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DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. The author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and that you confirm the facts on your own before making important investment commitments.
Showing posts with label Results. Show all posts
Showing posts with label Results. Show all posts

Saturday, February 13, 2010

GlaxoSmithKline to cut 380 jobs at UK research facility

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

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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Sunday, January 31, 2010

(WLP) WellPoint Beats Consensus Earnings Estimates

(WLP) reported fourth quarter as well as full-year results for fiscal 2009.

The company earned $1.16 per share in the fourth quarter as opposed to $1.34 in the year-ago quarter. The Zacks Consensus Estimate for the quarter was $1.02. For the full-year 2009, Well Point earned $6.09 which was above the year-ago earnings of $5.48 and the Zacks Consensus Estimate of $5.91.

Total operating revenues for the quarter came in at approximately $15.1 billion as opposed to $15.4 billion in the year-ago quarter. The decrease was primarily attributable to lower fully insured enrollment in 2009, partially offset by the rise in premium rate. Total operating revenues for 2009 came in at approximately $60.83 billion as opposed to $61.58 billion in 2008.

Operating gains for the Commercial Business segment decreased 56.5% to $316.8 million in the reported quarter. The decline was due to restructuring costs incurred by WellPoint in addition to a reduction in fully insured enrollment and an increase in the benefit expense ratio for the Local Group business. Operating gains for the Consumer Business segment fell 32.6% to $158.9 million in the quarter. The Other segment reported a 15.7% year-over-year increase in operating gains.

The health insurer completed the sale of NextRx subsidiaries to Express Scripts, Inc (ESRX) on Dec 1, 2009 and received consideration of $4.7 billion from the transaction and recognized a pre-tax gain on the sale totaling $3.8 billion in the reported quarter.

We were disappointed to see a significant decline in medical enrollment. Medical membership came in at 33.7 million as of Dec 31, 2009, which represented a decrease of 3.9 % from Dec 31, 2008. Medical expenses also climbed during the quarter to a benefit-expense-ratio of 84.8% from 83.4% in the year-ago quarter.

The membership decline was most significant in the Local Group business, which saw a 989,000 member decline from the prior-year period. The decrease in membership in this segment was primarily attributable to lapses and in-group enrollment losses arising from the recession and the consequent rise in unemployment.

Enrollment in State Sponsored business witnessed a decrease of 259,000, as WellPoint withdrew from certain State Sponsored programs. Membership declines were also experienced in the Individual and Senior businesses, while enrollment in the National business grew by 101,000 members. Medical enrollment is expected to decline further because of the continuous rise in unemployment. Operating cash flow for the entire 2009 was more than $3.0 billion.

WellPoint expects to earn at least $6 a share in 2010. The Zacks Consensus Estimate for 2010 is $6.10. Currently, we are Neutral on WellPoint shares.

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NRG Energy, Inc. Added to the S&P 500 Index

NRG Energy, Inc.’s common stock was added to the Standard and Poor’s 500 Index after the market close today. The S&P 500, a market-value-weighted index, is the world’s most followed stock market measure and is seen as the benchmark standard to measure overall U.S. equity market performance.

“We are honored to be grouped among the most-widely held companies in leading industries across the country,’’ David Crane, President and Chief Executive Officer, said. “Our membership in the world-renowned S&P 500 Index is a testament to all of the great work performed by NRG’s employees and provides added momentum to our commitment to maximize shareholder value.’’

NRG also will be added to the S&P 500 GICS (Global Industry Classification Standard) Independent Power Producers & Energy Traders Sub-Industry index.

About NRG

NRG Energy, Inc., a Fortune 500 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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NRG Might Exit Nuclear Project

NRG Energy Inc. said it might be forced to take a $400 million charge and pull the plug on its nuclear-development efforts in Texas if it is unable to settle a dispute with its partner, a city-owned utility company in San Antonio.

The disclosure came prior to a state-court ruling Friday that advised NRG and CPS Energy to resume negotiations surrounding CPS's desire to withdraw from efforts to build two nuclear reactors at a South Texas site, near Bay City.

NRG Chief Executive David Crane, in a call with investors, said he spent last week in San Antonio trying to reach a settlement but the parties remain far apart. CPS has sued NRG, alleging unfair dealings and seeking $32 billion.

The rift between the parties underscores the political risks that remain part of nuclear-development efforts. Mr. Crane, in an interview Friday, said it was "ironic'' that his project is stumbling based on an "internecine squabble'' between the city-owned utility and the San Antonio elected officials just as "national politics are aligning'' to back nuclear power.

CPS General Counsel Carolyn Shellman said the utility is trying to "chart a path...that is financially responsible." She added that she hopes the two sides "can work out a reasonable solution."

President Barack Obama, in his State of the Union address, gave his clearest statement of support yet for construction of a fleet of new reactors able to reduce power-sector emissions. On Monday, Mr. Obama's budget is expected to propose tripling federal loan guarantees for nuclear projects.

The Texas project has been regarded as a frontrunner, one of only four thus far to make the short list for federal loan guarantees. It was the only proposal with a reactor design supplied and previously built elsewhere by its vendor.

Mr. Crane said Friday he accepted full blame for the difficulty. He said he didn't understand that CPS had invested hundreds of millions of dollars in the project "without having received San Antonio city council approval.''

Support for the project faltered late last year when it became clear to elected officials that project costs could top $10 billion, apparently more than they understood from earlier estimates.

People familiar with the companies' negotiations said that the two sides now are trying to find a way to allow CPS to withdraw without jeopardizing a federal loan guarantee, without which the project wouldn't be economically viable.

The utility has invested $370 million in the project and believes it is entitled to far more in compensation.

Negotiations have focused on finding a way to fairly compensate CPS, avoid more political fallout and find a way to substitute new investors so the project remains viable.

Texas Judge Larry Noll on Friday upheld CPS's right to cease funding the project without directly forfeiting its equity interest. But he warned, in essence, that the city couldn't hold NRG hostage.

"If you want to be in the play, you have to pay or you can't stay,'' he told CPS. "You will eventually lose your equity share.'' He advised the partners to go back to the negotiating table "and resolve this controversy and move forward for the betterment of this project and for the citizens...''

CPS's Ms. Shellman said the utility's board "hasn't made a final decision" on how to proceed. But it "needed to know the legal risks of withdrawing."

The people familiar with the discussions said that NRG hopes to find a way to get CPS to surrender its interest to NRG and a third, smaller partner, Toshiba Corp., which then would be free to bring in additional equity investors. Tokyo Electric Power Co. has expressed an interest in investing, Mr. Crane said in his investor call Friday.

Mr. Crane said he would hesitate to proceed with CPS as an active participant since "we would have to be sure they couldn't walk out of the project six months or 12 months from now.''

He added that there was "a total absence of trust between the two parties.''

The San Antonio city council was poised to approve a $400 million bond issuance in late October but held back when new numbers came to light that indicated the nuclear project could cost more than it expected. Like most municipal utilities, CPS has an appointed board that reports to elected city officials, whose approval is needed for rate changes or bond issuances.

A political ruckus ensued that led to the resignation of the utility's interim general manager and deputy general counsel.

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The Home Depot opens new distribution center in Topeka

— This center will serve approximately 100 Home Deport retail stores throughout the Central Plains Region. The first outbound delivery will start Monday. This center has already created 200 jobs in office and warehouse positions. The Home Depot plans on building seven more distribution centers over the next few years at the site. State and city officials joined the general manager, Chad Sommer, in a unique board-cutting ceremony along with 200 employees.

City Council member Larry Wolgast says, "To see the excitement that's here, the new employees and the equipments coming in, it's just a tremendous economic boost for our community."

This center is part of a larger program to transform The Home Depot supply chain, making it easier for Home Depot stores to keep the right products in stock for their customers.

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Earnings preview: Cost cutting to help Gannett 4Q

Gannett Co., the largest U.S. newspaper publisher, is scheduled to report its fourth-quarter results before the stock market opens Monday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Gannett should book a healthy profit for the fourth quarter. Not because advertisers are flocking back to its newspapers, but because the company has spent the past year cutting expenses.

Most recently, the Gannett announced in December that its flagship title, USA Today, will cut its newsroom staff by 5 percent, eliminating 26 jobs. It is also cutting 11 positions at USA Weekend magazine, a weekly insert in other newspapers, and consolidating the rest of the staff with USA Today. The company's other newspapers cut 1,400 positions last summer, or about 3 percent of Gannett's work force.

The company's outlook should improve as well. While publishers are still seeing their revenue shrink, the pace is starting to ease up.

McClatchy Co., for instance, which owns The Miami Herald and 29 other dailies, said ad revenue fell 20.5 percent in the last three months of the year. That compares with a 28.1 percent decline in the third quarter.

Gannett signaled confidence in December that its earnings would match its projections. CEO and President Craig A. Dubow said the company is "comfortable" with the high end of its forecast, which calls for earnings of 48 cents to 62 cents per share.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters are betting the company can edge out an even better profit, predicting earnings of 63 cents per share, on average. That compares with earnings of 69 cents per share a year ago, but that profit was wiped out by impairment charges to account for the falling value of Gannett's newspapers and other assets on its books.

ANALYST TAKE: Benchmark Co. analyst Edward Atorino upgraded Gannett's stock last month to "Buy" from "Hold," citing the company's cost cutting efforts.

"With solid franchises in small local newspaper markets in the U.S. and U.K., and ongoing efforts to expand content through new print and new media products, we believe Gannett is well positioned to weather the prolonged downturn in the newspaper publishing industry," he told investors in a note.

WHAT'S AHEAD: Gannett's TV stations should get a lift in ad revenue this year from political spending during the 2010 midterm elections. And its NBC affiliates will benefit from advertising during the Olympics.

STOCK PERFORMANCE: Gannett shares climbed almost 19 percent to end the quarter at $14.85.

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M&T Bank Set New 52-Week High Wednesday

M&T Bank Corp. reported fourth quarter net income available to common shareholders of $1.04 per share Wednesday morning, compared to $0.92 last year. Net operating income came in at $1.16 per share, compared to $1.00 last year.

M&T Bank climbed during the first half hour of trade Wednesday and advanced further late in the morning. Shares finished up by $2.99 at $77.69 on the highest volume in over 7 months. The stock has been gaining ground for the past 2 weeks and set a new high for the year.

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Union Pacific begins to recall railcars

Union Pacific Railroad this week began pulling mothballed railcars out of storage in Wallowa County as its business picks up.

Some 150 cars were moved off Wallowa Union Railroad tracks this week and another 75 have been ordered by UP for next week, Mark Davidson, Union County commissioner and the railroad's general manager, said Friday, Jan. 29.

The removed cars were among those that UP has been paying WURR to store since 2009 because of the economic downturn. Another 72 had been expected to be delivered for storage soon, bringing the total to the 1,980 called for in the $2.1 million contract with UP that ends in 2012.

Davidson said the reversal was unexpected.

Just a week earlier, Davidson had said UP told him its business was improving but wouldn't need the centerbeam flatcars stored here. They are used primarily to transport lumber and other building products.

"I have a bit of a concern," Davidson said, "but there's no immediate problem." UP pays to lease the 30-mile stretch of track used for the railcar storage, and pays the same monthly payment no matter how many or how few cars are in storage, he said.

But if UP finds enough business to justify putting all the cars back in service, it can cancel the contract with six months notice, Davidson said.

The railroad is using the UP income to make its payments to the state on the loan it received to purchase the rail line from Elgin to Joseph when it was about to be abandoned and torn up in the 1990s.

The UP revenue had come as a relief to the railroad, but the miles of stored cars had caused community debate in a county known for its majestic scenery.

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Wesco Financial Corporation Declares Cash Dividend

Wesco Financial Corporation’s Board of Directors declared a regular quarterly cash dividend of $0.41 per share payable March 4, 2010 to shareholders of record at the close of business on February 4, 2010.

This is an increase of $0.015 per share over the regular quarterly cash dividend of $0.395 per share paid in 2009.


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Eaton Corp. 4th-quarter net up 28%, sales off 10%

Eaton Corp., the Cleveland manufacturer with interests including electrical parts, hydraulic systems, and vehicle power trains, reported fourth-quarter net income rose 28% on 10% lower sales. Earnings reached $212 million from $165 million in the year-earlier period. Earnings attributable to holders reached $211 million, or $1.25 a share, from $163 million, or 98 cents, in the year-earlier period. Sales fell to $3.13 billion from $3.49 billion. A survey of analysts by FactSet Research produced a consensus estimate of $1.23 a share of profit on $3.05 billion of sales.

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