Federal Reserve releases positive snapshot of business conditions…Producer Price Index rises slightly…Southwest and American Airlines report profits…
The Federal Reserve has released a mostly positive snapshot of business conditions. In its Beige Book report, the central bank says most parts of the country are enjoying moderate growth, with businesses boosting hiring and workers getting bigger paychecks. On the inflation front, the Fed finds that overall prices increased moderately. The Fed regions of Atlanta, Chicago, Minneapolis and Kansas City describe inflation pressures as “easing or moderating.” Fed policymakers have said they’ll be watching labor costs to make sure they don’t spark unwanted inflation. The information from the report will figure into discussions at the Fed’s first interest-rate setting meeting of the year—set for the end of this month.
The Federal Reserve says industrial production surged four-tenths of one percent last month. That follows two months of modest declines. The increase reflects higher factory output. That helped to offset a 2.6-percent drop in utility output, a decline that reflected the unseasonably mild weather in December.
The Labor Department says the news on wholesale-level inflation was improving last month. The Producer Price Index, measuring cost pressures before reaching the consumer, rose nine-tenths of one percent. That’s down sharply from November’s two-percent increase, which had been the biggest one-month surge in more than three decades. At the same time, the core rate, which excludes food and energy, was up two-tenths of one percent in December. Analysts had been looking for a one-tenth gain. For all of last year, wholesale prices rose just 1.1 percent. That was down sharply from the more than five-percent rise in 2005. The difference was mostly because of lower energy costs. The Consumer Price Index is due to be released Thursday morning.
Dickinson-based Hillman Shrimp and Oyster, its president and two employees have pleaded guilty to charges associated with the hiring of illegal aliens. The company is a supplier of Gulf Coast oysters and shrimp, with seafood processing facilities in Dickinson and Port Lavaca. The indictment charges the company with fraudulently obtaining non-agricultural H2-B visas. The fraud allegedly occurred when prospective employees presented false driver’s licenses, identification cards and social security numbers.
Southwest Airlines announced its fourth-quarter profit fell 19 percent from a year ago. The Dallas-based low-fare carrier blames increased fuel prices and security costs. But it also says its operating profit rose on strong revenue growth to meet Wall Street expectations. Net income fell to $57 million. Excluding special items, the airline posted profit of $96 million–up 18.5 percent from last year. Revenue grew 15 percent to $2.28 billion. The results were in line with estimates from analysts surveyed by Thomson Financial. Southwest said the outlook for this year is “favorable.” It predicts it’ll exceed its 15 percent growth target for operating earnings per share.
American Airlines parent AMR Corporation reported its first annual profit since before the 2001 terrorist attacks. The Fort Worth-based company also said it swung to a fourth-quarter profit with the help of a cheaper fuel bill. AMR is also the parent of regional carrier American Eagle. For the full year, AMR reported earnings of $231 million. That’s compared with a prior-year loss of $857 million. It also reported a fourth-quarter profit of $17 million dollars. That’s compared with a $600 million loss for the previous year’s quarter. Revenue grew by 4.4 percent to $5.4 billion. The company had warned investors last month that higher maintenance expenses and weather-related flight cancellations in November and December would hurt quarterly results. But the company reported its aircraft fuel expenses fell in the fourth quarter. It says overall operating expenses fell by six percent.
A federal jury in Boston awarded $400,000 to a Miami man who sued American Airlines claiming racial discrimination. John Cerqueira was removed from a flight before taking off from Logan Airport in December 2003. The 39-year-old computer consultant was born in Lisbon, Portugal. He grew up in Fall River and is a naturalized U.S. citizen. Two Israeli men seated next to Cerqueira were also removed. Cerqueira says he was taken off simply because he looked similar to the Israeli men. State police officers interviewed all three, and cleared them to travel. The U.S. District Court jury awarded Cerqueira $130,000 in compensatory damages and $270,000 in punitive damages. Fort Worth-based American says it may appeal.
Continental Airlines plans to begin service to Athens, Greece, starting in June. The Houston-based air carrier says it will launch daily nonstop flights from its New York-area hub in Newark, pending government approval. Greece will be the 16th country in Continental’s trans-Atlantic network.
AutumnGrove Cottage plans to build a 16-bed Alzheimer’s and dementia care residence in The Woodlands, according to the Houston Business Journal. The one-story cottage in the Villages of Alden Bridge Drive is being designed to have the look and feel of a residence rather than a medical facility. This is the fourth AutumnGrove Cottage in the Houston area.
Plano-based Home Health Services of Texas has opened a Houston office, according to the Houston Business Journal–its seventh satellite office. A San Antonio office is planned in 2008. The group primarily serves Medicare and TriCare patients, collaborating with pharmacy-based infusion home therapy home health care companies to provide nursing services.
The 7-11 convenience store chain has signed multiyear sponsorship deals with 18 pro sports organizations and venues–including some in football, baseball and car racing. Financial terms aren’t being disclosed. The Dallas-based chain says its deal with the Dallas cowboys would include appearances at stores by players, cheerleaders and the “Cowboys on Tour” vehicle. It also say it’ll conduct a dice-rolling contest during Dallas Mavericks’ games and sponsor the Mavericks’ street team. 7-11 also has made deals with the New York Yankees, Chicago Cubs, Washington Redskins, Chicago Bears, New England Patriots and other teams.
A Texas Indian tribe wants to build a casino on ten acres in southern New Mexico to replace one that the state of Texas shut down four years ago. The Albuquerque Journal reports that the Tiguas’ plan is at least the third off-reservation gambling proposal to emerge in New Mexico. A lobbyist for Sunland Park Race Track and Casino argues that the plan by the Tigua tribe sets the stage for having “a casino on every corner.” The Tiguas’ Speaking Rock Casino was earning about $60 million annually when it was shut down in 2002. A federal court agreed with then-Texas Attorney General John Cornyn that the casino violated Texas limited gambling laws. Tribal Governor Art Senclair confirms the El Paso tribe has asked the Bureau of Indian Affairs to approve placing the ten acres in New Mexico in trust for the tribe.