QUOTE OF THE DAY
“With the underlying economy fairly solid and with the still very high average age of the fleet, I have full expectations that we will continue to see a fairly steady industry.”
Mustafa Mohatarem, GM chief economist, about August automobile sales Article, 1D
Nasdaq price-feed glitch snags trading
For the second time in two weeks, a malfunction with a price feed overseen by Nasdaq OMX Group Inc. led to a trading halt of some U.S. companies it lists.
Nasdaq’s securities information processor had a hardware failure at 10:35 a.m. CDT, and the problem was resolved about six minutes later, the company said in a statement. Direct Edge Holdings LLC, another U.S. exchange operator, said in a statement that it had temporarily stopped transactions for some Nasdaq-listed stocks.
Nasdaq halted trading in thousands of its stocks for three hours on Aug. 22 out of concern a connectivity problem in the feed would cause uneven dissemination of prices in the market. The disruption underscored how quickly the integrity of the U.S. market, which has a value of about $20 trillion, can be subverted as orders to buy and sell shares are matched on more than 50 exchanges and alternative electronic venues.
U.K. to prosecute Olympus over fraud
TOKYO - British authorities are set to prosecute Olympus, the Japanese manufacturer embroiled in a $1.7 billion accounting fraud two years ago, reviving a high-profile scandal after a Japanese court limited its verdict to modest fines and suspended sentences for several executives.
Olympus, along with its British unit, Gyrus, will be prosecuted by Britain’s Serious Fraud Office over falsifying financial statements in 2009 and 2010 in purported breach of Britain’s Companies Act, the company said in a statement Wednesday.
Olympus, which is based in Tokyo, admitted in late 2011 that it had operated an elaborate, long-running scheme to cover up $1.7 billion in losses, after its newly installed chief executive, Michael Woodford, blew the whistle on irregular accounting practices at the company.
The internal allegations had led Olympus to fire Woodford, a British national. But he went public with evidence of wrongdoing and has since submitted evidence and testimony to British, American and Japanese investigators.
In Japan, a local court handed three Olympus executives suspended sentences and fined the company $7 million. Olympus also faced separate fines from Japan’s Financial Services Agency and the Tokyo Stock Exchange, which elected to keep Olympus stock listed.
Court rules for Conoco, faults Venezuela
ConocoPhillips, the third-largest U.S. oil company by market value, said an international arbitration court ruled Venezuela’s 2007 seizure of its crude projects illegal.
The South American nation “breached its obligation to negotiate in good faith” for compensating ConocoPhillips for the expropriated assets, the Washington-based International Centre for Settlement of Investment Disputes said in a ruling posted on its website Tuesday.
The ruling refers to ConocoPhillips’ Hamaca and Petrozuata projects in the Orinoco heavy-oil belt, as well as the Corocoro offshore project. When late Venezuelan President Hugo Chavez forced foreign companies to cede majority stakes in oil projects six years ago, the Houston-based oil company rejected the terms and took its claims to courts.
The ruling means “the state’s liability is absolutely final and binding; the court is not going to revisit that,” said Abby Cohen Smutny, a partner in the international arbitration practice at White & Case in Washington. “Now what lies ahead is to determine the amount of damages owed.”
ConocoPhillips invested $3.1 billion in Petrozuata and Hamaca in the initial stages completed in 2004, according to its state-owned partner Petroleos de Venezuela SA.
Venezuela will defend its interests at the court, Rafael Ramirez, oil minister and Petroleos de Venezuela president, told reporters Wednesday in Caracas. Companies must respect Venezuelan laws, he said.
- Bloomberg News
Gulfport shipyard to shut down by May
JACKSON, Miss. - Huntington Ingalls Industries says it will close its Gulfport shipyard by May 2014.
In an announcement Wednesday morning, the Newport News, Va.-based company said the shutdown is necessary because of a reduction in work for the Navy’s Zumwalt-class destroyers.
Company President and Chief Executive Officer Mike Petters said the Navy has switched to steel for use in future ships.
The decision, he said, means more-limited demand for products produced by the company’s Gulfport Composite Center of Excellence.
“This is a difficult but necessary decision,” Petters said in a statement. “Due to the reduction in the Zumwalt-class ship construction and the recent U.S. Navy decision to use steel products on [the] Lyndon B. Johnson [ship], there is both limited and declining Navy use for composite products from the Gulfport Facility.”
Petters said work now underway in Gulfport is expected to be complete by the end of the first quarter of 2014.
The company said some of the 427 workers at the Gulfport yard may be able to transfer to other Huntington Ingalls yards.
Ingalls also has shipyards in Pascagoula, Miss., and in Avondale, La., a suburb of New Orleans.
Neither appears to be affected by Wednesday’s announcement though the company has already downsized the Louisiana facility.
Airbus wins Delta order for 40 jetliners
Airbus SAS beat Boeing Co. to win an order for 10 wide-body international jets and 30 narrow-body planes from Delta Air Lines Inc. with a list value of $5.6 billion.
Deliveries of the A330-300 twin-aisle aircraft will begin in early 2015, and the single-aisle A321 jets for domestic service will start arriving in 2016, Atlanta-based Delta said Wednesday in a statement.
Delta is buying the current model of the A321, eschewing re-engined versions that cost more, as part of Chief Executive Officer Richard Anderson’s strategy of purchasing cheaper planes that can be paid off quicker.
Delta, the world’s second-largest carrier, had been evaluating A330s against Boeing’s wide-body 777 as part of a fleet upgrade, people familiar with the matter said in March.
The Airbus A330-300 has a list price of $239.4 million, while the A321’s price is $107.3 million, according to published prices from the Toulouse, France-based plane-maker.
Airlines typically negotiate steep discounts from list prices.
- Bloomberg News
Business, Pages 28 on 09/05/2013