Financial Mines

Tonight, we’ll be tweeting from UB’s Sammis Lecture, which features William Parrett, chairman of the U.S. Council for International Business and a director of The Blackstone Group.
Tonight’s topic – multinational corp. investment in China

Stratford-based Sikorsky Aircraft saw its commercial shipments fall to 12 in the fourth quarter compared to 16 in the same period a year ago, while its sister UTC company Pratt & Whitney experienced an increase from commercial aviation, shipping 154 engines in the fourth quarter of 2011, up from 110 the previous year.

UTC reported earnings for the fourth quarter and year on Wednesday with Sikorsky’s operating profit dipping to $207 million from $239 million. However, Sikorsky took $37 million in restructuring related charges in the quarter. The layoffs, announced last year, are expected to be finalized this quarter and some employees have said they expect to hear this week who will be laid off.

Aerospace companies are hoping commercial aviation, which was dramatically affected by the global economic crash of 2008, is ready to soar in 2012 and 2013, which could help them replace the drop off in revenues from defense, which is expected to hit in the next couple of years.

While Pratt’s numbers show an increase in demand from the commercial markets, Sikorsky showed it is still very much a struggle for helicopters.

However, Sikorsky continued to ship a high number of military aircraft, delivering 61 helicopters in the last quarter of 2011, compared to 60 in the same period in 2010. Overall, Sikorsky shipped 235 military aircraft in 2011 compared to 219 in 2010. Pratt’s military shipments declined for the year to 161 from 180.

Shares in UTC were down 5 cents to $77.73 in New York trading Wednesday before noon.

United Technologies Corp. reported fourth quarter net income attributable to shareholders climbed to $1.3 billion, or $1.47 per diluted share, from $1.2 billion, or $1.31 per diluted share a year ago.
The company said restructuring charges cost 11 cents in the quarter.
Sikorsky accounted for 25 percent of those costs as it cut more than 1000 job. It had $207 million in operating profits for the quarter.

Sikorsky Aircraft’s aftermarket division signed an agreement with Danish Aerotech A/S to discuss the establishment of a support facility and service should Sikorsky win a Roayl Danish Navy contract.

The Danes are expected to announce their decision on the contest this year and Sikorsky Aerospace Services would work with Danish Aerotech to supply replacement parts for the new helicopters.

Sikorsky is a subsidiary of Hartford-based United Technologies Corp. Shares of UTC were up 48 cents to $77.34 in Tuesday trading, just a day before UTC reports fourth space and full-year earnings for 2011.

Travelers executives say they weathered a difficult year of disasters in 2011 and in the fourth quarter posted net income of $618 million, or $1.51 per diluted share, compared to $894 million or $1.95 a share for the same quarter in 2010.

The company noted 2011 was the most expensive year on record for insurers around the globe. While this increased payouts on policies, it also drove up demand for policies and renewals and most importantly pricing power for the insurer.

(Simple human behavior and psychology. Those that struggled without insurance never want to get caught without it and those that used it see its value… )

Travelers said in the fourth quarter alone, renewal price increases were up more than 6 percent, or double the increase it got in the third quarter.

Despite the positives, shares of Travelers were down more than 3 percent to $58.57 in Tuesday trading after the earnings announcement. Pricing power and increased demand for products can’t overcome the fact that it was $200 million short from a year ago and missed analysts’ estimates.

With the sun shining, temperatures locked in the mid 40s, it’s a beautiful day here in the Nutmeg State. Too bad, the economic news couldn’t keep up.

Challenger, Gray & Christmas said announced layoffs in December were about 41,000, which was slightly lower than the monthly average in 2011. But the company, an outplacement firm for corporations that tracks the job market, said a total of 606,082 job cuts were announced last year, a 14 percent increase over the 529,973 in 2010.

The government sector lead all sectors in cuts, but aerospace and finance were among the biggest losers last year.

The IMF also predicted smaller growth for the world economy in 2012.

And, in the news category of insult to injury, the Special Inspector General to TARP, said federal regulators approved millions in bonuses and pay for executives of companies that needed government funding to survive.

The market appeared to be gamely fighting off the bad news, with the S&P down just 3 points.

Norwalk-based Priceline.com’s new ad in which long-time pitchman and everyone’s favorite starship captain Will Shatner dies in a fiery bus crash, did not amuse the American Bus Association.

In a press release, the ABA said depicting Shatner’s character, the Priceline Negotiator, dying in a fiery bus crash is in very poor taste.

Dan Ronan, a spokesman for the ABA, said via phone that it’s unacceptable and asked rhetorically what kind of reaction Priceline would have gotten if it used another form of mass transit.

“We’re the second biggest form of transportation in the nation,” he said. “We carry 726 million passengers a year, second only to the airlines.”

The ABA wants Priceline to remove the spot and to have its CEO and Shatner take  bus trip to prove how safe it is to travel by bus.

Brian Ek, a Priceline spokesman, declined to comment on the ABA’s concerns.

Shatner has been priceline.com’s celebrity spokesman for 14 years, and remains under contract to the company, the Norwalk business said.  In a press release announcing the change in its marketing, Priceline  said killing Shatner’s character will help focus consumers’ attention on other aspects of its business, particularly the  published-price hotel service, the fastest-growing segment of priceline.com’s hotel business.

Shares of Priceline were trading at $518.59.

Stamford-based Diamondback Capital Management might well be able to put an insider trading scandal behind it, settling civil allegations on Monday and escaping any criminal charges from the Department of Justice.

The hedge fund, in a letter to investors, said it is moving forward with business after the  U.S. Attorney for the Southern District of New York,  resolved the investigation into the matter without any criminal charges and following an SEC settlement.

The U.S. Attorney and Diamondback revealed that an outside review of Diamondback’s operations that documented violations of the companies policies provided key information for the government as it pursued this insider trading case involving Dell and Nvidia Corp. stock. Former employees of Diamondback and Level Global have been implicated with others in the alleged conspiracy.

Diamondback said this closed the door on the investigation while noting all payments as a result of the SEC settlement will come from the firm and not investors.

The SEC announced Monday Diamondback agreed to pay more than $9 million to settle insider trading charges against it.

According to the SEC, Diamondback will give up more than $6 million of “allegedly ill-gotten gains” from the deal. It will also pay a $3 million fine.

The settlement is subject to the approval of Judge Paul G. Gardephe of the U.S. District Court for the Southern District of New York.