Saudi Arabia's oil minister says his country supports OPEC's proposed oil production cut of a million barrels a day. Cartel ministers are meeting to discuss cutting output after prices have dropped sharply in recent weeks. Saudi backing is considered to be critical among analysts who have doubted two weeks of rumors that there was consensus for an output cut. Earlier, an OPEC official, who didn't want to be named, said there was "a consensus'' to cut output by a million barrels, but that no agreement had been reached "especially on the details of such a cut.'' A production cut would be the first by OPEC since December 2004, when oil traded slightly above $40 a barrel. Oil prices topped $78 a barrel in July. They've been trading around $60 lately.
The Monster Local Employment Index for Houston rose two points in September to 117—the third consecutive month of sustained growth in online recruitment activity. Houston's index has gained 21 points this year—the highest annual rate of increase among the 28 markets surveyed. Monster says solid population trends, the booming energy industry and manufacturing, transportation and technology expansion have contributed to the region's job market. Monster is a New York-based online recruitment services company.
The government says the number of Americans filing first-time claims for unemployment benefits dropped last week to the lowest in nearly three months. New claims fell by 10,000 to 299,000. The decline reported by the Labor Department is larger than expected. The less-volatile four-week moving average dipped to nearly 308,000, the lowest since late June. While employers have not boosted layoffs significantly, they have slowed hiring. For September, employers added 51,000 jobs, the smallest number in 11 months. At the same time, the unemployment rate fell slightly to 4.6 percent.
Wal-Mart says its program selling some generic drugs for $4 a prescription is being offered in another 14 states. The announcement comes just two weeks after rolling out the low-cost program, involving hundreds of medications, in Florida. The expansion, which includes Texas and New York, is coming more quickly than the world's largest retailer said it intended, citing strong demand from consumers. Arkansas-based Wal-Mart says the expansion involves more than 1,200 stores. News conferences were held today in the states where the program is expanding. They are in Alaska, Arkansas, Arizona, Delaware, Illinois, Indiana, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Texas and Vermont. Rival Walgreen says it won't match the program.
In these days of high oil and gas price volatility, energy managers and commercial users are more sophisticated in cutting costs and reducing their exposure to market price risk. At the fourth annual SolArc ASCENT conference at the Hilton Americas-downtown, attendees heard from Jean Beach of Tyson Foods.
"Certainly the volatility in the energy markets and the volatility in price movement that we've been seeing across all commodities is impacting margins for commercials like Tyson Foods. The initial thrust for risk management around our exposure was really with a focus on grains, and then on meats and lastly on energy. But, you know, the evolving biofuel relationship between the grain markets relative to what's happening in energy has kind of quickened the pace to make us focus on all three different components. These trade risk capture systems are not just for investment banks or for hedge funds or for energy merchants."
More companies outside the energy industry are adopting methods pioneered by commodity trading and marketing companies, including agricultural processors, airlines and freight transportation companies.
Sentencing for former Enron managing director Michael Kopper has been rescheduled for November 17th. Kopper, who worked closely with former chief financial Officer Andy Fastow, was the first ex-Enron executive to reach a plea deal with the government. He pleaded to two counts of conspiracy, and faces a maximum penalty of 15 years.
Continental Airlines said today its third-quarter profit nearly quadrupled over last year's quarter. The Houston-based carrier credits strong traffic and the sale of a stake in a Panamanian carrier. Continental says earnings for the July-through-September quarter came in at $237 million. That included a one-time $92 million gain from the sale of its stake in Copa Airlines. Minus that gain and $1 million in special charges, Continental says it would have earned $146 million. That beats the $1.22 per share in earnings expected by analysts surveyed by Thomson Financial. Revenue rose 17 percent to $3.52 billion. That's slightly below analysts' expectation of $3.54 billion.
Southwest Airlines says its third-quarter profit fell sharply compared to a year ago. The low-cost carrier cites rising fuel costs and weaker air travel after a terror threat in August. Southwest reports earnings of $48 million in the July-September quarter compared to $210 million a year earlier. Excluding one-time items including a write-down in value of fuel price-hedging contracts, the Dallas-based airline says it would have earned $154 million. Chief executive Gary Kelly says Southwest lost more than $40 million in revenue from August and September because of a downturn in travel after authorities in London said they broke up a terror threat.
Belo Corporation said today its third-quarter profit dropped 13 percent. The Dallas-based newspaper and television station owner blames charges as revenue edged up slightly amid weak results from its newspapers. Belo says its net income fell to $19.2 million. That includes $5.4 million dollars in severance charges at the Dallas Morning News. Another charge was $10 million in transition costs associated with technology initiatives. Another was for $2.9 million to cover stock-based compensation costs. Revenues rose .8 percent to $376.4 million missing analysts' estimates of $386.3 million. Television group revenue rose 6.9 percent, while newspaper group revenue fell 4.2 percent.