The National Association of Realtors says sales of existing homes rose three percent in January, marking the biggest improvement in two years. Buyers may have been lured by falling prices. The trade group says median home prices fell for a sixth straight month, off more than three percent from a year ago. The median price of a previously-owned home sold in January dropped to more than $210,000. The median is the point where half sold for more, and half sold for less. Regionally, sales posted the biggest gain in the west, up 5.6 percent. The weakest regional showing was in the northeast, which was unchanged in January.
The government is reporting that orders for big ticket manufactured goods fell in January by the largest amount in three months, reflecting weakness in demand for commercial aircraft. The Commerce Department says orders were down 7.8 percent. It is a larger drop than Wall Street had expected. The decline was led by an 18 percent plunge in transportation orders, which tend to be volatile.
The Conference Board's measure of consumer sentiment surged to a five-and-a-half year high in February. The group's Consumer Confidence Index rose more than two points to 112.5. It's a better-than-expected showing. Lynn Franco, the director of the group's Consumer Research Center, says the index reflects improving business conditions and feelings about the job market. Franco says the pace of economic growth may have gained some momentum.
For the third consecutive quarter, Texas business leaders are scaling back their expectation for the state's economy, according to the Compass Bank Texas Business Leaders Confidence Index. The survey registered a slight decline from the previous quarter, with an overall reading of 53.8—its lowest point since the first quarter of 2003. Panelists still expect moderate growth to continue, with expectations in sales registering an increase. Respondents expect the national economic picture to weaken in the coming quarter. Slowdowns in housing starts and weakening home prices are cited. The BLCI is compiled by Compass Bank and university partners at the IC? at the University of Texas at Austin, the Leeds School of Business at the University of Colorado, the University of Arizona's Eller College of Management and the Center for business and Economic Research at the University of Alabama.
Ground has been broken for Houston Pavilions in downtown Houston. The $170 million four-block shopping, restaurant, entertainment and office development will have 360,000 square feet of retail space and an office tower. The Pavilions will be built on three surface parking lots bounded by Dallas, Polk, Main and Caroline Streets. Developers have been awarded an $8.8 million development grant from the city of Houston and $5.5 million from Harris County.
San Antonio-based Valero Energy expects to restart its McKee refinery in Sunray in early April, according to Dow Jones Newswire, at about half of its capacity. The refinery was shut and evacuated following a fire in a propane de-asphalting unit on February 16th. The steam system is expected to be restarted this week. The exact cause of the fire is still unknown, although outside investigators say a mechanical failure led to the release of propane from a pipe serving the de-asphalting unit.
Leaders of one of the state's poorest cities were faced with a costly choice after summer flooding. El Paso officials could fix drainage problems in three hard-hit neighborhoods--or buy more than 90 homes and businesses. El Paso authorities opted to purchase the swamped properties with $11 million set aside to buy and eventually raze the troubled parcels. The plan also allows the city to give homeowners extra money to move and buy more expensive houses. El Paso isn't alone in its efforts to help displaced homeowners. Officials in Harris County have long included relocation money in buyouts of flooded homes in the Houston area. But Harris County is a more populous and wealthy area and buyouts are largely funded with millions in federal grants. El Paso has applied for similar grants. City Manager Joyce Wilson says the project will go forward with or without federal help. The relocation money is available to homeowners who were living in their properties during the 2006 floods. Absent landlords and business owners are being given the pre-flood value.
The parent of the Macy's department store chain is moving to change its name to Macy's. Federated Department Stores' board is asking shareholders to go along with a proposal for a name change. A vote will be held on May 18th during the company's annual meting. If approved, the new name will be Macy's Group, effective the beginning of June. Federated is also the parent of Bloomingdale's. In its statement, federated says about 90 percent of sales involve the Macy's brand. Federated Chairman and CEO Terry Lundgren says Bloomingdale's ''is and will remain a very important part of the company.''
The investors buying TXU say they can finance the biggest private takeover ever, cut electricity rates, cancel new power plants--and still make money. Kohlberg Kravis Roberts and Company and Texas Pacific Group are the two main investors buying TXU. Company directors agreed to a $32 billion sale. The investors will assume more than $12 billion in debt. The investors' optimism is fueled by TXU's position as the largest electricity producer in a big state that is expected to keep growing quickly. They also believe that as private-equity firms, they can be patient. Texas Pacific partner Michael MacDougall says "we are investing heavily, but we are also redirecting the company. We think it will pay off in the long run for all the stakeholders in Texas.''
TXU reports its fourth-quarter profit rose 33 percent. The increase came despite weak revenue that Dallas-based TXU blamed on mild winter weather and lost customers. It could be one of TXU's last earnings reports as a publicly traded utility. TXU announced it's agreed to be acquired for about $32 billion in the largest private buyout ever. Shareholders and federal regulators would have to approve the sale. TXU earned $475 million in the last quarter. That compares with net income of $356 million one year earlier. For all of 2006, TXU earned $2.55 billion, compared to net income of $1.71 billion in 2005.
Reliant Energy reports a fourth-quarter net loss of $53.7 million on revenue of $2.3 billion. That compares to a net loss of $134 million on revenue of $2.6 billion during the same period in 2005. For the full year, the Houston-based electricity provider posted a net loss of $327.8 million on revenue of $10.9 billion. That compares to a net loss of $330.5 million on revenue of $9.7 billion in 2005.
Power provider Dynegy reports it swung to a $58 million loss in the fourth quarter. Houston-based Dynegy says revenue fell and it absorbed costs related to a financial restructuring as it prepares for a previously-disclosed acquisition. That compared with a profit of $293 million one year ago--when income from discontinued operations lifted results. Sales fell 36 percent. Dynegy also says its $4.1 billion acquisition of rival L.S. Power Group is on track to be completed by the end of March.
El Paso Corporation posted a slightly wider fourth-quarter loss. Houston-based El Paso says costs related to the sale of ANR pipeline capacity offset gains in its core pipeline and exploration businesses. The nation's largest natural gas pipeline company says losses after paying preferred dividends were $175 million. That compares to a loss of $172 million during the same period in 2005. Per-share results in the 2005 period are based on about 40 million fewer shares outstanding. Revenue rose 12 percent.
The online dating service Match.com has decided to look overseas for some new corporate love interests. The company announced that it has finalized acquisitions of two foreign Internet-based services--the online dating site Netclub in France and the Edodo social networking site in China. Financial terms weren't disclosed. Match.com's CEO Jim Safka says that the deals mark a shift in the Dallas-based company's growth strategy, which for years has been based on existing subscriber growth and premium features instead of through acquisitions. Match.com already has Web sites in more than 35 countries and in 15 languages. But Safka says the Edodo deal was particularly lucrative because it gives Match.com its first foothold in China. Match.com was established a decade ago and now has about 15 million users. The addition of Edodo and Netclub would add more than four million subscribers.
Hospital operator Tenet Healthcare says its fourth-quarter loss widened on impairment and restructuring charges. The Dallas-based company reported a net loss of $386 million dollars. That compares to year-ago net income of $286 million. For the full year, Tenet posted lost $803 million. Tenet, which operates 63 hospitals in 12 states, has been selling facilities as part of a restructuring. They've sold six hospitals--three in Philadelphia, two in Los Angeles and one in New Orleans. Tenet in June agreed to a $900 million settlement to end government investigations that it over-billed Medicare for the most costly cases and made illegal kickbacks to doctors. The settlement did not include a determination that Tenet broke the law.
Electronics retailer RadioShack reports its fourth-quarter profit climbed by 64 percent. Fort Worth-based RadioShack had lower costs despite a drop in revenue. Earnings grew to $84.5 million in the three months ending December 31st. That compares to year-ago net income of $51.2 million. RadioShack says a drop in same-store sales was primarily due to lower sales in postpaid wireless and personal electronics.
Movie rental company Blockbuster announced its fourth-quarter earnings declined 28 percent on increased operating costs. Dallas-based Blockbuster says its quarterly net income dropped to $10 million. That compares to year-ago net income of $18 million. Revenue edged up one percent. Blockbuster Chairman John Antioco says the company delivered four consecutive quarters of positive same-store domestic movie rental revenues. He says Blockbuster also reduced operating costs, increased its online subscriber base and improved profitability and cash flow. For the full year, Blockbuster profits hit $54.7 million per share, compared with a 2005 loss of $588.1 million.
Harrah's Entertainment reports a fourth-quarter profit compared to a year-ago loss that included hurricane-related costs. The company is being purchased by Texas Pacific Group and Apollo Management for $17.1 billion. Harrah's had net income of $47.6 million for the three months that ended December 31st. That compares with a loss of $142.2 million during the same period a year ago. However, adjusted earnings from continuing operations dropped to $85.3 million. Hurricanes Katrina and Rita hit the Gulf Coast in 2005.
Continental Airlines placed first in Latin Trade magazine's "Best of Latin America" annual readers' poll. Results of a two-month online survey are published in the February issue, with Continental ranking first in overall results of the nine airlines making the list. The Houston-based air carrier scored highest in food/beverages, frequent-flier programs and ticketing/boarding. Continental serves 76 Latin American destinations in 23 countries.