and Navistar, Inc of the US, manufactures a range of trucks and tractor-trailers that set new levels of reliability, efficiency and customer value for the commercial vehicle industry in India.

“Our commitment is to develop and deliver an entire spectrum of commercial vehicles that will benefit our customers in ways that until now are unseen and unheard of in the industry. By partnering with Wabco TVS in India for rigid trucks, we can create and sustain new value in the marketplace through technology innovation that enhances our products for local and export markets,” said Rakesh Kalra, managing director, Mahindra Navistar.

“We are proud to partner with Mahindra Navistar as they move forward to grow their position in high quality commercial vehicles in India and abroad,” said P Kanniappan, managing director, Wabco-TVS (India) Limited. “This significant new business with MNAL further leverages the well-anchored leading position of Wabco TVS in the local market and our ability to maximise value for our customers through improved vehicle safety, increased fuel efficiency and driver effectiveness,” he added. According to Leon Liu, Wabco president (Asia-Pacific), “We are passionate about partnering with MNAL as we continue to contribute to Wabco's pioneering engineering and highly reliable products while further growing our position in emerging markets through deep connectivity with customers.”

This agreement confirms Wabco’s number one position in air compressor technology globally, particularly in India. It also enlarges Wabco's already broad and successful customer base in Asia, he added.

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