Christ Hospital is buying Kenwood-based Midwest Ultrasound Inc.
The sale is expected to be complete on June 30. Terms of the deal were not disclosed.
Midwest Ultrasound, which started in 1983, providing diagnostic ultrasound services in partnerships with hospitals and large physician practices.
"Midwest Ultrasound is a well regarded company with a strong reputation for excellent patient care" Christ CEO Susan Croushore said in a press release.
"Our collaborative spirit and shared mission to improving care in this community strengthens available services and introduces greater capacity of care in the region. We look to provide better access and more convenience for our patients and customers. This acquisition gives us the flexibility to more easily adjust to market growth and to better accommodate those we serve."
Midwest Ultrasound manages more than 25 regional vascular, cardiac and general ultrasound labs. It has more than 80 employees.
"We are delighted to work with the Christ Hospital, who we know will continue to provide the community with much-needed, and the highest-quality cardiac and vascular ultrasound services," said Dr. Peter Podore, CEO of Midwest Ultrasound.
New Zealand's annual current account deficit narrowed less than economists forecast in the year ended March as payments to foreign investors accelerated, countering a gain in butter and cheese exports.
The gap shrank to NZ$13.79 billion ($10.5 billion) in the 12 months ended March 31 from NZ$13.84 billion in the year through December, Statistics New Zealand said in Wellington today. The median estimate of 12 economists surveyed by Bloomberg News was for a NZ$13.32 billion shortfall.
Prices for dairy products, which make up a fifth of New Zealand's exports, rose 20 percent in the first three months of the year, helping the annual trade deficit narrow to the lowest in almost four years. Economists say the rising cost of imported oil and falling farm production because of a drought may boost the deficit this year, increasing foreign debt.
“In a world of lower risk appetite, New Zealand's current account balance remains uncomfortably high,'' said Jason Wong, director of strategy and research at First NZ Capital Group in Wellington. “The large deficit will continue to remain a source of downward pressure for the currency for some time yet.''
New Zealand's dollar fell to 75.66 U.S. cents at 11:45 a.m. in Wellington from 75.92 cents immediately before the report.
Broadest Measure
The annual deficit narrowed to 7.8 percent of gross domestic product from 7.9 percent in the year through December, the statistics agency said. Economists expected a shortfall equivalent to 7.5 percent of GDP.
By comparison, Australia's current account deficit was 6.5 percent of GDP at March 31.
The Reserve Bank of New Zealand this month forecast the deficit would be 7.6 percent of GDP in the year ended March. It says the gap will widen to 9.4 percent by March 2009.
The current account is the broadest measure of trade because it incorporates tourism and investment income. A large deficit needs to funded by borrowing from overseas, which could cause the nation's currency to fall.
The trade deficit narrowed to NZ$1.75 billion in the 12 months March 31 from NZ$2.39 billion in the year through December, today's report showed. That's the smallest gap since the year ended June 30, 2004.
Dairy Exports
First-quarter merchandise exports gained 20 percent from a year earlier and imports rose 12 percent. Dairy exports rose because of higher prices, the statistics agency said. Imports jumped as soaring crude oil prices increased the value of fuel purchases.
While the trade gap narrowed, the deficit on investment income, which makes up most of the current account, widened and the surplus on services, which includes spending by overseas visitors, shrank.
The deficit on investment income widened amid increased payments to foreign owners of assets such as the Tui oil field, which began production in July. Tui is 42 percent owned by Sydney-based Australian Worldwide Exploration Ltd. and 35 percent owned by Japan's Mitsui & Co. Foreign investors owned 77 percent of New Zealand government bonds on issue at May 31.
The annual deficit on investment income widened to a record NZ$13.12 billion from NZ$12.44 billion in the year through December. Foreign investors earned more from their local subsidiaries and their holdings of stocks and bonds, outpacing income earned by New Zealanders investing offshore.
About 90 percent of profits earnings by foreigners were paid overseas rather than reinvested in New Zealand, compared with 64 percent in the year to March 2007, the agency said.
Economists prefer to watch a rolling annual current account balance than the quarterly deficit, which can be volatile.
In the three months ended March 31, the current account deficit narrowed to NZ$2.16 billion from NZ$2.21 billion a year earlier. Economists forecast a NZ$1.7 billion gap.
An analyst upgraded J.C. Penney Co. Monday, saying the retailer’s valuation and recent sales improvement make shares a good investment.
Deutsche Bank analyst Bill Dreher Jr. boosted his rating to "Buy" from "Hold" and his price target to $46 from $45. The new target implies he expects the stock to rise 25% over Friday’s $36.88 close.
Sales appear to have improved at the Plano, Texas-based company recently, though it’s not clear if this is due to seasonally warmer temperatures or the federal stimulus program, Dreher said.
So far this year, the stock has dipped about 16%, compared with a 10% drop in the S&P 500.
"We recommend purchase of J.C. Penney shares as a value story, with a compelling risk/reward profile," he said in a note to clients.
Dreher boosted his fiscal 2008 earnings estimate to $3.33 from $3.32 per share. Analysts polled by Thomson Financial expect, on average, earnings of $3.28 per share for the year.
A representative for J.C. Penney (JCP, Fortune 500) was not immediately available for comment.
There was plenty of intrigue this week in the news that Hearst chief executive Victor Ganzi is stepping down from his post, citing "irreconcilable differences" over policy with the company’s board of trustees after six years on the job. Sure, it seems like CEO posts - in media and elsewhere - are highly precarious these days, but there was no glimmer of unrest at Hearst, which Ganzi, who served as CEO since 2002, joined 18 years ago.
Indeed, the company just published a glossy annual review in which Ganzi boasted that Hearst had achieved record revenues and operating cash flow in 2007. By Thursday morning, the Hearst corporate Web site had been revised. If you downloaded said annual review, Ganzi’s eight-page intro recounting last year’s performance and pledging to "endeavor to achieve the best results possible" in 2008 was as gone as he was.
In a few ways, Hearst is a singular enterprise among big American media giants. For one thing, the 121-year-old Hearst is the legacy of press baron William Randolph Hearst, who died in 1951 and, for all his ego and flair, might not have imagined that the company would be as vast as it is today, with magazines like Cosmopolitan, Good Housekeeping and Esquire, newspapers like the San Francisco Chronicle and Houston Chronicle, a passel of TV stations, and a business information division. And unlike Hearst’s original publishing business, today’s version is far more diverse and international and derives the majority of its estimated $1.5 billion in operating profits (on revenues near $8 billion) from big stakes in cable channels like ESPN, Lifetime, and Arts & Entertainment.
The other curiosity about Hearst is that it’s private - which isn’t just to say that it’s privately owned, but that its highest echelons have the mystique of a kind of secret society. And one of the qualities of this society is that its members don’t leave. This culture stems from the trust that The Chief, as William Randolph Hearst was known, set up. The trust is basically run for the benefit of heirs who The Chief would never know; it’s meant to dissolve when the last remaining Hearst who was alive when he died passes on - actuaries hired by the company have pegged that at 2045.
Today, there are some 60 beneficiaries, but Hearst wanted the trust in the care of non-family members. Of 13 trustees, his will mandated that eight of them are non-family. Accordingly, most of the current trustees are current and former Hearst managers, and the board of trustees oversees a separate 19-member corporate board. Although Ganzi is stepping down as both CEO and a director of Hearst, he remains, for now, a trustee - an appointment that is usually for life. If he leaves the trust, that would mark how truly unusual his departure is.
Another trustee is Frank Bennack Jr., Hearst’s vice-chairman and Ganzi’s predecessor as CEO for a 23-year-run during which some of the company’s game-changing investments in cable channels were hatched. Bennack, who is 75, is taking over as CEO while a search committee is formed to find a replacement for Ganzi. Even in retirement, Bennack has been a big presence at Hearst - in addition to hand-picking Ganzi, a lawyer who joined the company in 1990, both men played a big role in the building of the refulgent Hearst Tower that the company paid $500 million in cash to construct in midtown Manhattan.
When I wrote a story about the tower before it opened in 2005, it was Bennack who proudly gave me a tour, while Ganzi (typically) stayed out of the media glare. One of the inferences of Ganzi’s departure is that the differences in policy he had with his fellow trustees were at least partly the consequence of how he differed from Bennack. Unlike his predecessor, Ganzi did not come up through the newspaper and broadcast industries, and was not seen as having the ground level understanding of them that Bennack did. On the other hand, Ganzi - or Vic, as he is known at Hearst - delivered record numbers in each of his years at the helm and had a savant’s capacity for taxes, finance, acquisitions and more.
So what were these policy differences? Typical of Hearst, neither Bennack nor Ganzi would come to the phone. It’s easy to say that perhaps the trust lost confidence in Ganzi’s faith in the challenged newspaper business, which included buying a minority stake and rights for control in Dean Singleton’s MediaNews chain a couple of years ago.
But people internally say that wasn’t the issue. One might also question whether Ganzi’s approach to the Internet and digital businesses writ large - which has largely taken the form of minority portfolio investments in a variety of smaller companies - was sage. Then again, what media company would you say has conquered the web? The biggest deals done under Ganzi’s watch, besides MediaNews, were a stake in the Fitch bond rating service (also with rights to one day buy control) and the building of the Hearst Tower, which the company would argue has been both good for business and a smart investment. The best sense from people close to Hearst that I got was that, despite these moves and more, Ganzi’s plan for how to continue growing the company left his colleagues tepid.
So who in their right mind would want a job in which six years of record results isn’t enough to keep your job? This being the storied, mysterious Hearst - plenty of people, no doubt, both inside and outside of Hearst. Among those who would logically be seen in the running are Cathleen Black and David Barrett, who run Hearst’s magazine and television businesses respectively. (Barrett, unlike Black, is a Hearst trustee.)
One person who will be closely watched is James Asher, the company’s senior vice-president, who worked closely with Ganzi. Another name worth mentioning is Steven Swartz, the second-in-command in the newspaper division who is well regarded at the company and further from retirement than Barrett or Black - but perhaps is more logical as a second-in-command candidate. A Hearst spokeswoman said nothing has been decided yet and the search is only beginning. The only certainty is that Bennack will be back in the saddle until the trustees find another person who they think can fill his rather large shoes.
If relief was the first emotion the would-be buyers of BCE Inc (BCE.TO: Quote, Profile, Research, Stock Buzz) (BCE.N: Quote, Profile, Research, Stock Buzz) felt after Friday’s court decision allowing the $34.1 billion deal to proceed, anxiety may have been the second.
That’s because questions remain about whether the deal will now go through and, if so, at what price.
Pinning down final financial terms for the deal — with a June 30 deadline looming and credit markets tight — could still create trouble for the world’s biggest leveraged buyout.
The deal may be renegotiated at a lower price or may even fall through if the banks that committed to financing the debt portion and the private equity buyers of BCE, Canada’s largest telecommunications company, are unable to reach an agreement.
“In this credit market, that’s a hell of a lot of financing that has to happen and (whether the deal will get done) is a big question mark,” said Marshall Sonenshine, chairman of New York-based investment bank Sonenshine Partners.
“Nobody should be cavalier in this market about predicting the completion of a $34 billion deal,” he said.
The once-frothy leveraged buyout market was knocked out cold by last summer’s subprime mortgage contagion, which eventually killed investor appetite for the high-yield loans and bonds used to finance such deals.
Wall Street banks were thus stuck with billions of dollars in leveraged loans and forced to write down the value of loans in a number of leveraged buyouts, leading to tension between them, the private equity buyers and target companies.
Industrial production dipped in May, underscoring the strain on factories from the deep housing slump.
The Federal Reserve reported Tuesday that output at the nation’s factories, mines and utilities fell 0.2% in May, following a 0.7% decline in April.
The latest report on manufacturing activity disappointed economists. They were forecasting a 0.1% rise in overall production.
Lehman Brothers’ startling $2.8 billion loss kept jittery investors on edge this week. But the latest results from two of Lehman’s biggest rivals next week are likely to be more pleasing to Wall Street.
Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) are widely expected to post much better fiscal-second quarter results than Lehman, with both companies reporting a profit.
"I wouldn’t read through Lehman to the rest of the group," said Bill Andrews, a portfolio manager for the Pittsburgh-based money manager C.S. McKee.
Still, even though Goldman and Morgan may avoid reporting any big bombshells, analysts have steadily cut their earnings estimates for the two venerated Wall Street firms over the past month.
According to consensus estimates from Thomson Reuters, earnings for Goldman, which will report on Tuesday, are expected to fall more than 30%. Analysts expect Morgan Stanley’s profits to plunge nearly 60%, when it releases its results on Wednesday.
The month of March was one of the more tumultuous periods of the credit crunch for the entire financial services sector, as evidenced by the drastic collapse of Bear Stearns.
While credit and financial markets have improved since then, investment banking activity remains quite sluggish, eliminating a key source of revenue for both Goldman and Morgan Stanley.
What’s more, the results from Lehman (LEH, Fortune 500), which will officially report its full quarterly results next Monday, show that investment banks still have plenty of risky assets on their balance sheets that need to be marked down.
As the housing market continues to suffer and buyout activity remains at a standstill, there runs a risk that Goldman and Morgan could take additional writedowns on their real estate portfolios and leveraged loans.
"In general [we will see] smaller writedowns, but I expect them to continue," said Matt Albrecht, an equity analyst for Standard & Poor’s.
One new wrinkle this quarter is that the hedging strategies investment banks used previously to help insulate their results appear to be providing little protection.
That hurt Lehman when it pre-announced its results earlier this week and could very well impact Morgan Stanley’s as well, as it has tried to hedge its exposure to commercial real estate.
One item industry observers will be closely monitoring is the two firms’ Tier 1 capital ratios. This quarter marks the first time that Wall Street’s investment banks have disclosed this key metric, which is widely considered to be a measure of a bank’s ability to absorb losses.
If Goldman and Morgan report capital levels approaching 8% or higher, that could do a lot to soothe investors who are worried about the outlook for the investment banking sector.
In addition, the top executives at both Goldman and Morgan will most likely offer a "glass half-full" tone during their conference calls, suggesting that the worst of the ongoing turmoil is now in behind them.
But investors are increasingly growing weary of writedowns and promises of better times ahead. Shares of Goldman and Morgan have fallen 26% and 55% respectively over the past year.
What’s more, there are fears that the old way of doing business on Wall Street is nearing extinction - investment banks are relying less on leverage to boost their returns and have been cutting jobs to deal with the credit crisis.
Wall Street firms also now face the threat of greater regulatory oversight after the Federal Reserve decided to open its discount lending window to prevent failure among investment banks.
"How do you take old business models and adapt them?" asked Len Blum, managing director of the boutique New York City-based investment bank Westwood Capital. "That is what certain financial firms still have not addressed."
It remains to be seen whether Goldman or Morgan Stanley will address this issue next week.
Google Inc. Chief Executive Eric Schmidt said Wednesday that the Internet search leader hopes its recently acquired advertising service DoubleClick will aid newspapers as they struggle to corral more online revenue.
"It’s a huge moral imperative to help here," Schmidt said during a question-and-answer session at an event hosted in San Francisco by Syracuse University’s Newhouse School of Public Communications.
Without providing specifics about how it might be accomplished, Schmidt said DoubleClick’s system for serving up online display ads could generate "significant" revenue online for newspapers.
Still, he acknowledged the boost probably won’t be enough to restore the hefty profit margins that newspaper publishers historically have enjoyed from print advertising.
Mountain View, Calif.-based Google completed its $3.2 billion acquisition of DoubleClick in March, after an extensive antitrust review that focused on whether the deal would give the combined entity too much power over the $40 billion online ad market.
Google (GOOG, Fortune 500) also has a financial incentive to bolster newspapers because the stories, pictures and other content that they distribute online creates more opportunities for the company to make money from short advertising links that appear on millions of Web pages each day.
But footing the bill to gather news and other information has become a more daunting task in recent years, as advertisers have shifted more of their budgets to the Internet in an effort to connect with consumers who are increasingly eschewing traditional media.
The shift has been particularly painful for newspapers, which have been laying off hundreds of workers and trimming other costs as their revenue crumbles.
Newspaper publishers also are boosting their online revenue, but so far those efforts haven’t been nearly enough to offset the decline in print advertising. Last year, for instance, the U.S. newspaper industry’s overall ad revenue fell by 8% to $45.4 billion, according to the Newspaper Association of America.
Meanwhile, Google’s revenue last year rose 56% to $16.6 billion, widening the company’s lead as the Internet’s most profitable business.
In other comments, Schmidt reiterated his belief that advertising on mobile devices eventually will emerge as Google’s biggest source of profits. The company hopes to be in a better position to deliver ads to people on the go during the second half of this year, when it’s scheduled to unveil its new mobile-software package, called "Android."
Google’s plans to make Android available to wide variety of mobile handsets have caused conflicts for Schmidt in his role as a director of Apple Inc. (AAPL, Fortune 500), which makes the popular iPhone. Schmidt said he has had to excuse himself from "one or two" Apple board meetings involving the iPhone, which he said currently accounts for a "vast majority" of mobile traffic on Google’s search engine.
Merrill Lynch (MER.N: Quote, Profile, Research) CEO John Thain said that the world’s largest brokerage would consider selling its stakes in news and financial data company Bloomberg and money manager BlackRock (BLK.N: Quote, Profile, Research) if it needed more capital.
Speaking on a conference call, Thain said that he sees Merrill Lynch as “well capitalized,” but added that the company last year considered selling its roughly $13 billion stake in BlackRock or its roughly $5 billion to $6 billion stake in Bloomberg.
Thain has never before said that Merrill Lynch would consider selling its stake in Bloomberg or BlackRock, and his willingness to shed some of the firm’s strongest assets signal how difficult capital raising has become for investment banks.
“We will…figure out what makes the most economic sense for us, if we need to raise capital,” Thain said.
Merrill Lynch raised more than $12 billion from a series of large outside investors, including sovereign funds such as Singapore’s Temasek Holdings and the Kuwait Investment Authority, in December and January. Those capital raises came as the bank recorded more than $30 billion of writedowns in recent quarters.
The company’s shares have fallen by about a third since that last round of capital raising, which would make issuing equity more expensive than it had been.
But another factor would also make issuing common shares costly for Merrill: investors who gave money to Merrill in December and January must receive extra compensation if Merrill raises additional capital at too low a price.
An analyst estimated that if Merrill wanted to raise $1 billion of new capital by issuing stock, it would have to raise a total of $2.7 billion because of the compensation for prior investors.
Emerging markets such as China have been lucrative regions to invest in over the past several years. Now, their cities are becoming some of the world’s major centers of commerce, according to MasterCard data.
London and New York are still the top two global centers of commerce, according to MasterCard Inc.’s second annual index of worldwide centers of commerce released Sunday. But Asian cities are gaining ground - and not just Tokyo, which ranks third for the second year.
The city posting the most notable jump was Shanghai, which advanced to No. 24 from No. 32 on last year’s list.
The Chinese city’s rise "represents a return to its historic role in Asia," noted economist Michael Goldberg, the study’s director. Shanghai was a dominant commercial center in Asia before World War II.
Other Chinese cities comprising the top 75 global centers of commerce are Beijing, as well as Shenzen, Chengdu, and Chonqing - the three of which were added to the list this year. Another Asian city climbing up the ranks was Singapore, which rose to No. 4 from No. 6, joining Tokyo, Hong Kong and Seoul among the Asian cities in the top 10.
Some U.S. cities that dipped in the rankings included Los Angeles, to No. 17 from No. 10; Boston, to No. 21 from No. 13; Atlanta, to No. 25 from No. 20; San Francisco, to No. 28 from No. 18; and Miami, to No. 29 from No. 21.
MasterCard Worldwide’s index ranks cities by measuring five dimensions: legal and political framework, economic stability, ease of doing business, financial flow, business center, knowledge creation and information flow, and livability.
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