According to people familiar with American International Group Inc's (NYSE: AIG) board, some directors feel that another big loss in the current quarter could prompt them to re-evaluate their support for CEO Martin Sullivan. The sources said a decision on Sullivan's fate isn't likely to be made until the company sees results over the next several months, the Wall Street Journal reported.
The Boeing Company (NYSE: BA) closed a helicopter production line for several hours yesterday due to possible irregularities found in two military helicopters, the Seattle Times reported. The company did not disclose exactly why it shut down the production of the H-47 Chinooks.
WEB SITES:
According to Mac Rumors, citing French LeMatin.ch, a source in Swisscom AG (OTC: SCMWY) said Switzerland will be getting the iPhone device from Apple Inc (NASDAQ: AAPL) this summer, and it will feature GPS, Video Conferencing and Mobile TV.
Airbus has again delayed delivery of selected A380 superjumbo jets, saying the company's transition to automated production is behind schedule.
Airbus now expects to deliver 12 A380 planes in 2008, down from 13, and 21 planes in 2009, down from 25, the company announced Tuesday.
Promoted as the world's most economical, large aircraft, the A380 is about two years behind schedule. The A380 will seat 525 passengers in a normal configuration, at least 50-120 seats more than its chief competition, Boeing's (NYSE: BA) 747, the wide-body industry standard.
In Europe, shares of Airbus's parent EADS were virtually unchanged on the news, down just 2 euro cents to 12.72 euros in afternoon trading. Boeing's shares gained five cents to $84.87.
According to the Wall Street Journal, former American International Group Inc (NYSE: AIG) CEO Maurice R. "Hank" Greenberg is pressing the troubled insurer to turn the company around. He says that he and other major shareholders have "deep concern about the persistent and seemingly endless destruction of value at AIG."
Hybrid Capital Second, a Morgan Stanley (NYSE: MS) investment vehicle, increased its stake in internet start-up Livedoor to 18.15% from 12.76% in March, the Financial Times reported, superseding the company's founder, Takafumi Horie.
OTHER PAPERS:
After it incurred $3.2B of bad debts in the first three months of the year, the Telegraph reported that Knight Vinke, an HSBC Holdings Plc (NYSE: HBC) shareholder, has renewed calls for the bank to shed its U.S. consumer finance business.
Several leading business journals have reported that China has created its own regional jumbo jet company to compete with Boeing Co (NYSE: BA) and Airbus.
The Financial Times (subscription required) reports, "China has unveiled a state-owned aircraft manufacturer intended to eventually challenge Boeing and Airbus's control of the global market in large airliners." The Times characterizes the Commercial Aircraft Corporation of China (CACC) as "a significant step in Beijing's drive to create an advanced civil aviation manufacturing sector able to help meet the country's rapidly growing demand for regional and larger jets."
Reuters noted that, "many analysts have expressed skepticism about the commercial prospects of a large jet designed and manufactured entirely in China, given the country's limited experience in big aircraft." Not sure what analysts know, I'm skeptical just as much of them.
Readers of this space know that the investment bias is toward large-cap companies with demonstrated business models and who have a competitive advantage in established markets, preferably with a favorable global trend as a support. And with the above in mind, Boeing is worth an evaluation.
In general, analysts expect 3-5% revenue growth in FY 2008, and 7-10% in FY 2009 as Boeing's increased aircraft production to meet high order backlogs offsets production delays in the 787 Dreamliner.
Moreover, although not to give short-shrift to Boeing's Integrated Defense Systems division, now the world's second-largest military contractor, behind Lockheed Martin (NYSE: LMT), the major driver of BA's future value-added will continue to be its commercial aviation operation, led by the next-generation 787 Dreamliner.
Today's Washington Post reports on the latest successful purchase of John McCain's services -- yielding a sweet real estate deal for an Arizona developer in the wake of his $100,000 campaign contribution. But that railer against the role of money in politics appears to have been bought many times before -- and American workers and taxpayers have paid the price.
The Washington Post reports that McCain pushed legislation that let an Arizona rancher trade remote grassland and ponderosa pine forest there for acres of valuable federally owned property that is ready for development, a land swap that now stands to directly benefit one of his top presidential campaign fundraisers. Specifically, Steven A. Betts, who raised $100,000 for McCain, got the job of developing rancher Fred Ruskin's land after McCain's legislation helped Ruskin pick it up at below market rates.
But this is at least the fifth transaction where a campaign contributor has benefited from McCain's power. Here are five others:
Reuters reports that German daily Die Welt quotes a customer letter saying that Boeing Co. (NYSE: BA) just announced the fourth delay in delivering its 787 Dreamliner. It was originally scheduled for this month but if Die Welt is right about the fourth delay -- which would affect deliveries scheduled for 2012 -- the 787 would now be 27 months behind schedule. But Boeing denies the report.
The good news as of now is that none of the 55 customers who ordered 787s -- creating a $151 billion backlog -- have canceled. Last month the CourierPost reported that the three initial delays would cost Boeing $4 billion cancellation fees. No word on how much this fourth delay will add to that cost -- if the report proves to be true.
But 2008 is turning out to be far worse year for aircraft orders than 2007 was. Both Boeing and Airbus have played down expectations for plane orders this year, after the record 2,754 orders between them last year. Most analysts are expecting about half that number this year.
With the current challenging market conditions probably many of us are wondering which are those reliable stocks that could offer us a big profit in the next coming years. In the light of those questions, Gene Marcial's new book, 7 Commandments of Stock Investing, reveals his perspective over seven stocks that are considered to be worth buying and holding for the next seven years (check out BusinessWeek's slideshow of his seven picks).
Taking advantage of the experience he gained over the past 30 years, BusinessWeek's Gene Marcial shares his opinions related to investors' strategy to use market meltdowns for their own benefit, being able to turn the stock market panic into success.
After hitting a one-year low of $88.86 in August, the stock hit a one-year high of $113.74 in October. LMT opened this morning at $103.99. So far today the stock has hit a low of $103.79 and a high of $108.00. As of 12:45, LMT is trading at $107.08, up $3.29 (3.1%). The chart for LMT looks bearish but improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider a June bull-put credit spread below the $95 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in just two months as long as LMT is above $95 at June expiration. Lockheed Martin would have to fall by more than 11% before we would start to lose money.
Boeing Co. (NYSE: BA) gets a mixed report card this morning. Its earnings were up 38% in the first quarter but it lost a $3.74 billion deal to Northrop Grumman (NYSE: NOC). The Wall Street Journal [subscription required] reports that Boeing earned $1.62 in the first quarter, beating analysts' estimates by 27 cents a share. But Bloomberg News reports that Boeing lost another contest with Northrop -- this time for a spy plane, specifically a drone.
First, the good news for Boeing. The Journal reports that its net income of $1.21 billion, or $1.62 a share, increased 43% from $877 million, or $1.13 a share, a year earlier, while its revenue climbed 4.1% to $15.99 billion. Also important, Boeing reiterated its boosted guidance for earnings of $5.70 to $5.85 a share on $67 billion to $68 billion in revenue. Analysts' latest mean estimates were $5.93 and $68.95 billion, respectively. Even better, it raised its earnings projections for 2009 to between $6.80 and $7 a share on strong production-program performance and declining research-and-development and pension expenses. Analysts were expecting $6.87.
Now, the bad news. Northrop's Global Hawk drone beat Boeing's aircraft for the 68 plane order, after in February, Boeing already lost an Air Force competition for refueling tankers. Northrop, which had never built a refueling aircraft, faced a Boeing team that supplied the Air Force for more than half a century. Northrop won that $35 billion program by offering a larger jet with more fuel capacity than Boeing. Is Boeing's lack of competitive vigor on the defense side a sign of deeper management problems?
Investors don't seem concerned. Boeing stock is up over 2% in early trading.
For nervous investors and analysts looking for good news on the earnings front, it's been a week of mixed blessings. However, judging by the expectations for the following ten so-called barometers of the U.S. economy, or important sectors of it, things could be looking up. All these companies are scheduled to report quarterly results next week (April 21 to April 25).
These first six companies are expected by analysts surveyed by Thomson Financial to post growth in profits in the most recent quarter, compared to the same period of last year:
Fort Worth-based AMR Corp. (NYSE: AMR), parent of American Airlines, was the first major U.S. airline company to report first-quarter results, and it posted a loss of $1.32 per share. Revenue rose 5% to $5.7 billion. Analysts surveyed by Thomson Financial had expected a loss of $1.34 per share on revenue of $5.73 billion.
Filling seats wasn't American's problem -- average occupancy hit a record 79.1% percent in the quarter. Average fares paid rose 5.1%, as airlines raised ticket prices. But executives said they were concerned about the weakening economy and even more worried about skyrocketing fuel costs. American's fuel spending jumped 45%, offsetting further increases in revenue.
American announced that it will be cutting U.S. capacity by 3.6% this year and selling 90% of its investment arm, American Beacon Advisors. The company also expects to sell or spin off its American Eagle regional airline this year to raise additional cash.
American is also speeding the replacement of its fleet with more fuel-efficient Boeing (NYSE: BA) 737-800s, taking delivery of 30 new planes in 2009 and 2010 instead of the previously planned 23.
AMR shares rose 35 cents, or 4.1%, to $8.92 in trading Wednesday.
If Boeing (NYSE: BA) were writing for BloggingStocks:
We have a great article for you; the best you've ever read. It will save you a ton of money, bring back your youth, enlarge your penis or bust line, cure cancer, solve global warming, eliminate the national debt, provide jobs to all Americans, is family-values friendly, tastes delicious but is calorie-free, is hilarious without demeaning any race or sex, and will remain relevant for at least the next twenty years.
Unfortunately, posting of this article will be delayed due to a worldwide shortage of ampersands and the outsourcing of verbs to China. Look for this article in the first third quarter of 2008 2009, although we're happy to take orders (and prepayment) for it at any time.
Until then, you'll have to be satisfied with more of our same old bologna. But the article will be worth the wait. And don't pay any attention to those Europeans promising just as good an article. They don't even speak our lingua franca, do they?
It's not bad enough that air travelers are facing more and more delays, and airlines are canceling more and flights, but along comes airplane maker Boeing (NYSE:BA) announcing that its 787 Dreamliner is going to face a delay of at least 14 months until deliveries are made.
According to the AP report: "The Times of London reported on its Web site late Wednesday, quoting those familiar with the matter who asked not to be identified, that delays for 787 could reach 18 months, while the Seattle Post-Intelligencer put the delay at 14 months from the original goal."
What's with this industry? Why can't anything be on time?
With three airlines going bankrupt in the last week alone, the industry is a mess. It's no wonder Boeing announced the delay because it needs to really make sure that the plane is sound structurally. The Seattle Times had a story about airline woes and reported: "American, Delta and United airlines recently canceled flights to perform unscheduled inspections of certain aircraft, and US Airways found problems on some Boeing 757s after a wing part on one of its planes fell off during a flight."
With the busy summer travel season fast approaching, travelers better plan for even more delays.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 4/9/08.
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MAJOR PAPERS:
Airbus has again delayed delivery of selected A380 superjumbo jets, saying the company's transition to automated production is behind schedule.
Several leading business journals have reported that China has created its own regional jumbo jet company to compete with 
With the current challenging market conditions probably many of us are wondering which are those reliable stocks that could offer us a big profit in the next coming years. In the light of those questions, Gene Marcial's new book, 7 Commandments of Stock Investing, reveals his perspective over seven stocks that are considered to be worth buying and holding for the next seven years (check out BusinessWeek's 
Here are some highlights from this past week's 
For nervous investors and analysts looking for good news on the earnings front, it's been a week of mixed blessings. However, judging by the expectations for the following ten so-called barometers of the U.S. economy, or important sectors of it, things could be looking up. All these companies are scheduled to report quarterly results next week (April 21 to April 25).
Fort Worth-based 
If
It's not bad enough that air travelers are facing more and more delays, and airlines are canceling more and flights, but along comes airplane maker 
Oil hits record $127.43 on supply concerns, raised Goldman forecast
Icahn's 'shock and awe' on Yahoo -- a gutsy play
Housing starts surprisingly rise in April on apartment construction
