The Baltimore Sun

MidAmerican reduces stake in Constellation

MidAmerican Energy Holdings Co., whose $4.7 billion takeover of Constellation Energy Group was terminated last month, reduced its stake in the Baltimore utility by nearly 2.7 million shares to 8.65 percent, according to documents filed last night with the Securities and Exchange Commission. MidAmerican, a subsidiary of Warren Buffett's Berkshire Hathaway, received a nearly 10 percent stake in Constellation and $593 million in fees when the deal was aborted. Constellation also repaid this month a $1 billion emergency loan, plus $5 million in interest. Constellation instead agreed to a proposed nuclear partnership with France's largest utility, which is pending. MidAmerican holds 17.2 million shares of Constellation as of Jan. 22, according to the SEC filing. Shares of Constellation rose 17 cents to close yesterday at $27.11 a share.

Hanah Cho

Southwest Airlines to cut capacity 4%

DALLAS : Southwest Airlines Co. will cut its capacity 4 percent in 2009, and chairman and chief executive Gary Kelly said yesterday that Southwest's growth is "suspended indefinitely." "I definitely want Southwest Airlines to grow," Kelly told industry analysts and reporters on a conference call. "I believe we will be able to grow, but that is certainly a secondary objective in this kind of an economic environment." He discussed Southwest's new strategy as the Dallas-based carrier announced it lost $56 million in the fourth quarter, including special items, giving Southwest its first back-to-back quarterly losses in nearly 18 years. Southwest is the largest carrier at Baltimore-Washington International Thurgood Marshall Airport. Kelly said Southwest has cut its 2010 delivery of new Boeing 737-700 jets to 10, down from 16 firm orders and six options that it had held. It ended the year with 537 airplanes, and expects to be flying 535 at the end of 2009, with lease returns and retirements to cancel out 13 new deliveries.


O'Malley plans five new foreign trade offices

Hoping to expand Maryland's global reach, Gov. Martin O'Malley announced plans yesterday to open five new foreign trade offices, in Japan, Canada, South Africa, Brazil and the Western Balkans (Montenegro). The governor said the offices will operate on a contingency basis, without any upfront taxpayer investment, and any future state funding would be based on the offices' ability to attract companies and jobs to Maryland. The offices will work with companies in those countries that want to establish or boost their presence in the U.S. market, as well as help Maryland companies export goods and services. The state opened its first contingency trade office, in South Korea, in November, which is being run by Ellicott City-based IDI Corp. The state also has foreign offices in China, Taiwan, Israel and Paris.

Lorraine Mirabella

Severn Bancorp posts its first quarterly loss

Severn Bancorp Inc., the parent of Severn Savings Bank, announced yesterday the first quarterly loss in the Annapolis company's 63-year history. Net loss for the three months that ended Dec. 31 was $230,000 or 4 cents per share, compared with a profit of $2.3 million or 23 cents per share in the fourth quarter of 2007. The quarterly loss was due to the bank increasing its loan loss reserve amid the recession, said Alan J. Hyatt, president and chief executive officer. For the year, the bank reported net income of $4.1 million or 39 cents per share, compared with a profit of $11.1 million or $1.10 a share for 2007. Severn Savings Bank, which started as the Pompeii Permanent Building Association in Highlandtown in 1946, has $980 million in assets and has four branches in Anne Arundel County.

Hanah Cho

M&T; profit down for year but up 57% in 4th quarter

M&T; Bank Corp., which is buying Baltimore-based Provident Bankshares Corp., said fourth-quarter profit climbed 57 percent because of fewer write-downs and increased deposits. Net income rose to $102.2 million, or 92 cents a share, from $64.9 million, or 60 cents, a year earlier, the Buffalo, N.Y.-based bank said yesterday. Profit missed analysts' estimates. M&T; said securities write-downs and mortgage service costs reduced net income by $26 million during the quarter, compared with charges of $78 million for collateralized debt obligations a year earlier. The bank set aside $151 million for credit losses, a 50 percent increase from a year earlier. The company was expected to earn $1.21 a share, the average estimate of nine analysts surveyed by Bloomberg News. For the full year, profit fell 15 percent to $556 million, or $5.01 a share, from $654 million, or $5.95, a year earlier.

Bloomberg News

Northrop Grumman to post 2008 loss

LOS ANGELES : Defense contractor Northrop Grumman warned yesterday that it will post losses for the 2008 fourth quarter and full year because of a charge of $3 billion to $3.4 billion connected to past acquisitions. Recent market turmoil has forced Northrop to write down the value of its acquisitions of Litton Industries Inc. and TRW Inc. made in 2000 and 2001, respectively. Northrop annually accounts for the difference between book values and fair values of the company's shipbuilding and space units at the end of November. Including debt, Northrop respectively paid $5.1 billion and $7.8 billion for Litton and TRW.

Associated Press

Copyright © 2021, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad