Power distribution and natural gas pipeline firmAEI, led by a former Enron executive, has filed with federal regulators to gain a listing on the New York Stock Exchange. AEI started with the assets of a predecessor company called Prisma Energy International, which emerged from Enron. AEI has operations in 19 countries across Latin America, Europe and Asia. CEO James Hughes was with Enron Global Assets and general counsel of Enron International. He was Prisma’s president through 2004. Several other former Enron executives are in key AEI positions.
The Port of Houston Authority has chosen energy executive Alec Dreyer as its new executive director. Commissioners are expected to approve Dreyer’s appointment at their September 29th board meeting. Dreyer is a former CEO of Horizon Wind Energy and executive vice president of Dynegy’s generation division. Dreyer succeeds Tom Kornegay, who retired February 1st after 17 years as executive director and 37 years service with the port.
Marathon Oil shut an alkylation unit at its Texas City refinery yesterday after a leak that injured a contract worker, according to Bloomberg News. The Texas City Department of Emergency Management says that person was injured with flash burn from a very small leak of a gasoline-like substance. An alkylation unit produces an additive that is blended with motor and aviation fuel to raise octane.
Newspaper advertising sales shrank by another $2.8 billion in the second quarter, a 29 per cent decline from the same time last year. The numbers released by the Newspaper Association of America show the industry’s financial woes deepened in the April-June period. The latest decline left U.S. newspapers with ad sales of $6.8 billion in this year’s second quarter compared to $9.6 billion last year. The recession and advertising’s shift to the Internet have been eroding newspapers main source of income for the past three years, triggering thousands of layoffs and wage reductions. The second quarter’s advertising contraction was the worst yet. Newspaper advertising revenue sank by 28 per cent in the first quarter.
Consumer spending edged up in July with help from the popular cash for clunkers program, but household incomes, the fuel for future spending increases, were flat. The Commerce Department says consumer spending rose 0.2 per cent in July, matching economists’ expectations. Personal incomes were unchanged last month, a weaker showing than the expected 0.2 per cent gain. Consumer spending is the big question mark as the economy struggles to emerge from recession. Economists worry that households hurt by rising unemployment, weak income growth and depleted investments will not provide the support the economy needs to rebound to sustained growth. On Wall Street, stock futures maintained moderate gains after the news.
Official data shows business and consumer confidence in the 16-nation Euro Zone has increased again in August. Eurostat, the European Union’s statistics agency, said its measure of business sentiment rose to -2.21 points in August from -2.70 points the previous month. Improvements were particularly strong for production expectations and orders booked. The figure is still weak, however–“even when compared to the previous historical lows of 1993”–suggesting that industrial production remains subdued, Eurostat said. The wider economic sentiment indicator showed that its measure of consumer confidence also improved in August, to -22 points from -23 points in July. For the 27-nation European Union, consumer confidence likewise improved marginally, to -20 from -21.
Americans are having trouble keeping up with economic changes, according to a Zogby poll, and have seen their finances and quality of life decline since the start of the recession. Some 44 per cent say the economy is changing faster than they are able to change their habits. Only 12 per cent say they are better off than when the recession started. And 42 per cent report their quality of life has declined, with seven per cent saying it has improved. The rest have no change or are not sure. The lower the household income, the more respondents indicate trouble in keeping up.
Electronic coupons, arriving by cell phone, Twitter, e-mail and Facebook, are helping generate an old standby’s comeback and bringing in new, younger customers. The coupon-processing company Inmar says use of electronic discounts and coupons more than doubled in the first half of 2009 compared with the same period last year as overall coupon use rose 23 per cent. They now account for more than three per cent of all coupons used, up from roughly two per cent in 2008. Many shoppers used to reject coupons printed in newspapers and direct-mail booklets as passé or cumbersome. Coupon use had been declining since 1992 as consumers found less need for or some embarrassment in using them. But as the economy worsened, frugal became cool and their popularity grew.
The Federal Reserve says banks reduced their borrowing from an emergency lending program for the third straight week, a sign that some credit stresses are easing. The Fed says commercial banks averaged $30 billion in daily borrowing over the week that ended Wednesday. That’s down from $30.7 billion in the week ended August 19th. The identities of the financial institutions are not released. They pay just 0.50 per cent in interest for the emergency loans. The central bank did ramp up its activity in other areas. The Fed increased its holdings of mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae to $624.3 billion, from $607 billion the previous week.
Lockheed Martin Integrated Systems in Houston has gained a one-year, $33 million contract extension from NASA for cargo packing and delivery to and from the International Space Station. That brings the total contract value to $381 million. Subcontractors include Houston-area firms Bastion Technologies, LZ Technologies, MEI Technologies, Oceaneering Space Systems, Rothe Enterprises, Spacehab and United Space Alliance.
T. Boone Pickens and other panhandle water rights owners have filed briefs opposing a Texas Supreme Court review of a lower court’s ruling favorable to them. Pickens’ Mesa Water, the Canadian River Municipal Water Authority and the city of Amarillo have spent tens of millions of dollars to buy water rights for more than 700,000 acres. They believe water can be sold separately from land deals under the state’s rule of capture. The city of Del Rio on the Mexican border claims it can pump groundwater from land it purchased despite not owning the water rights. Del Rio wants the state’s high court to review an appeals court ruling denying the city access to the water.
An executive with General Motors says the company sees U.S. auto sales growing by two million next year. General Motors Vice President Brent Dewar says GM is projecting the U.S. market will end 2009 at 10.5 million vehicles sold and grow to 12.5 million next year as consumer confidence improves. He says August sales for the Chevrolet Brand were strong but there will be a payback in September. The government’s cash for clunkers program definitely pulled sales forward from later in the year. He says the program boosted sales for smaller cars. But he says new product sales such as the Chevrolet Camaro muscle car and Equinox crossover vehicle are continuing to be strong even after the program ended.
A top Ford executive says cash for clunkers helped spur the first industry-wide increase in auto sales in more than two years this month, the latest sign of recovery in the hobbled auto industry. Mark Fields, Ford’s president of the Americas, says annualized industry sales may have hit 13 million in August. He says Ford has already surpassed August sales last year with a weekend still to go. Automakers are scheduled to report monthly sales on Tuesday. The clunkers program is expected to offer a much-needed lift. Ford was among the program’s top gainers, with its Focus compact car and Escape crossovers among the top new vehicles purchased in exchange for trade-ins. The Transportation Department says the program spurred almost 700,000 sales at a cost of $2.88 billion.
The Greater Houston Partnership’s World Trade Soirée is set for Saturday evening at Hotel ZaZa on Main. The event is a networking opportunity for business leaders, government representatives and economic development allies.
Dell says its second-quarter profit fell 23 per cent as the personal computer industry’s slump dragged on this summer. The results were slightly better than Wall Street expected. The figures were released early, right before the market closed Thursday evening, and Dell stock jumped five per cent. Dell’s profit was $472 million in the three months ended July 31st. That compares with profit of $616 million in the year-ago period. Sales fell 22 per cent to $12.8 billion. Analysts expected $12.6 billion in sales.