Archive for January, 2011

Europe firms stop Egypt drilling, evacuate staff

Monday, January 31st, 2011 | Finance News

LONDON (Reuters) – Some big European energy companies have suspended drilling and evacuated staff in Egypt due to political unrest but gas production have not yet been affected, they said on Monday.

Egypt is one of the world's top 10 exporters of liquefied natural gas (LNG), and consumes a lot of its own output, but is not a big oil exporter.

Britain's BP, which produces a large share of Egypt's oil and gas, and Spain's Gas Natural, operator of the Damietta LNG plant, said they were evacuating some employees but that operations were unaffected.

Royal Dutch Shell planned to evacuate its international staff on Sunday, while Norway's Statoil also evacuated some staff and suspended drilling for more fuel.

"We have decided to stop the drilling operations for the moment to be on the safe side," a Statoil spokesman said, adding that the company had let some staff leave the country as the uprising against Egyptian President Hosni Mubarak's 30-year-rule intensified.

"They left during the weekend as a precautionary measure as the situation is unstable and we don't know how it is going to develop," he said.

Protesters intensified their campaign on Monday to force Mubarak to quit as world leaders struggled to find a solution to a crisis that has torn up the Middle East political map.

"The levels of unrest, particularly during the last three days, have rattled oil companies as well as global oil markets, as fears have started to rise over the Egyptian regime's stability," Samuel Ciszuk, senior Middle East analyst at IHS Energy, said.

Britain's BG Group -- which produces about a third of Egypt's gas and holds stakes in Egypt LNG (ELNG) plant -- has stopped drilling. But production from its West Delta Deep Marine offshore gas field -- a joint venture with Malaysia's Petronas -- and the LNG export plant continued as normal on Monday.

"Drilling activities have been temporarily suspended," a BG spokesman said.

"Gas production continues unaffected and LNG operations continue unaffected ... All our employees, contractors and their families are accounted for and safe."

A spokeswoman for Spain's Gas Natural, which operates the Damietta LNG export plant on the north coast, said it had started evacuating non-essential staff and their families.

(Reporting by Daniel Fineren and Karolin Schaps in London, Gwladys Fouche in Oslo, Jonathan Gleave and Martin Roberts in Madrid; writing by Daniel Fineren, editing by William Hardy)


Factory, spending data support strong growth tone

Monday, January 31st, 2011 | Finance News

WASHINGTON (Reuters) – A measure of factory activity in the U.S. Midwest rose to a 22-1/2 year high in January on strong orders and employment prospects, bolstering hopes the economy would stay on a solid growth path this year.

A second report on Monday showed consumer spending ended 2010 on a firmer footing, a trend that economists expected to continue as the labor market recovery gains traction.

The Institute for Supply Management-Chicago business barometer rose to 68.8 in January, the highest level since July 1988, from 66.8 in December. Economists had expected the index, which gives a first look at the manufacturing sector, to slip to 65.0.

A reading above 50 indicates expansion in the regional economy. The index was this month lifted by jump in measures for new orders and employment.

"The factory sector news is an important positive omen for the broader economy, because increased production will yield significant income generation, which in turn will fuel stronger household consumption," said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York.

In a separate report, the Commerce Department said spending increased 0.7 percent in December, advancing for a sixth straight month, after rising by 0.3 percent in November.

Economists had expected spending, which accounts for about 70 percent of U.S. economic activity, to increase 0.5 percent last month.

The spending figures were included in the government's fourth-quarter gross domestic product (GDP) report released on Friday, which showed the economy grew at a 3.2 percent pace on the back of robust consumer spending.

Spending in the fourth quarter grew at a brisk 4.4 percent pace, the fastest in more than four years. While economists see spending remaining strong this year, they expect the pace of growth to be less brisk than in the last three months of 2010.

"While we doubt that the pace seen in the fourth quarter will persist in 2011, further labor market recovery and a gradual rebound in labor income should underpin solid and sustained consumption growth," said Peter Newland, an economist at Barclays Capital in New York.

Spending in December came as incomes increased 0.4 percent and savings dropped to their lowest level since March. Incomes grew 0.4 percent in November and the increase last month was in line with economists' expectations. Savings fell to $614.1 billion from $634.4 billion in November.

The report also showed the Federal Reserve's preferred measure of consumer inflation -- the personal consumption expenditures price index, excluding food and energy -- was unchanged in December after edging up 0.1 percent in November.

In the 12 months through December, the core PCE index rose 0.7 percent, the smallest increase since records began in 1959, after increasing 0.8 percent in November.

(Reporting by Lucia Mutikani and Ann Saphir in Chicago; Editing by Andrea Ricci)


Gannett 4Q income up 30 pct; political ad boost

Monday, January 31st, 2011 | Finance News


McLEAN, Va. – Gannett Co., the country's biggest newspaper publisher, said Monday that its fourth-quarter earnings jumped 30 percent as costs fell primarily because of layoffs and as television stations got a one-time boost from political advertising.

The owner of USA Today and more than 80 other dailies earned $174 million, or 72 cents per share, in the quarter. That's up from $134 million, or 56 cents per share, in the same quarter of 2009.

Stripping out one-time items, Gannett said earnings per share climbed to 83 cents from 70 cents. That's two cents better than what analysts surveyed by FactSet expected.

Revenue was essentially flat at $1.46 billion, roughly in line with average forecast for $1.47 billion.

Gannett's newspapers remain besieged by competition on the Web.

The fourth quarter capped four straight years of revenue declines at the company's publishing division, which still accounts for more than two-thirds of Gannett's total. Revenue from the print business fell 4.7 percent from the same quarter a year ago to $1.1 billion. Print adverting revenue fell 5.9 percent to $722 million. That's an even worse decline than the 5.1 percent drop in the third quarter compared with the previous year; until this quarter, the declines have generally gotten smaller each period.

The jump in fourth-quarter earnings came from Gannett's 23 TV stations.

Political campaigns spent a lot on commercial time during the November elections, lifting Gannett's broadcast revenue 27 percent to $233 million. Excluding political ads, Gannett said broadcast revenue would have climbed a more modest 1.2 percent.

The company's Web operations also continued to grow. Digital revenue climbed 5.2 percent to $166 million, but it still only accounted for about 11 percent of overall revenue.

Gannett's expenses declined 4.2 percent to $1.15 billion from $1.2 billion. The company has been shrinking its work force and consolidating operations such as printing plants to reduce costs.

Shares of Gannett, which is based in McLean, fell 54 cents, or 3.6 percent, to $14.65 in morning trading Monday after the results were announced.