Continental Airlines celebrates third-quarter profit, despite jet fuel costs and hurricanes…Former Dynegy and El Paso traders face spring trial on bogus trade data charges…Downtown prepares for Astros viewing party…
Continental Airlines was happy to report a profit in the third quarter, despite the rising cost of jet fuel and hurricane interruptions. Chairman and CEO Larry Kellner had words of praise for Continental employees.
Executive Vice President and CFO Jeff Misner also credits $1.1 billion in cost-cutting since 2002, as well as more than $400 million in savings in pay and benefit cuts taken by employees.
Continental President Jeff Smisek also attributes the improved income to revenue improvements.
Continental announced the pricing of a public offering of 18 million shares of stock at $11.35 per share.
The parent of American Airlines today reports losing $153 million in the third quarter. Fort Worth-based AMR suffered the loss, despite a 15 percent rise in revenue. The nation’s largest carrier was hit by rising jet fuel prices and tough competition from low-cost carriers. AMR also says it expects to post a “significant” loss in the fourth quarter. The company lost 93 cents per share in the July-through-September period. That compares to a year-ago net loss of $214 million. Chairman Gerard Arpey says it’s disappointing to swing to a loss after AMR posting its first profit since 2000 in the April-through-June quarter.
Former traders for Dynegy and El Paso Corporation go to trial next spring on charges they reported bogus trade data used to calculate natural gas index prices. Natural gas price indexes are used to price billions of dollars in transactions involving natural gas and electricity in physical and financial markets each year. But U. S. District Judge Nancy Atlas of Houston today held off on setting trial dates for former Dynegy trader Michelle Valencia and ex-El Paso trader Greg Singleton. First, she wants prosecutors and defense attorneys to confer on the voluminous documents changing hands as part of trial preparations. The two are charged with conspiracy, wire fraud and reporting fake trades to industry publications on various dates in 2000 and 2001. They were initially indicted in November, and charges were added in an expanded indictment two months ago. Both have pleaded innocent.
Royal Bank of Canada says it’ll take a fourth-quarter pretax charge of $500 million to account for the impact of Enron-related litigation. It joins several other major banks that have taken a hit on their books over lawsuits filed in the wake of the Houston-based energy company’s 2001 collapse. The Royal is a defendant in a number of pending Enron-related actions, including a securities class-action lawsuit in a federal court in Texas. Canada’s largest bank says that’ll have an after-tax effect of $255 million. The Royal says it would take the charge on its latest quarter ending October 31st.
With the Astros playing in St. Louis, Houstonians can once again watch the National League Championship Series with other fans at the viewing party along Main Street this evening. The Downtown Entertainment District has again arranged for the pennant playoff game to be projected on to the side of the Binz building at the corner of Main Street & Prairie. Main Street between Rusk and Congress will be closed to traffic, with a designated viewing area along Main Street from Texas to Preston. There are additional street closures on Prairie Street between Fannin and Travis. Parking is available at Market Square Garage on Milam and the Chase Garage on Travis.
Lyondell Chemical says it is permanently ending operations at its Lake Charles, Louisiana facility because of damages and higher energy costs from Hurricane Rita. The Houston-based company says the 280 employees will be offered redeployment opportunities or severance benefits. Lyondell Chemical had indefinitely suspended production at the plant because of the storms. The plant produced a chemical used to produce resins for flexible foam applications, including consumer goods, coatings, sealants, adhesives and packaging.
Some offshore oil platforms were destroyed, refineries were flooded and gas stations were sporadically out of fuel during recent hurricanes. Katrina and Rita created headaches for energy companies. But the storms ultimately benefited the companies because, as supplies tightened, prices for gasoline, diesel and jet-fuel soared. Exactly how much money was made will become clearer next week, when the industry begins to detail its third quarter performance. Some estimates by analysts have been compiled by Thomas Financial. Those indicate Exxon Mobil, Chevron, BP, ConocoPhillips and Royal Dutch Shell are expected to report about a 46 percent increase in their combined third-quarter profits. The Associated Press reports independent oil and gas producers, as well as independent refiners, are also expected to report double-digit profit increases. John Felmy is chief economist for the American Petroleum Institute. Felmy says they’re also selling record amounts of product and have been cutting costs through consolidations that further bolster the bottom lines.
A Senate committee has voted in favor of oil drilling in an Alaska wildlife refuge. And it did so in a way that will keep opponents from filibustering to block the proposal. The Senate Energy Committee voted in favor of the idea, 13-to-9. It calls for the Interior Department to put up for bid by October 2010 two oil leases in the coastal plain of the Arctic National Wildlife Refuge. By making the issue part of a complex budget reconciliation process, supporters will be able to keep opponents from resorting to a filibuster. Still, it’s uncertain whether the broader budget measure will actually be enacted by Congress. Environmentalists argue that drilling would harm wildlife.
A spokeswoman for Alaska’s Environmental Protection Agency says that federal regulators are investigating the alleged dumping of thousands of gallons of tainted mud by a Texas drilling company into the Beaufort Sea on Alaska’s Northern Coast. Oil industry critic Chuck Hamel of Alexandria, Virginia says the U. S. Environmental Protection Agency is investigating whether workers from Pioneer Natural Resources of Irving dumped the contaminated mud through ice fissures on Oooguruk Island in March 2003. Pioneer officials told the Wall Street Journal they were not aware of an EPA investigation. The company says the spill was an accident, and was properly contained and cleaned.
Entergy Corporation says it incurred damage from Hurricanes Katrina and Rita totaling $1.1 billion to $1.4 billion. The New Orleans-based utility operator estimates Katrina-related damages alone range from $700 million to $850 million. The company says 123,000 customers that suffered heavy property damage will be without service–and out of the company’s revenue stream–for an undetermined time. Entergy said the increased earnings would be due to a hotter-than-normal summer, lower operation and maintenance expenses, and the recent impact of a share buyback program.
The U. S. Department of Agriculture says Hurricane Rita cost farmers at least $195 million in crop and livestock losses. The USDA says that pushes the total ag-related damages for Rita and Hurricane Katrina past $1 billion. The department released a preliminary assessment of agricultural damage from Rita, which came ashore September 24th near Sabine Pass. Katrina slammed the New Orleans area and other parts of the Gulf of Mexico in late August. Analysts cautioned that damage information is changing daily. The estimates don’t include long-term losses, such as those from buildings, fences and machinery. Estimates of losses from Hurricane Katrina, released last month, placed damage at $882 million.
The Greater Houston Convention and Visitors Bureau is back with a full slate of conventions, trade shows and events through the end of the year, following cancellations and postponements from housing Hurricane Katrina evacuees. According to the Bureau’s Jordy Tollett, more than 175,000 attendees will spend an estimated $170.5 million in Houston during these two months. Conventions are set for the Society of Exploration Geophysicists, the Family, Career and Community Leaders of America and the Turbomachinery Laboratory’s 34th Turbomachinery Symposium.
The Port of Houston’s first Coffee and Cocoa Symposium is set for Thursday at the Pasadena Convention Center. The symposium’s theme is “Java and Jobs: Creating Economic Stimulus in the Region,” and the day-long event focuses on business development opportunities within Houston’s coffee and cocoa supply chain, from shipping, warehouse storage and distribution, to roasting, packaging and retail marketing.
The Labor Department is providing $13.2 million in job training grants to eight community colleges in Texas. The federal funding was announced today by U. S. Senator John Cornyn. The grants will used to train people for jobs in the health care, energy, construction and advanced manufacturing industries. The money will be shared by: Alamo Community College District, Amarillo College, College of the Mainland in Texas City, Midland College, North Central Texas College, Southwest Texas Junior College, Texas State Technical College and Victoria County Junior College.
Austin-based Santanna Energy Services has filed for Chapter 11 bankruptcy court protection. A company statement issued yesterday says Santanna will continue to “operate normally and without interruption,” despite the bankruptcy petition filed in Austin last Thursday. Santanna blames its bankruptcy filing on a “crisis” arising from skyrocketing natural gas prices. On October 13th, the Illinois Attorney General’s Office filed a consumer fraud lawsuit in state court against Santanna–which markets natural gas to about 35,000 Chicago-area customers. The state alleges Santanna abandoned contracts to deliver gas to about 15,000 Northern Illinois customers at fixed prices.
Texas has issued an air permit for Panda Energy Group to build a 100 million gallon biomass-fueled ethanol plant east of Hereford. Dallas-based Panda says the Texas Commission on Environmental Quality had approved the permit for the plant. The ethanol unit will be built on land near the municipal wastewater treatment plant. The plant expects to use about 600,000 gallons of treated wastewater daily. Panda says the Hereford plant is the first ethanol project in the state to receive an air permit under new review procedures. The Hereford Brand reports the company has agreements with 18 feedlots that will supply manure for fueling the plant. It’s negotiating with Hereford to purchase water and with Xcel Energy for electricity, the Brand reported. The ethanol plant is expected to employ about 60 people.
The fight over a government contract in North Carolina reached court today with two Texas companies wrangling over the $171 million deal. Plano-based Electronic Data Systems for 27 years held the contract to process more than 60 million Medicaid claims annually. EDS appealed to a Wake County, North Carolina, Superior Court after it lost the contract last year to Dallas-based Affiliated Computer Services. EDS says the North Carolina Department of Health and Human Services let ACS promise something less than the agency initially wanted and what the standards required. Affiliated Computer contends it won the five-year contract because it had the best offer. ACS has been working on a computing system for 18 months and aims to take over the job in mid-2006.
Second Baptist Church plans an $86.7 million expansion that includes leasing theaters for church services and buying a shopping center. Church members plan to vote this month on a plan that includes $5 million to develop four theater spaces to establish congregations in Cypress, Willowbrook, Pearland and the Richmond/Rosenberg area early next year. Senior Associate Pastor Gary Moore says the theater plan is part of the church’s national outreach program. The plan also includes $25 million to buy a six-acre shopping center for Bible study classes and $9 million to develop an HDTV broadcasting system.
A CD recorded at a live performance in Houston last year has become the first commercial release from the Houston Symphony with Music Director Hans Graf. Koch International Classics has released the album, containing Stavinsky’s “Divertimento from La Baiser de la fee” (“The Fairy’s Kiss”), a retelling of Hans Christian Anderson’s fairy tale “The Ice Maiden.” The full ballet score of Bartok’s “The Wooden Prince” is also featured. Both tracks were recorded during concerts in September, 2004. KUHF senior recording engineer Brad Sayles helped produce the album.