Patriot Coal's 3rd quarter production falls short
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Mine operator Patriot Coal's third-quarter production fell 1.4 million tons shy of expectations, which will hurt profits. St. Louis-based Patriot, which says it wants to hire about 200 workers, is blaming a shortage of skilled miners for part of the shortfall announced Friday. It's also blaming difficult geology, increased government inspections and permitting delays, as well as operational challenges at one of its mines. Patriot operates mines in West Virginia and Kentucky. Production shortfalls directly hurt profits for coal companies because costs remain relatively fixed while the amount of coal extracted decreases, upping the per-ton cost. Patriot says it's going to issue revised financial guidance when it releases third-quarter results this month.
Harbinger denied bid for more shares
The largest shareholder of Cleveland Cliffs has lost the fight to buy more shares of the iron ore miner, a move that would have allowed the hedge fund to block Cleveland Cliffs' proposed buyout of Alpha Natural Resources for $4 billion. Ohio-based Cleveland Cliffs is trying to buy Alpha, a Virginia-based coal mining company with a division at Roxana in Letcher County. Cleveland Cliffs shareholders on Friday voted against the request by Harbinger Capital Partners to buy up to a third of the shares of the Cleveland-based company. It needed shareholder approval to increase its holdings. Harbinger owns about 16.6 million shares, or 15.57 percent, of Cleveland Cliffs. Harbinger says Cleveland Cliffs' plan to buy Alpha Natural is too risky.
Insurer AIG to sell some business units
The insurer American International Group Inc. said Friday it plans to sell off a number of business units to pay off its huge government loan. The plan, expected by Wall Street, drove up AIG's shares 5 percent in afternoon trading. But it now leaves investors wondering how much AIG will be able to raise from the sales. On the brink of failure last month, AIG was bailed out when the government offered it an $85 billion loan during the ongoing credit crisis that saw Lehman Brothers Holdings Inc. file for bankruptcy protection and the sale of Merrill Lynch & Co. to Bank of America Corp. In return for the loan, the government received warrants to purchase up to 79.9 percent of AIG. Shortly after the deal, newly appointed Chairman and Chief Executive Edward Liddy said he planned to quickly raise funds through asset sales, but hoped to hold on to as many of AIG's insurance operations as possible.
Loan delinquencies up only slightly
Consumer loan delinquencies rose only slightly in the second quarter, a sign that the federal economic stimulus package helped people pay off debt, the American Bankers Association said Friday. The association's Consumer Credit Delinquency Bulletin said a ratio of eight installment loan types crept up to 2.68 percent from 2.62 percent in the first quarter. The report defines delinquency as a payment that is 30 days or more overdue. The ratio's increase was largely due to a rise in home equity loan delinquencies, a sign of continued weakness in the housing market, the report said. Personal loan delinquencies also increased, but six other loan categories saw delinquencies fall: property improvement, marine, recreational vehicle, mobile home, personal, and direct and indirect auto loans.
Consumer bankruptcies up 29 percent
The number of consumer bankruptcy filings rose about 29 percent in September from a year ago, the American Bankruptcy Institute said Friday. In September, there were 88,663 consumer bankruptcy filings, a decline of 8 percent from August. The data was gathered by the National Bankruptcy Research Center. "The continued rise in personal bankruptcies reflects high consumer debt, made worse by energy costs and the weak housing market, trapping many households in homes they can neither afford nor sell," ABI Executive Director Samuel Gerdano said in a statement. Gerdano said the bankruptcy group expects consumer filings to grow to more than 1.1 million by the end of the year.
GM to close Ohio SUV assembly plant
General Motors Corp. said Friday it will shut down its SUV assembly plant in Moraine, Ohio, on Dec. 23 as the company shifts focus to smaller vehicles. GM spokesman Chris Lee said employees gathered in the plant Friday afternoon were informed of the closing date. Some 1,100 remaining workers are affected. The automaker earlier this year announced plans to close the Moraine plant and three others by the summer of 2010, then accelerated shutdown plans as part of companywide cost-cutting moves.
Busch, InBev to focus on costs
Anheuser-Busch Cos. and InBev SA, which are combining in a $52 billion tie-up to be the world's largest brewer, said Friday they plan to focus more on costs to deal with rising commodity prices that have consumers spending more for beer. Both companies were upbeat about the third quarter, and analysts said the higher prices haven't frightened consumers away. St. Louis-based Anheuser-Busch, which has been raising prices and cutting hundreds of jobs to cope with higher costs for grain, labor, packaging and transportation, said U.S. beer volume rose in the third quarter, helped by the national launch of Bud Light Lime. Goldman Sachs analyst Judy E. Hong said Anheuser-Busch's third quarter indicates a robust domestic beer market and said consumers are choosing beer instead of other beverages because of value and increased marketing.
Compiled from Staff, wire reports