Financial Mines

News and notes from the business reporters for the Connecticut Media Group.

Archive for January 18th, 2013

Webster and People’s shares diverge after banks’ strong earnings

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Shares in Bridgeport-based People’s United Financial and Waterbury’s Webster Financial each moved 2 percent Friday, but in opposite directions after the banks reported earnings and held conference calls with analysts.

People’s shares dipped 2.5 percent, losing 32 cents to close at $12.39 Friday despite the bank reporting the day before earnings were up 47 percent from a year ago. Peoples had net income of $61.2 million, or 18 cents per share, for the fourth quarter of 2012, compared to $41.4 million, or 12 cents per share, for the fourth quarter of 2011.

Webster’s shares rose more than 2 percent Friday, gaining 46 cents to close at $22.30, after the Waterbury institution reported earnings rose 21 percent from a year ago. Webster said net income available to shareholders of $47.9 million, or 52 cents per diluted share, for the quarter ended December 31, 2012 compared to $39.6 million, or 43 cents diluted share, a year ago.

Sikorsky Boeing team up to create Pentagon’s helicopter of the future

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The Pentagon’s Joint Multi-Role demonstrator program is the starting line for a race to win the most lucrative helicopter contract in U.S. history, that is if the government continues to fund it.

On Friday, the two largest helicopter makers in the U.S. joined forces to go after the contract, which could ultimately lead to thousands of aircraft that will begin replacing Black Hawks, Navy Seahawks, Apache and Chinooks beginning in 2030. While the news was big, many of the reporters on the conference call for the announcement wondered, “Where is Lockheed?”

Sikorsky didn’t bite on the question and Lockheed didn’t answer an email for comment on Friday.

But it’s a good question. Lockheed has been through this kind of competition, an almost winner-take-all fight. In 1996, Lockheed and Boeing won the right to compete for the Joint Strike Fighter contract. The Pentagon envisioned a fighter that could be used by multiple branches. The initial stage of the competition include McDonnell Douglas, a firm with a proud fighter history, but the company failed to make it into the finals and Boeing eventually bought it.

In the end, Lockheed prevailed and is producing the F-35, powered by Pratt engines today.

That’s not to say we won’t see Lockheed down the road. During the conference, both Boeing and Sikorsky officials declined to answer whether they would also offer designs for this competition individually or with other partners. Boeing has already partnered with Bell in the earlier stages of the competition. Boeing’s official actually noted there’s no preclusion from doing that.

Other concerns about the partnership involved the competitive requirement of the program. The Pentagon expects two aircraft to move into a final contest for the contract and reporters wondered if having the two largest helicopter makers in the country join forces might leave the field short on competition.

Ultimately, the competition is a bold move for the U.S. Military.

Senior Aerospace Analyst Ray Jaworowski pointed out, the Pentagon had been buying upgraded versions of the helicopters currently in its fleet for decades and hasn’t been developing much new. Only the V-22 has entered the fleet in the past decade.

Sikorsky, during the conference said it’s too early to tell what kind of impact this could have on jobs, but the helicopter maker is looking for the world’s best talent to put on this and other projects.

As far as what the companies are cooking up, they wouldn’t say. Sikorsky’s official said because of the length of time of the competition, the design and technology will change.

While a lot is riding on this for both Boeing and Sikorsky, jobs in particular, the contest itself is exciting for engineers, with Jaworowski agreeing it’s a great time to be an aerospace engineer.

Norwalk’s Southern Air to cut 120 jobs

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Southern Air Inc. filed a mass-layoff notice with the state this week saying 120 workers will lose their jobs in March.

The cargo airline has struggled over the last few years and is trying to emerge from chapter 11 bankruptcy. A plan of reorganization was scheduled for Feb. 14 of this year.

In November, the airline suffered a $7.2 million net loss from operations according to documents filed with the court.

Southern provides cargo services for commercial operations, government and the military.