Illinois Public Media News
Sara Lee Corp. said Thursday that its fiscal fourth-quarter profit fell 41 percent as it continued to sell-off businesses even as revenue rose on strong results from its North American segments and international beverages unit.
The results of the Downers Grove, IL. food company, which is shedding units as it works to split into two businesses, met analysts' expectations, but the company gave fiscal 2012 adjusted earnings and revenue outlooks below Wall Street's estimates. Its stock fell $1.31, or 7.6 percent, to $16 on the news.
Sara Lee's results continue to be affected by its ongoing plan to become leaner by shedding some operations before it splits into two businesses by early next year -- one focused on coffee and the other largely on meat. Just two days ago, Sara Lee said that it will sell its North American refrigerated dough business to Ralcorp for $545 million. Sara Lee said it's planning to realize $180 million to $200 million in costs savings during fiscal 2012 and 2013 as it prepares for the spinoff.
"Our objective of building two simpler, faster and more entrepreneurial businesses is being realized," Executive Chairman Jan Bennink said in a statement. "We have defined the organizational framework for our new companies and are continuing to build and restructure our teams for the future."
Like other food companies, Sara Lee's results were also impacted as it raised its prices to cope with higher ingredient costs. The company has increased prices across nearly all of its product lines and previously announced that it plans to make price increases all year. Sara Lee's leaders have said that they expect a stronger second half of the year as those price hikes take effect and the company releases new products.
During the current quarter, the company's units benefited from the price hikes. Total revenue rose 9 percent to $2.3 billion from $2.11 billion, topping Wall Street's projected $2.28 billion.
North American retail revenue rose 4 percent mostly because of higher prices. Revenue for the North American food service division climbed 9 percent on increased prices and experienced strong sales of Jimmy Dean breakfast sausages, pre-sliced pies and cakes and branded meats distributed through convenience stores.
The international beverage unit reported a 14 percent revenue increase partly on higher prices and increased green coffee export sales from Brazil. International bakery revenue fell 8 percent on competition in Spain and difficult economic conditions.
Sara Lee earned $111 million, or 19 cents per share, for the period ended July 2. That's down from $187 million, or 28 cents per share, a year ago. Adjusted earnings from continuing operations were 20 cents per share.
For the year, Sara Lee earned $1.29 billion, or $2.06 per share. That compares with earnings of $506 million, or 72 cents per share, in the previous year. Annual revenue rose to $8.68 billion from $8.34 billion.
Looking ahead, Sara Lee expects fiscal 2012 adjusted earnings of 89 cents to 95 cents per share on revenue of $8.5 billion to $8.75 billion. The guidance excludes the international bakery segment, which the company plans to sell. Analysts predict earnings of $1.07 per share on revenue of $9.35 billion.
(AP Photo/M. Spencer Green)
A new report suggests Illinois' rate of home foreclosure fell 3.5 percent between June and July. The RealtyTrac Group said the foreclosure rate is now almost 50 percent lower than last year.
But there is still some bad housing news: a report from the Illinois Association of Realtors said that home prices are actually down 18 percent.
"The thing that we have continued to be fighting over the last several years is consumer confidence....And it was shaken by our budget talks," said Sheryl Grider Whitehurst, president of the IAR.
"So we need to get some stability out there in those marketplaces for people to feel comfortable again to move ahead with other major purchases," Whitehurst continued. "I know we personally had one buyer who backed out of looking at a home because she did receive Social Security checks and she said, 'I don't know if I'm going to receive my checks.'"
Whitehurst said it is best to compare this year's housing market with figures from 2009, not 2010, because buyers in 2010 benefited from a tax credit. The IAR predicts housing prices in the Chicago region will catch up with their 2010 levels in September.
The mayor of Villa Grove says the future of the Douglas County community's downtown remains a question mark after fire destroyed a 100-year old building Wednesday night.
Seventeen different departments fought the blaze, many of them staying throughout the night. There were no injuries. The State Fire Marshall is still investigating the cause. Villa Grove Mayor Thelma 'Boots' Blaney said the building was vacant, and most businesses on the north side of downtown, across Main Street, are open. But she said it will take some time for a local bar, beauty shop, and jewelry store to clean up from smoke and water damage.
Blaney said the firewall around the structures did its job, or the entire block would have been lost. She says those helping out overnight Wednesday motivated each other.
"The businesses just stepped up to the plate," she said. "We have pizzas and all kinds of drinks and ice. People were donating. Businesses were donating. You know, they all just stepped up to the plate, and the firefighters helped them keep going too."
Fire departments helping out included those from St. Joseph, Broadlands, Tuscola, Savoy, Philo, and Comargo.
"Right now, our main concern is getting it cleaned up and the safety of everyone, and trying to go from there," Blaney said. "I mean, it's just like everywhere else, you know, Villa Grove has been struggling. Lord knows what's going to hold up for the future."
Villa Grove Police say the buildings that were destroyed formerly housed the local Moose Lodge and a Chinese restaurant, but the structures had been empty for at least 10 years.
Commonwealth Edison says smart grid technology could save customers more than $2.8 billion over the next 20 years.
ComEd released an analysis Monday from Black & Veatch that puts the cost of installing smart grid as less than or equal to the savings.
Mike McMahan, vice president of Smart Grid and Technology for ComEd, said a rate hike of $3 per customer would cover the cost of the technology, and it would be made up soon after the smart grid was installed.
"We estimate at least $2 of that would be returned to the customer on their bills at the end of the deployment period and there would be an additional $1 in savings associated with fewer outages," he said. "So benefit to the consumer that doesn't pass through the utility."
McMahan said the savings identified in the analysis would come from three major changes. First, the smart grid technology would eliminate manual meter reading, and thus meter reading jobs, because the smart meters would send information directly to ComEd. This would also mean, according to ComEd, more accurate bills and fewer service visits. Secondly, McMahan said smart meters would detect electricity theft and therefore cut down on energy losses. Lastly, McMahan said the new technology would bring enhanced disconnection and reconnection of services, minimizing collection costs during storms, power outages or even when a renter is ending their ComEd service.
Yet all of this rests on the signature of Illinois Gov. Pat Quinn. Earlier this year, legislators in Springfield passed the Energy Infrastructure Modernization Act that would authorize rate hikes for both ComEd and Ameren customers to foot the smart grid bill. Quinn has said he would not sign the measure, as he wants power companies, rather than consumers, to pay for smart grid.
The bill doesn't sit well with members of the Citizens Utility Board. Executive Director David Kolata said he supports installing smart grid, but he does not think this bill is the way to do it.
"I think this analysis is further evidence that smart grid would be good investment for consumers -- we do think it's something that will save consumers money in medium and long term," Kolata said. "It's the other parts, though, that are problematic. You have to make sure you get those right. It's serving as Trojan horse for significant regulatory changes that apply to all ComEd's costs -- if it was just smart grid, it would have passed already."
The bill is currently on Gov. Quinn's desk.
Illinois state employees injured while committing crimes no longer will be able to get workers' compensation under a new law signed by Gov. Pat Quinn.
The law stems from a 2007 wreck involving former Illinois State Police Trooper Matt Mitchell. Mitchell was driving more than 100 mph and using his cell phone on Interstate 64 in southwestern Illinois when his cruiser crossed the median and slammed into a car. The two Collinsville sisters in that car were killed.
Mitchell later pleaded guilty to reckless homicide and was sentenced to 30 months of probation. His claim for workers' compensation for his injuries was denied.
Quinn says Illinois' workers' compensation system is meant to protect workers injured on the job, not those who commit crimes.
The new law takes immediate effect.
Comcast has unveiled a program, known as "Internet Essentials," to expand Internet access for about $10 a month to low-income families.
The cable and Internet provider wants to make the program available next month in 39 states, including Illinois, where the company's Internet service is offered. Comcast spokesman Jack Segal said eligible families must have at least one child receiving free school lunches through the National School Lunch Program. He estimates that lunch program is open to more than 4,500 students in Champaign and Urbana.
"Internet access is the great equalizer," Segal said. "It's great for people economically to have access --- kids especially to have access to the internet to do their homework, to learn, to dream, and to really, really participate in the world."
To qualify for the program, customers must not have any overdue bills with the company or unreturned equipment. They also cannot join Comcast's Internet service 90 days prior to joining the program.
The low-income families who qualify can purchase vouchers for a new computer valued at around $150. They can also sign up for free digital literacy training.
This is not the only internet plan coming to Champaign-Urbana. Organizers of the UC2B Big Broadband project are hoping to get high-speed Internet in the area by Feb. 2013. The University of Illinois has taken the lead in getting the more than $22 million federal grant and a $3.5 million state grant to support the project, but it is leaving much of the work to the cities.
The high-speed Internet plan would costs about twice as much for customers compared to the Comcast program and run up to 10 times faster, according Mike Smeltzer, the principal investigator of UC2B's grant.
"Our connection will be massively fast," Smeltzer said. "I think (Comcast's plan) is kind of like training wheels for our project. If somebody doesn't have Internet today, and they look at this and they say, 'Hey, this would be good for our kids that are in school, and we can afford the 10 bucks a month, let's get it.' It will only wet their appetite for something better."
Smeltzer also praised Comcast's reduced-price service, saying it will help connect people in areas where the UC2B project won't be available.
(AP Photo/Gene J. Puskar)
Gov. Pat Quinn says that by the middle of September he hopes to name a nine-member commission that will establish private scholarships for immigrant children in Illinois both illegally and legally.
Quinn says he wants to make sure people who want to serve on the commission created by the Illinois Dream Act he signed this week have time to submit their names for consideration.
The Chicago Democrat will name the commission that has to raise private money to fund the scholarships because no taxpayer dollars will be used.
Immigrant children can qualify if they attend an Illinois high school for at least three years and have at least one parent who immigrated to the United States.
Quinn has already pledged $1,000 to the fund.
Illinois Gov. Pat Quinn's office is working on legislation to restore funds to pay the salaries of the state's regional school superintendents.
Quinn cut their funding earlier this year. But the Superintendent for Champaign and Ford Counties says she is pessimistic that anything will be settled prior to start of the legislature's fall veto session. That means Jane Quinlan and other superintendents won't get paid until November or December. Quinlan said it is a hard time of the year to be dealing without income.
"All bus drivers have to have refresher courses," Quinlan explained. "We've had a number of people in the office trying to get their authorization to substitute teach in schools, we provide the training for new administrators that they need to take before they can evaluate staff. There are a number of things that like that going on this month that are critical to getting school started."
Quinlan said there does not appear to be plan in place for superintendent's offices that are forced to close.
"If it's a case where you have savings or you have a spouse who's employed, you're able to perhaps work longer without a paycheck," she said. "Though I think most people understand that they expect to be paid when they're working."
A spokesman for the Illinois Association of Regional Superintendents of Schools, Ryan Keith, said the governor could be looking into using money from the State Board of Education as a short-term fix, but he said there is no specific proposal yet.
The governor's office expects to have more information about this legislation next week, but Keith questions whether the measure needs approval by lawmakers this fall anyway.
Quinlan said it is more likely that legislators override the governor's original veto of the superintendent funding when the fall veto session begins in October.
Postcards are in the mail to Illinois low-income senior citizens eligible to ride free on public transit.
The Department on Aging announced Wednesday the postcards went to seniors enrolled in the Circuit Breaker program.
Those seniors remain eligible for free rides on public buses and trains.
Free rides are ending for other seniors, although they'll still get reduced fares. Gov. Pat Quinn signed legislation in February to limit the "Seniors Ride Free" program to low-income seniors.
Seniors in the Circuit Breaker program may need to contact their local public transit agency for a free ride card.
To qualify for Circuit Breaker assistance, an applicant's total income for 2010 must be less than $27,610 for a household size of one.
(Photo courtesy of erekslater/Flickr)
President Barack Obama is praising a bipartisan deal that will end the partial shutdown of the Federal Aviation Administration and get thousands of workers back on the job.
Obama says the nation "can't afford to let politics in Washington hamper our recovery.''
He says he's pleased to see leaders in Congress working together to settle the issue.
The FAA flap has become another embarrassment for the federal government.
Senate Majority Leader Harry Reid announced a deal to extend the FAA's operating authority through mid-September. Under the plan, the Senate will approve a House bill that includes a contentious provision cutting $16.5 million in subsidies for rural communities. Democrats say the administration will use authority under the deal to waive those cuts.
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