A faster pace of business for the nation's services sector. The Institute for Supply Management says its index covering services rose a point in October to 55.8. Any reading above 50 indicates growth. The reading was stronger than expected. Economists generally expect growth to slow here in the final quarter of the year.
Hiring managers nationwide rate their staffs higher in quality than their consulting staffs, according to a Yoh survey. Yoh says there are several factors: companies are reluctant to fully invest in or integrate their consulting staff with permanent staff, leading to inefficient teams or a divided workforce. The outsourcing firm says many employers and staffing firms continue to view consulting talent not as a commodity.
Standard Chartered Bank is asking a bankruptcy court in New York that Enron pay an additional $2.7 million as part of a settlement. The British bank has already received $24.5 million. Standard Chartered Bank was part of a syndicate of banks that loaned money to Enron, now known as Enron Creditors Recovery Corporation. The bank says the agreement didn't apply to its claims against other entities that borrowed money—Enron North America, Enron Power Marketing and EPC Estate Services.
Citigroup is charting its future after the resignation of Chairman and CEO Charles Prince. The nation's largest bank is estimating additional losses of up to $11 billion. In the third quarter, it already took a hit of $6.5 billion in asset markdowns and other credit-related losses. It has revised down its results for that quarter by $166 million, after correcting the value of the company's exposure to complex instruments called collateralized debt obligations. Citigroup also revised its exposure to collateralized debt obligations, or CDOS, to $43 billion. Former Treasury Secretary Robert Rubin will be chairing the bank. Sir Win Bischoff, chairman of Citi Europe and a member of the Citi Management and Operating Committees, will serve as interim CEO.
Better weather is being credited with reducing the number of flight delays travelers had to deal with in September. The Transportation Department released figures showing the on-time arrival rate for the nation's 20 largest air carriers improved five and a-half percent from August. But the department also warns that the airline industry's on-time performance so far in 2007 remains the worst in 13 years. Through the first nine months of the year, more than 24 percent of all flights arrived late. And Americans making holiday travel plans should be aware: the National Air Traffic Controllers Association says there will be fewer fully trained air traffic controllers working this year. The union blames the decline on extended contract disputes and poor working conditions that are driving veteran controllers out of the business.
A subsidiary of McDermott International has been awarded a $400 million contract to supply generators and environmental equipment to the Prairie State Energy Campus in Lively Grove, Illinois, according to the Houston Business Journal. That's a coal plant near St. Louis. Houston-based Babcock & Wilcox will supply two identical 800-megawatt Spiral Wound Universal Pressure steam generators and other equipment. The units will go online by 2012.
A plan for private contractors to build and operate a toll road from Austin to Seguin would reward Texas for lowering the speed limit on I-35. The privatization contract for Texas 130 includes the option for the state to earn credit--though not payment--for pushing traffic to the tollway. That includes lowering I-35 speed limits. But the Texas Department of Transportation said the agency won't do that because speed limits are set by traffic engineering studies--and not by economic gain. The state in March signed the deal with a consortium including Cintra of Spain and Zachry Construction of San Antonio. Construction should start in two years, with opening set for 2012. TXDOT would pay Cintra-Zachry for lost profits if some state projects interfere with toll traffic over 50 years. But the companies would have to pay TXDOT more--for higher speed limits on the tollway.
Dell is announcing a $1.4 billion deal to buy data storage systems provider Equallogic. The Round Rock-based computer maker hopes to strengthen its position in the growing virtualization market. The sale was announced as New Hampshire-based Equallogic prepared for an initial public offering of stock. The deal is expected to close early next year. Equallogic Software lets a single computer function like several machines, which means companies can spend less on hardware and energy costs to run data centers. Research firm IDC estimates spending on so-called virtualization software and services will exceed $15 billion worldwide by 2011.
Google says it is developing a software package for wireless phones, but it will be months before consumers can see it. The Internet search leader wants to get more ads and services in front of people who aren't at a personal computer. The announcement caps months of speculation. The first phones carrying Google's so-called "software stack'' should be available in the second half of 2008. Google will work with cell phone manufacturers who have agreed to use its programs in their handsets. Consumers will have to buy a new phone to get the Google software because the bundle isn't intended for existing handsets. Google's system will be based on computer code that can be openly distributed among programmers. It hopes that will encourage developers to create new applications and other software improvements that could spawn new uses for smart phones. The list of wireless carriers that have agreed to provide service for the Google-powered phone in the U.S. include Sprint Nextel and T-Mobile.
A new plan has emerged to purchase bankrupt Interstate Bakeries. A plan filed in bankruptcy court in Kansas City is from supermarket billionaire Ron Burkle's investment firm, Yucaipa. He would join Fort Worth-based Bimbo Bakeries USA and the Teamsters to buy IBC. The maker of Hostess Twinkies and Wonder Bread filed for bankruptcy protection in September 2004. It's already lined up financing from specialty lender Silver Point Finance for when it emerges from bankruptcy. But the Teamsters have fought that proposal, saying it would reduce worker benefits and cost hundreds of jobs. Interstate bakeries didn't immediately return a call for comment.
Geokinetics is moving to new corporate headquarters on CityWest Boulevard, according to the Houston Business Journal. The Houston seismic data services company is consolidating its corporate staff at One Riverway and on Old Katy Road.
Oklahoma City-based Chesapeake Energy Corporation is planning to buy 2,000 leasehold acres in north Texas from Western Production Company. Chesapeake officials say the company now has about 235,000 acres of leasehold in the gas-rich Barnett Shale. Chesapeake operates more than 2,700 drilling sites in the region.
Entergy says its third-quarter profit jumped 19 percent. The energy company also announced it plans to spin off its non-nuclear business. Net income rose to $461.2 million. That compares to year-ago earnings of $388.9 million. Entergy delivers electricity to 2.6 million utility customers in Arkansas, Louisiana, Mississippi and Texas. The New Orleans-based company plans to separate its non non-utility nuclear business and enter into a nuclear services joint venture with the spun-off entity. The company also said it's on track to grow earnings $1 per share per year.