Closure for Apollo

The holidays weren’t the only cause celebre at Apollo Group and its subsidiary Univeristy of Phoenix this month. The company was likely also celebrating the closure of a long court battle with former employees charging the company violated a federal ban on paying recruiters based on the number of students they enroll.

Unfortunately, Apollo Group has to fork over nearly $80 million to the federal government and about $11 million more in attorney fees to two plaintiffs per a settlement reached earlier this month. But, on the bright side for Apollo, the company will likely find peace and more certainty with the lawsuit finally settled.

It’s been a rough month for Apollo and its University of Phoenix, the largest for-profit college in the U.S.  As the company was busy posting notices of its settlement and the conclusion of the court process, it was also grappling with a Maryland congressman calling for congress to look further into the situation. Rep. Elijah Cummings demanded an investigation into Apollo regarding claims it had misled students about financial aid and benefits for enrolling in the University of Phoenix.

The controversy follows a long, investigative report by ProPublica on techniques of the company’s recruiters. An Apollo spokesman has alleged the report is inaccurate and imbalanced.

Among the more than 100 media outlets covering the closure of the lawsuit and the ProPublica controversty were Bloomberg, The Phoenix Business Journal and the Arizona Republic.

Meanwhile, Apollo also recently filed its fourth-quarter earnings report, which indicated stronger-than-expected earnings. It also just elected a fourteenth member to its board of directors — Samuel A. DiPiazza, Jr., former CEO of an accounting firm called PriceWaterhouseCoopers.

PetSmart is ProfitSmart

PetSmart's headquarters in Phoenix.

PetSmart recently reported third-quarter revenue growth of 3.5 percent, from $1.25 billion the third quarter of 2008 to $1.29 billion. The company’s profits climbed 6.3 percent to $38.1 million in the third quarter, beating any analysts expectations.

PetSmart, based in Phoenix, has more than 1.000 locations nationwide.

“Our ability to deliver positive comp sales while still battling a challenging retail environment in a difficult inflationary comparison continues to show the strength of the PetSmart brand and the loyalty of our customers even in tough times,” said the company’s CEO Robert Moran in a conference call Nov. 18.

Warren Buffett snags 3.6 million shares of Republic

Warren Buffett (Bloomberg)

Warren Buffett’s company apparently sees potential in one Phoenix waste collection company. Berkshire Hathaway, a holding firm, snagged 3.6 million shares of Republic Services,which is one of the largest waste-collection companies in the U.S.

For the third quarter, Republic Services reported $120 million in net income, up 36 percent from $88 million the same quarter last year. But that includes a boost from the acquisition of Allied Waste Services.

In its most recent SEC filing, Republic Services announced it was trying to raise about $600 million through a public debt offering. The money will be used in part to finance notes due in 2013.

Profit plunge at Avnet

Avnet director Eleanor Baum sold 3,000 shares of her common stock this week.

Avnet Inc. reported both a decline in revenues and net profit for the first quarter in its 10Q released recently.

Phoenix-based Avnet, which is now in fiscal 2010, distributes electronic components and computer and storage products. It has two primary operating groups — Electronics Marketing and Technology Solutions.

 The company reported $4.36 billion in sales for the first quarter, down 3.1 percent from the same quarter last year. Its net profit declined to $50.9 million to $90.3 million during that time period, a roughly 55 percent decline.

CEO Roy Vallee said, “the impact of the global economic slowdown remained evident in our year-over-year revenue decline.”  But he also said the company’s “better-than-expected” growth rates between the fourth and first quarters gave him confidence that the business environment is improving.

Meanwhile, in a seperate filing, Avnet director Eleanor Baum let go of 3,000 of her roughly 22,000 common stock shares in the company earlier this month.

And locally, Avenet’s business-to-business softball tournament including 36 Valley businesses drew a record turnout last weekend. It was the seventh annual Avnet 16″ B2B Softball Desert  Classic.

Insight profits drop, but execs are optimistic

Glynis Bryan, CFO (Bloomberg)

The sponsor behind Insight Bowl — Insight Enterprises based in Tempe — will likely keep hold of the event’s naming rights if it’s latest financial filings are any indication.

While Insight’s revenues and profits have declined the third quarter compared with the third quarter of 2008, the company’s CFO, Glynis Bryan, says she is optimistic that structural changes Insight made this year will be effective.

While Insight let go of several company assets — including its old Web site and 240 employees — it has no plans to step out of its connection with college football.

Insight,  which offers information technology, hardware, software and services for large companies, released its third-quarter earnings report Nov. 4.

Anthony Ibarguen, interim CEO and pres. (Bloomberg)

Revenue declined 17 percent from $1.2 billion the third quarter of 2008 to $970 million last quarter. Gross profit fell 13 percent in that time period, but executives like interim president and CEO Anthony Ibarguen, said the consecutive quarter gains are likely a good sign that the market for the company’s products is improving.

“We continue to believe that hardware demand in North America is stabilizing,” Ibarguen said. “However, reduced average selling prices and competition have resulted in lower gross margins year-over-year.”

Both The Arizona Republic and The Phoenix Business Journal reported on the latest earnings and fourth quarter forecast.

Ibarguen, who has been at the helm for 50 days, said the company expects to hire a permanent CEO by the end of the year. Former CEO Richard Fennessy “left to pursue other opportunities” according to the company’s filing and was “ousted by the board of directors” according to the Phoenix Business Journal.

Insight sells about 40 percent of its products through the internet and is trying to increase those sales by revamping their Web site.

Insight Bowl will be held Dec. 31 at Sun Devil Stadium in Tempe.

Southern Copper struggling with Peru project

Southern Copper headquarters in Phoenix.

While copper prices continue to surge, some copper companies are struggling with a different resource — water.

Southern Copper Corporation, based in Phoenix, is among several copper companies with projects on hold in Peru, as farm have voted to put a halt to them out of fear of losing the water they need for agriculture. A law allowing the mining companies more say in water resource issues may take effect in January.

Southern Copper had planned a $934 million project in Peru, the third largest source of copper, that was expected to produce 120,000 tons of copper each year by 2011. The company also has mining operations in Mexico. 

Southern Copper filed its third-quarter earnings report recently, indicating its revenues and profits have slipped compared to the same quarter last year.

The third quarter of 2009 drew $1.15 billion compared to $1.44 billion in revenue that quarter last year; profits were $312 million compared to $418 million last year.

More beer and a new menu for Kona’s

Mark Bartholomay was interim CEO of Kona Grill. (Bloomberg)

For Kona’s, a wider beer selection and a menu focused on local favorites might help boost the restaurant from its profit slump.

Kona Grill, a Scottsdale-based eatery with American and international dishes, including a sushi bar, competes with P.F. Chang’s, which is also based in Arizona.

Marc Buehler will become the new CEO of Kona’s, the company announced Monday shortly after filing its third quarter earnings report. Buehler was previously CEO of LS Mangement, a private company that owned and operated Lone Star Steakhouse and Saloon. 

Mark Jundt resigned in May.  Mark Bartholomay, Kona’s Chief Operation Officer, had served as interim CEO.

Kona’s reported a net loss of $1 million for the third quarter, an improvement over the $3.9 million loss reported the same quarter in 2008. While revenue rose $3.7 million to $20.2 million, Bartholomay called the figures “disappointing.” Kona’s saw a 9.9 percent drop in same store sales.

Mark Jundt resigned as CEO of Kona Grill in May. (Bloomberg)

Kona Grill opened five new restuarants in the past year, including one in Gilbert and one in northern Phoenix.

For several months, Kona’s has been expanding its beer and wine selection, also chosen by local management. To boost its bottom line, Kona’s is rolling out a new menu this month, including a section of “local favorites” chosen by local managment. Expect prices to increase by 1.7 percent in the next year.

 As P.F. Chang’s has been aggressively cutting prices, Kona’s is planning to take a different approach — agressive advertising. The restaurant is planning to continue frequent promotions and incentives through the rest of the year.

Amkor Technology opening joint venture in Japan

 

Kenneth Joyce is CEO of Amkor. (Bloomberg)

 

Amkor Technology saw income rise but earnings drop last quarter, according to its recently released third quarter earnings report.

Net sales were down 14 percent to $616 million compared with the same quarter last year; net income during that time period rose from $29 million to $81 million.

The Chandler-based semiconductor testing and packaging company employs 20,500 people and reported nearly $2.7 billion in revenue last year. Along with Toshiba Corp. and Nakaya Microdevices Corp, Amkor is opening an assembly and testing company in Japan. The new company will be called J-Corp. and will include a $17 million investment from Amkor.

The one market you “can’t ignore.”

Freeport-McMoRan Copper's headquarters is located on Central Avenue in downtown Phoenix.

The one market you “can’t ignore?” It’s copper, according to CNN Money.

Freeport-McMoran Copper & Gold’s third quarter earnings report is among the influx of 10Qs from Arizona companies in the past week — and it’s good news for the company. The company primarily mines copper and owns mining interests in Chile and Indonesia. It’s also involved in smelting and refining copper concentrates.

The Phoenix-based copper company reported better-than-expected sales and profits on Wednesday, when the company’s stock closed at $79.72. Today, Freeport-McMoran’s stock closed at $81.35, according to Bloomberg.

A conference call with the company’s executive vice president and Chief Financial Officer, Kathleen Quirk, revealed that while demand for copper in the U.S. hasn’t seen a huge pickup, the copper business is booming in China.

Freeport-McMoran expects to reopen a copper mine just east of Phoenix in Miami, Globe, the company reported in the call on Wednesday. Resuming the mining there should add another 250 jobs in the next year.

Don’t tase my chest, bro!

Taser headquarters in Scottsdale, AZ.

As many media outlet are still following up on a reports from Taser recommending that police officer avoid the chest area when tasing people, the company was busy releasing its third quarter report.

Scottsdale-based Taser Inc., a stun gun manufacturer, posted a third quarter loss today of $3.2 million. The same quarter last year, Taser drew a $650,377 gain. Arizona Republic’s Andrew Johnson reported in  more detail about the filing.

I listened briefly to some of the conference call today regarding the third  quarter report from a Bloomberg terminal. Sounds like executives believe that Taser, the most used item on a police officer’s belt, will be in higher demand when newer models come out.