More financial news
U.S. GDP up 2.8 percent
The U.S. gross domestic product increased 2.8 percent during the fourth quarter of 2011, according to the U.S. Commerce Department. That is the largest increase in U.S. GDP since the second quarter of 2010, and an improvement on the 1.8 percent GDP growth in the third quarter of 2011.
For all of 2011, U.S. GDP was up 1.7 percent, down from a 3 percent increase for all of 2010.
Fiserv housing index: Milwaukee area market to stabilize
Brookfield-based Fiserv Inc.’s Case-Shiller Index indicates that home prices in the metro Milwaukee area will flatline this year, predicting a 0.0 percent increase from the third quarter of 2011 to the third quarter of 2012.
That would be significant, because the area’s home prices fell 11.9 percent from the third quarter of 2008 to the third quarter of 2011, including a 3.1 percent decline from the third quarter of 2010 to the third quarter of 2011.
Nationally, the Case-Shiller Index predicts prices will fall 2.7 percent from the third quarter of 2011 to the third quarter of 2012, after falling 13.4 percent from the third quarter of 2008 to the third quarter of 2011.
Then the index predicts the national housing market will have a 3.8 percent price increase from the third quarter of 2012 to the third quarter of 2013.
Current U.S. home prices are now 33 percent below this 2006 peak.
Over the past year home prices fell in 337 of the 384 metro areas tracked by Fiserv Case-Shiller.
“While prices continued to fall in most markets, sales activity picked up at the end of 2011, setting the foundation for price stabilization in 2012,” said David Stiff, chief economist at Fiserv. “We stand by our projection that average U.S. home prices will move sideways in 2012.”
Broadband investments growing in Wisconsin
Wired Wisconsin’s Broadband and Wireless Investment and Jobs Tracker is reporting significant high-tech development to end 2011, with investments deployed in all areas of the state.
“These investments improve broadband access in Wisconsin, are proof of further economic investment and provide needed job creation for the state,” said Thad Nation, executive director of Wired Wisconsin. “We know that broadband investments result in positive change for Wisconsin’s economy.”
Wired Wisconsin established the Broadband and Wireless Investment and Jobs Tracker as a way monitoring the ongoing telecommunications investments being made in Wisconsin. Tracking started in July 2011, and from July through December, 28 projects were deployed around the state, with a total estimated investment value in excess of $20 million and the creation of nearly 1,000 jobs.
Much of Wisconsin’s fourth quarter 2011 investment, from October through December, was focused on upgrades to existing cell towers and in the development of new tower sites. During this period, 17 projects were deployed, resulting in a total estimated investment of $7.67 million and the estimated creation of 384 jobs.
During the first reporting period, from July through September, 11 projects were deployed throughout Wisconsin, resulting in a total estimated investment of $12.08 million and the creation of 604 jobs.
“Our modernized telecom statutes have increased Wisconsin’s competitiveness in securing new investments and job growth,” Nation said. “This on-going private-sector investment is exactly what Wisconsin needs to move forward, and we look forward to additional growth in 2012.”
MGIC is still in the red
MGIC Investment Corp. reported a fourth quarter net loss $135.3 million, or 67 cents per share, compared with a net loss of $186.7 million, 93 cents per share, in the same period a year ago.
The Milwaukee-based company’s net loss for the full year was $485.9 million, compared with a net loss of $363.7 million for the full year 2010. For the full year 2011, diluted loss per share was $2.42 compared to a diluted loss per share of $2.06 for the full year 2010.
Total revenues for the fourth quarter were $447.0 million, compared with $361.1 million in the fourth quarter last year.
Net premiums written for the quarter were $263.8 million, compared with $271.4 million for the same period last year. Net premiums written for the full year 2011 were $1.064 billion, compared with $1.102 billion for the full year 2010.
Curt Culver, chief executive officer and chairman of the board of Mortgage Guaranty Insurance Corp. (MGIC) and MTG, said the company has successfully completed its discussions with the Office of the Commissioner of Insurance for the State of Wisconsin (OCI), Fannie Mae and Freddie Mac to receive the necessary waivers and approvals that allow for the continuation of the company’s strategy to write new business through a combination of MGIC and, as it is needed, its wholly owned subsidiary, MGIC Indemnity Corp. (MIC).
Northwestern Mutual to pay out nearly $5 billion in dividends
Milwaukee-based Northwestern Mutual Life Insurance Co. announced that it is increasing the amount of dividends expected to be paid to its participating policy owners this year to $4.97 billion.
The company’s dividend payout will include a dividend scale interest rate of 5.85 percent on unborrowed funds for most permanent life insurance products. The company said that it expects again to lead the U.S. insurance industry by a wide margin in total life insurance, long-term care and disability insurance dividends paid.
The company’s total surplus, a combination of surplus and asset valuation reserve, increased by $527 million during 2011 to $18.2 billion at the end of 2011, a company record.
The company reported net income of $645 million for 2011, down 14.7 percent from 2010 net income of $756 million. The company’s total revenues increased by 2.1 percent in 2011 to $23.6 billion.
"Considering the difficult economic environment, this past year’s financial performance was very good," said John Schlifske, chairman and chief executive officer of Northwestern Mutual. "Our primary financial objective is to balance great product value with unquestionable financial strength. That’s just what we delivered again in 2011. In this environment. It is no small feat to simultaneously pay near-record dividends while adding to our already substantial capital base."
Northwestern Mutual’s financial representatives sold 350,000 new insurance policies during 2011, the highest number of new policies since 1993.
"The surge in the number of new policies, when combined with our incredible customer loyalty rate, reflects the fact that our financial representatives help their clients plan for financial security in relevant and meaningful ways," said Schlifske. "While I don’t think the economy is out of the woods yet, we remain well-positioned for whatever lies ahead."
A.O. Smith continuing operations post big gains
Milwaukee-based A. O. Smith Corp. reported earnings of $111.2 million, or $2.39 per share, from continuing operations for 2011, a 95 percent increase from earnings for those operations in 2010.
The company had sales of $1.71 billion in 2011, up 15 percent from $1.49 billion recorded in 2010.
The recently acquired Lochinvar business added $75.9 million to sales, and sales of A. O. Smith branded products in China grew 29 percent to approximately $370 million for the year.
Higher commercial water heater volumes in North America also contributed to higher sales, the company said.
"The A. O. Smith team did an excellent job of achieving record performance in a less than ideal economy," said Paul W. Jones, chairman and chief executive officer. "Our acquisition of Lochinvar is achieving all that we expected, our growth in China continued at the high end of our expectations, and we are delighted with the acceptance of our products and growth in India. As a result, we were able to overcome global economic headwinds to achieve record earnings from continuing operations for the fifth time in the last six years."
Briggs & Stratton swings to profit but will close some plants
Wauwatosa-based Briggs & Stratton Corp. announced 2012 fiscal second quarter net income of $2.7 million, a major improvement from a $1.25 million loss in the previous fiscal year’s second quarter.
However, the company also said that its net sales dipped for the quarter from $450.3 million to $447.9 million.
"The economic environment and the levels of consumer spending for outdoor power equipment continues to be challenging in the United States and in Europe," said Todd Teske, chairman, president and chief executive officer. “Since 2004, the U.S. lawn and garden market has declined over 33 percent. This significant and prolonged market decline is unlike any other this industry has seen in decades. We continue to execute our strategy of diversifying our product portfolio and seeking growth in other regions of the world."
Also, the company said that it will close its Newbern, Tenn. Facility and move work from there to its McDonough, Ga. facility. The Newbern, Tenn. facility currently manufacturers walk behind lawn mowers and snow throwers for the U.S. domestic market. The closure of the Tennessee plant will affect 240 regular employees and 450 temporary employees.
The company said it will also close its Ostrava, Czech Republic plant, shifting production to its Murray, Ken. facility. The Ostrava, Czech Republic facility currently manufactures small engines for the outdoor power equipment industry. The closing of the Ostrava, Czech Republic facility will affect approximately 77 regular employees
Also, the company said it will continue reducing capacity by reconfiguring and idling certain assets at its Poplar Bluff, Mo. facility. The company does not anticipate significant employment changes at its Poplar Bluff facility.
"We continually evaluate our manufacturing footprint as we consider productivity and efficiency gains along with changes in the markets we serve,” said Teske. “The actions announced today to consolidate our manufacturing footprint further, will better align our production capacity to the markets we serve. It was a very difficult decision to close these production facilities. However, these changes are a necessary step in executing our strategy to grow the profitability of our business and invest our resources in high margin and margin expanding areas. We will make a dedicated effort to minimize the impact of these closings on our employees and the surrounding communities."
Rockwell first quarter profit up 22 percent
Milwaukee-based Rockwell Automation Inc. reported first quarter net income of $183.3 million, $1.27 per share, up 22 percent from fiscal 2011 first quarter net income of $150.1 million, or $1.04 per share.
The company’s first quarter net sales were $1,473,900,000, up 8 percent from $1,365,800,000 in the first quarter of fiscal 2011.
“We had great earnings growth on good sales growth in the quarter,” said Keith D. Nosbusch, chairman and chief executive officer. “In this macroeconomic environment, I am pleased with the solid start to the fiscal year. With one quarter behind us, and given our current assessment of global economic and market conditions, we are not changing our sales outlook for the year. Based on fiscal 2012 projected sales of $6.2 billion to $6.5 billion, we are reaffirming our fiscal 2012 earnings per share guidance of $5.05 to $5.45. Although we may see uneven results throughout the year, sales and earnings in our guidance range would represent another record year for the company.”
Restructuring helps Harley profits soar
With a boost from restructuring, including lower labor costs, Harley-Davidson Inc. reported that its fourth quarter net income soared to $105.7 million, or 24 cents per share, compared with a net loss of $46.8 million, or 18 cents per share, in the same period a year ago.
Retail sales of new Harley-Davidson motorcycles grew 10.9 percent worldwide in the fourth quarter compared to the prior-year period, including an 11.8 percent increase in the United States. For the full year 2011, new Harley-Davidson motorcycle retail sales rose 5.9 percent worldwide and 5.8 percent in the United States.
In 2011, the Milwaukee-based company realized cumulative savings from restructuring activities initiated since early 2009 of $217 million. Upon completion, Harley-Davidson continues to expect restructuring activities to generate annual ongoing savings of $315 million to $335 million, beginning in 2014. For the full year 2011, Harley-Davidson incurred one-time restructuring costs of $68.0 million. The company now expects all restructuring activities initiated since 2009 to result in one-time overall costs of $500 million to $520 million through 2013, including $50 million to $60 million in 2012, a $5 million reduction to the range previously provided.
"Our improved performance in 2011 is the result of the tremendous efforts of all of our employees, dealers and suppliers," said Keith Wandell, president and chief executive officer of Harley-Davidson.
"Harley-Davidson is all about fulfilling dreams through remarkable motorcycles and extraordinary customer experiences. In 2011 we made strong progress at transforming our business to be more agile and effective than ever at exceeding customer expectations," Wandell said. "The changes underway across the organization will enable Harley-Davidson to be world class and customer led like never before, with shorter product development lead times, flexible manufacturing and an unmatched premium retail experience. At retail, we believe the solid improvement in new Harley-Davidson motorcycle sales reflects the strong appeal of our product lineup to a diverse customer base and the great efforts of our dealers, combined with results from our investments in growth opportunities across all regions and improved consumer confidence in the U.S. While we are encouraged by the retail sales trend, we continue to keep a close watch on the marketplace and remain cautious in our expectations for 2012.”
Harley-Davidson expects to ship 240,000 to 245,000 motorcycles to dealers and distributors worldwide in 2012, a 3- to 5-percent increase from 2011. In the first quarter of 2012, the company expects to ship 58,000 to 63,000 motorcycles.
First Bank donates to Oconomowoc Historical Society
First Bank Financial Centre has donated $1,000 to the Oconomowoc Historical Society, which it feels is a needed facility in the Oconomowoc community. The OHS, founded in 1926 with one archeological collection, now has about 20,000 individual artifacts and archives.