For Immediate Release
Chicago, IL – March 16, 2010 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Joy Global (JOYG), Bucyrus (BUCY), National Oilwell Varco (NOV), Baker Hughes (BHI) and American International Group Inc. (AIG).
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Here are highlights from Monday’s Analyst Blog:
Industrial Production Edges Up
Capacity utilization in manufacturing actually ticked down to 69.0% from 69.1% in January and 68.4% in December. The January number was revised down from 69.2%. However, it is a solid improvement over the year-ago level of 67.1%. However, it is well below the long-term (1972-2009) average of 79.2%. The rebound has been aided by a permanent shrinking of capacity as well, by 1.2% overall and by 1.4% in manufacturing. That is hardly a healthy situation.
While far too many factories are sitting idle, the nation’s mines and power plants are operating at much more normal rates. Capacity utilization of mines jumped to 88.2% from 86.4% in January and 85.5% in December, and is now above both the year-ago level of 87.1% and of the long-term average level of 87.5%. That is only partly due to a 1.0% reduction in total capacity over the last year.
The relatively high level of capacity utilization in the mining industry is very good news for the firms that supply equipment to the mines like Joy Global (JOYG) and Bucyrus (BUCY). Remember that mine output includes oil and gas production, so the higher operating rates are also good news for firms in the oil service industry like National Oilwell Varco (NOV) and Baker Hughes (BHI).
Utilization of the nation’s power plants rose to 83.1% from 82.8% in January and 82.5% in December, and 81.1% a year ago. However, it remains well below the long-term average of 86.6% (but nowhere near as big a gap as in manufacturing). Unlike factories and mines, overall capacity in utilities is actually growing, with total capacity rising by 1.9% year over year. The increase in alternative energy sources has not been matched with a permament shut down of older, mostly coal-fired, power plants.
AIG Holds Back $21M in Bonuses
American International Group Inc. (AIG) will hold back $21 million in retention bonuses to its former employees, according to a Wall Street Journal report.
The company, which will pay out $46 million today in retention bonuses to about 70 employees, both former and current, has made the cut to meet a target imposed by Kenneth Feinberg, the U.S. Treasury Department’s compensation czar. The payout will go to the employees of its financial products unit. This unit’s performance was significantly responsible for the company’s fall-out during the financial crisis.
However, AIG believes that under certain circumstances the company can limit the payouts. Recently, the company had enquired its former employees about their earnings after they departed from AIG. The company is said to reduce the payouts of its former employees by that amount.
AIG received federal support worth $182.5 billion, which helped prevent its collapse in September 2008. The company, approximately 80% of which is owned by the U.S. government, came in under the scanner by the public after it paid out $165 million as bonuses to its employees last March.
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