Three bellwethers have reported first quarter 2009 numbers that are just as strong, if not stronger, than those posted in prior quarters. That doesn’t guarantee they’ll continue to put up high-quality numbers as long as this recession lasts, particularly if conditions should worsen. But as long as they do continue to buck this downturn, they’re in the game for an explosive recovery when conditions turn, particularly from today’s low prices. Read More
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Given the carnage of the past 21 months of market history, it’s tempting to buy into the line from the rock industry spoof This Is Spinal Tap. That is, that one can get “too much bloody perspective.” But given the financial media’s almost complete lack of it, a little now can go a very long way. Read More
Nothing is guaranteed in the stock market. But it looks like as long as companies continue to generate numbers that show business is steady in this recession, they’re going to hold their ground as long as this bear market lasts. And, once conditions improve, they’re going to recover the losses we’ve seen since mid-2007. Read More
As a ratepayer of Virginia Power, I don’t like paying more for electricity than anyone else does. But writing about utilities for more than 20 years--and exploring in detail their century plus history--has also made me painfully aware of how penny wise and pound foolish fighting rate increases often is for consumers. Read More
Since the late September fall of Lehman Brothers 60 energy and water utilities have increased distributions, versus just four decreases. Five telecoms have raised payouts, versus one reduction. These numbers provide a stark contrast to the wave of dividend cuts afflicting virtually every other sector. Coupled with solid fourth quarter earnings and positive guidance for 2009, they’re proof that essential services are still weathering this recession, now the worst in 80 years. Read More
Carbon regulation is by far the US power industry’s most important environmental issue since the 1990 Clean Air Act. Back then, the first President Bush set limits on sulphur oxide (SOX) and nitrogen oxide (NOX) emissions causing acid rain by creating a “cap-and-trade” system that allowed companies to gain time for adjustments by buying emission “credits.” Cap-and-trade’s success cutting acid rain at a relatively low cost has made it the top choice for controlling carbon, both for industry and regulators. The devil, however, is in the details. Read More
Back in the bad old days of the last bear market I got used to hearing readers say they were throwing in the towel. Never again would they “trust” utilities (or me for that matter), or even the entire stock market. That extreme pessimism was certainly understandable, coming as it did after a drop of nearly 60 percent in the Dow Jones Utility Average (DJUA). But it was a classic bottom sign; the DJUA went on to more than triple from the late 2002 lows. Read More
American companies have already set a new record for dividend cuts in 2009, and we still have nine months to go. In contrast, half of the regulated US utilities tracked in How They Rate have actually raised dividends since the financial crisis broke last fall, and many of the rest look set to follow suit this spring. Read More
FairPoint Communications (NYSE: FRP) eliminated its distribution last month after announcing dismal fourth quarter results. High leverage and line losses running at an annual rate of 11.7 percent are further worries cited by raters S&P and Moody’s, who put the company’s junk rating on watch for further downgrade. Read More