Catching Up (Jeff Hankins Publisher's Note)

by Jeff Hankins  on Monday, Nov. 5, 2007 12:00 am  

Let's catch up on business developments around the state:

Acxiom Corp. initiates stock buyback plan while CEO Charles Morgan explains poor earnings performance.

The market showed no excitement about the buyback last week as the stock sank even more. Investors likely couldn't get past Morgan's explanation for the 51 percent drop in second-quarter earnings, which he basically attributed to the distractions of selling the company.

Third-party lawyers, corporate finance and financial experts should have been handling the transaction while everyone else continued to focus on operations. If the entire company was distracted, then the leadership did a poor job of managing the transition period.

The bottom line right now is that 1 percent annual revenue growth for a technology company and two poor earnings reports can't excite anyone about investing in Acxiom.

Lenders in Arkansas take blows from housing and commercial real estate slowdown.

First Federal Bancshares of Arkansas Inc. of Harrison announced an 82 percent drop in earnings due to loan-loss provisions related to real estate lending. It's one of several financial institutions across the state paying the price for speculative construction projects.

A big real estate slowdown such as northwest Arkansas is enduring is always going to lead to casualties - typically developers and the financial institutions that enable them. I've heard multiple anecdotes from central and northwest Arkansas with a common theme: Lenders expand into a competitive market for a piece of the action, don't know where the skeletons are and naively take a deal other local players passed on.

No one is predicting the kinds of shutdowns or takeovers experienced by thrifts in the 1980s because of the real estate market. But we could see some bank sales triggered or the rethinking of expansions in the metro areas.

Metroplan raises the priority level for reworking the interchange at Interstates 630/430.

Sometimes I think Metroplan, the organization of central Arkansas governments that focuses on long-range transportation issues, tries to overthink issues like this and delays solutions unnecessarily. All the dreaming about a light-rail system in central Arkansas - a waste of time and energy - has cost residents hundreds of millions of dollars and hours in lost productivity time and time away from families through delays in improving major commuter routes.

We're a decade behind on the interchange project, the North Belt Loop and an additional exit off Interstate 40 for Maumelle. The intersection of Highway 10 and Interstate 430 is a mess, as is the Interstate 440 junction at Highways 67/167.

 

 

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