Schlumberger says the worst effects of the economic slump may be over, even though the company’s third-quarter profits dropped 48 per cent from a year earlier. The Houston-based oil services company, which helps drillers pull oil and gas from the ground, was hit hard this year as crude prices sagged and drilling companies idled half of their rigs in the U.S. Schlumberger reported net income of $787 million for the third quarter. Its rival Halliburton reported a 61 per cent drop in third-quarter profits last week. Schlumberger’s revenue fell 25 percent, to $5.43 billion, missing analyst estimates of $5.48 billion.
Home resales rose far more than expected last month to the highest level in more than two years as buyers scrambled to complete their purchases before a tax credit for first-time owners expires. The National Association of Realtors says sales rose 9.4 per cent to a seasonally adjusted annual rate of 5.57 million in September, from a downwardly revised pace of 5.1 million in August. Sales had been expected to rise to an annual pace of 5.35 million, according to economists surveyed by Thomson Reuters. The median sales price was $174,900, down 8.5 percent from a year earlier, but the smallest annual drop in 13 months.
Houston hotels continue seeing weaker occupancy rates, down 8.6 percentage points in August to 54.1 per cent compared to August 2008, according to the Greater Houston Partnership. PKF Consulting notes this is the lowest August occupancy since 1986, when it was at 47.5 per cent. Occupancy averaged 62.1 per cent in the first eight months of this year.
Auto insurance rates in Texas have declined, but InsuranceRates.com says the state is still one of the most expensive in which to buy insurance, according to the Houston Business Journal. Texas drivers now pay an average of $744 for a six-month policy—down 14 per cent since January. Male drivers in Texas pay an average of seven per cent more than female drivers. Texas drivers under 19 pay an average of $1,580 for a six-month policy, compared to $653 for drivers 75 or older.
While the Obama administration’s decision to cut the pay of top executives at companies that have accepted government bailouts may prove popular with many Americans, it is raising concerns among industry observers of a possible brain drain from those companies. The 175 executives targeted by “Pay Czar” Kenneth Feinberg are considered among the most talented and productive. As one expert on executive compensation puts it: “these people are considered the brains of the machine” who can pull a company through tough times. Recruiters say competitors not affected by the restrictions are likely to try to lure those executives and they will have reason to leave. That could prove devastating to companies the government spent so much money to save. Bank of America, one of the seven firms affected by the move, says its rivals are already using pay concerns to try to poach the bank’s top performers.
Federal Reserve Chairman Ben Bernanke is prodding Congress to enact legislation overhauling the nation’s financial regulatory system to prevent a repeat of the banking and credit debacles that had thrust the country into crisis. The Fed chief says: “with the financial turmoil abating, now is the time for policymakers to take action to reduce the probability and severity of any future crises.” He makes his comments in prepared remarks to a Fed conference in Chatham, Massachusetts.
Former Fed Chairman Paul Volcker is warning that the country faces a “considerable slog” in recovering from a deep recession. He says any economic gains will be too mild for a while to make a big dent in stubbornly high unemployment rates. Speaking in Kentucky, Volcker says it took years to get us into this situation, and it will take years to get us out. Volcker bemoans some of the economic trends leading up to the downturn. He says the savings rate “practically disappeared,” and the financial industry appeared to become adept “at turning lousy credit into good credit.”
Hundreds of recent law school graduates have been forced by the recession to take a detour on their way to the nation’s top firms. They’re spending up to a year helping out nonprofits, public defenders and other public interest law offices for as little as a third of the salary they’d expected. From San Francisco to New York, high-powered firms that have seen a slowdown in business are postponing the start dates of new hires they recruited before the recession. Many are paying the “deferred associates” stipends to do public interest work. Cash-strapped nonprofits and government offices are benefiting from the free labor. The young lawyers and the firms that pay them say they get valuable training and hands-on experience.
rolling out magazine and Comerica Bank are presenting the 4th annual Female Success Factor Top 25 Women of Houston awards tonight at the Downtown Aquarium on Bagby.
The still-scuffling U.S. economy may keep some NBA teams from starting the season with a full, 15-player roster. A survey of all 30 franchises by the Associated Press found that nearly half the teams plan to start with 15 players. But others will carry the minimum 13, or leave one spot empty. Chief among the reasons is flexibility and no team said outright that their decision would be driven by the economy. But Dallas Mavericks owner Mark Cuban says times are tough and he expects many teams to carry fewer players. Final rosters are due to the NBA on Monday. The season begins Tuesday.
ALiverpool Football Club supporters’ group is planning a march ahead of Sunday’s Premier League match against Manchester United to protest against the way American businessmen George Gillett, Jr., and Tom Hicks are running the English soccer club. Local police say there will be an “appropriate level of security” ahead of the match, suggesting there will be an increase in the number of officers present. The march to Anfield is being organized by the Spirit of Shankly group. Gillett and Hicks have attracted the ire of fans since loading it with debt in their 2007 buyout.
The number of rigs actively exploring for oil and natural gas in the U.S. this week has risen by eight this week to 1,048. Houston-based Baker Hughes said that 725 rigs were exploring for natural gas and 312 for oil. Eleven were listed as miscellaneous. A year ago this week, the rig count had been 1,964. Texas gained four rigs. The rig count tally peaked at 4,530 in 1981 and was a record low of 488 in 1999.