by Jeff Hankins
Posted 11/5/2007 12:00 am
Updated 2 years ago
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.
Lt. Gov. Bill Halter reworks lottery proposal.
As much as I would like to see more money for higher education and scholarships, I can't get excited about a lottery for Arkansas.
Two years ago, I wrote a column (visit www.arkansasbusiness.com/jefflottery) based on a study about lotteries by Tom Garrett of the Federal Reserve Bank at St. Louis. The results make a strong case against Arkansas pursuing this means for more revenue. Revenue levels are volatile, there's more competition for gambling dollars and the total payout rate is substantially lower for lotteries than for casinos.
Feasibility study approved to determine whether the River Rail system should be extended to Little Rock National Airport.
Prior to construction of the existing rail in downtown Little Rock and North Little Rock, I was open to the concept of including the airport in the master plan. Now I say forget about it.
The River Rail is a tourist attraction at best. It's useless for anyone other than tourists to get around downtown in a timely fashion.
When you can get from the airport to a downtown hotel by cab in 10 minutes or less, there's no justification for a rail connection. Let's save travelers from the lovely scenery of east Little Rock, let the federal dollars go toward some other pork project and put whatever local matching funds would be used into county jail operations.
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