TUESDAY, JAN. 26, 2021 | IN THIS ISSUE
• Raytheon reports better than expected fourth quarter
• NewBo launches entrepreneurial development program
• Iowa's unemployment rate falls to 3.1% in December
• In the CBJ: Turning the page with new administration
• Share your derecho photos and stories with the CBJ
• Corridor events, KCRG-TV9 headlines and First Alert Forecast
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Raytheon reports better than expected fourth quarter |
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Raytheon Technologies Corp. reported better than expected fourth quarter earnings this morning, although its Collins Aerospace division continued to struggle amid ongoing tumult in the passenger aircraft industry.
The aerospace giant, which acquired Collins Aerospace and Pratt and Whitney as part of its merger with United Technologies Corp. last spring, said it had operating cash flow from continuing operations of $1.4 billion and free cash flow of $747 million, had achieved $1.8 billion in cash conservation and $700 million in cost reductions, and was sitting on a defense backlog of $67.3 billion.
"We closed the year on a strong note with fourth quarter sales, EPS and free cash flow exceeding our expectations, as we delivered on our customer commitments and drove strong execution against our cost and cash actions," said Raytheon Technologies CEO Greg Hayes in a release.
But its Collins Aerospace division continued to lag amid fall-out from the pandemic, with fourth quarter adjusted sales of just under $4.4 million, down 32% over the prior year, and a 92% year-over-year drop in operating profit. Raytheon attributed the drop to lower commercial sales volume and the impact of divesting its military GPS and space-based optical business for reconnaissance satellites as part of the merger.
In an earnings call this morning, Raytheon officials said Collins Aerospace would be making an additional $85 million in cost reductions this year, with Mr. Hayes calling 2020 among the “most challenging years for our company, the commercial aerospace industry at large and for everyone around the globe.”
Collins Aerospace, Cedar Rapids’ largest employer, has already made about $170 million in cost reductions, including almost 140 layoffs in Eastern Iowa.
As part of its full year outlook for 2021, Raytheon estimated it would have sales of $63.4 billion- $65.4 billion and an adjusted earnings per share of between $3.40 and $3.70. Raytheon officials said that as part of a $5 billion share repurchase program authorized in December, it would repurchase at least $1.5 billion worth this year.
"In 2021, our strategy of harnessing next-generation technologies across our resilient and balanced portfolio will continue to drive differentiated value for customers and advance our industry leadership for years to come,” he added. “Combined with our recent structural actions, we're well positioned for sustainable growth and profitability in 2021 and beyond, and remain committed to returning $18 billion to $20 billion to shareowners in the four years following the merger."
Raytheon shares were up about 3.6% as of mid-morning.
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NewBo launches entrepreneurial development program |
NewBo City Market in Cedar Rapids has launched The Hatchery, a new entrepreneurial development program and an expansion of the nonprofit Business Incubator, officials said in a release Monday.
The program is designed to help underserved community residents who want to start a food or retail business by reducing barriers to entry and giving them the entrepreneurial tools needed to thrive. It is an expansion of the market’s ongoing efforts to help establish and expand small, locally-owned and local product-based businesses.
Grants are available to Hatchery participants in the form of a rent discount. The program includes three main components: personalized business development guidance, vital sign check-ins and continuing business education.
The market is partnering with local business resources and organizations to provide the program’s educational aspect and to reach new entrepreneurs.
“We’re big fans of the resources that NewBo City Market provides and are very excited to see the experience amplified with the addition of The Hatchery program,” stated Scott Swenson, regional director of the Kirkwood Small Business Development Center. “It’s so important for a new business to find a great beginning for their concept. NewBo Market is an amazing place to get that start in a nurturing environment and one within reach of those wanting to pursue their passion.”
The market already has one participant in The Hatchery program, local health and beauty boutique Herbally Anointed.
“I wanted to have a personal connection with my customers,” stated owner Jessica Renee, who began bringing her products to the market for the Black-Owned Business Guest Vendor Markets. “Being here at the market has allowed me to meet so many new people and help them find what they like in my products.”
Julie Parisi, director of market operations, said she developed The Hatchery program with the hopes of reducing the barriers to entry that many local entrepreneurs face and further diversifying the market’s businesses. “We want this to be the beginning of a renaissance for NewBo City Market,” she said. “And we are so excited to help local small businesses continue to grow.”
Since opening in 2012, several businesses that began at the market have built their own brick and mortar locations throughout the Cedar Rapids and Iowa City areas, including Saucy Focaccia, Moss, That One Cupcake Place, Almost Famous Popcorn, Maggie's Farm Wood Fired Pizza, Frolics, One More Bite, Dumpling Darling and Get Fresh.
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Iowa's unemployment rate falls to 3.1% in December |
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Iowa’s seasonally adjusted unemployment rate was 3.1% in December, a drop from the November revised rate of 3.8%, Iowa Workforce Development announced this morning.
The state’s jobless rate was 2.8% one year ago. The U.S. unemployment rate remained at 6.7% in December.
"The drop in December's unemployment rate, as well as the increase of an additional 22,800 Iowans finding work, is a good sign for Iowa's economic recovery," said Beth Townsend, director of the Iowa Workforce Development, in a release. "November through February are typically the months IWD sees the most unemployment claims due to seasonal layoffs. The fact that so many people found jobs during this time is evidence that our economy remains strong and our recovery from the pandemic is on the right track.”
The number of unemployed Iowans declined to 50,800 in December – down from 60,800 in November. The current estimate is 137,200 lower than the COVID-19 peak in April of 188,000 and 1,500 higher than the year ago level of 49,300. The total number of working Iowans increased to 1,568,800 in December. This figure is 22,800 higher than November’s number of 1,546,000 and 44,200 higher than April 2020.
In December, Iowa establishments added 9,700 jobs, offsetting the loss of 6,900 jobs in November. Private industries were responsible for the growth and were fueled by an increase in retail trade. Whereas private industries have been steadily hiring, government has been slowing in recent months with job losses in each of the last three months.
Retail led all sectors with 5,400 jobs added in December. Manufacturing ended the year with 3,800 jobs gained in December. Durable goods factories showed the most promise (+2,200) and construction ended the year on a positive note (+1,500). Professional and business services also gained 1,500. Job losses in December were limited to leisure and hospitality (-3,700).
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In the CBJ: Turning the page with new administration |
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Newly inaugurated President Joe Biden will bring a host of changes to the U.S. political landscape, but don’t expect wholesale reversals of former President Donald Trump’s nationalist and protectionist trade policies, keynote speaker Gary Hufbauer told attendees of the Corridor Business Journal’s Economic Forecast Luncheon on Jan. 20.
"We think that presidents have a tremendous amount of power, and they do have a tremendous amount of power,” said Mr. Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, a private, nonpartisan organization committed to studying international economic policy. But in most cases, he said, larger market factors generally play a more significant role in the economy than political positions.
Mr. Hufbauer, the keynote speaker for the CBJ event presented by Bankers Trust with support from CLA, ITC Midwest, Marco, the Eastern Iowa Airport, Kirkwood Community College and UFG Insurance, began by describing the macroeconomic forces that determine trade balances.
Keys to the export market, he said, are growth in major economies abroad, especially Canada and Mexico, and the exchange rate of the dollar relative to other currencies.
When it comes to the import market, the major drivers are growth in U.S. gross domestic product and domestic savings investment, including what the government saves and what private firms and households invest in projects.
“That’s the big determinant,” he said, “not really the president’s rhetoric or what he wishes.
“Political rhetoric tries to tell us that by turning the dials on trade policy, the United States could greatly increase employment, particularly in manufacturing, or raise the general wage level,” Mr. Hufbauer noted. “The truth is that the connections between trade and employment and wages exist, but they’re weak – much weaker than the political rhetoric.”
Read the full members-only story in this week's print or digital editions of the CBJ.
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Share your derecho photos and stories with the CBJ |
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After sustaining the costliest thunderstorm in U.S. history this past summer, the resilient Corridor region is slowly building back, although the road ahead remains long, and its influence will be seen and felt for years to come.
The CBJ is planning a special issue in early February marking the six-month anniversary of the devastating Aug. 10 derecho, and we’d like to include your personal business story – to see and hear you’ve recovered and progressed since one of the most damaging events in the region’s history.
Specifically, we’re looking for two photos: one of your business immediately after the storm and another of what it looks like today. With your help, we’re hoping to compile a special feature documenting the business community’s ongoing progress toward rebuilding and recovery through firsthand stories.
Please send your before and after photos, along with a brief description of how the derecho impacted your business and the progress you’ve made to recover to [email protected] with the subject line “Derecho Recovery” by Jan. 29. If your photos are selected, you will be contacted by a CBJ reporter for a brief follow-up.
IMAGE: Zoey's Pizzeria was one of scores of businesses damaged in the Aug. 10, 2020, derecho. The restaurant, located at 10th Street and Seventh Avenue in Marion, has since completed repairs and reopened for dining. CREDIT ZOEY'S
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Connect with the CBJ
The CBJ’s mission of informing and connecting the Corridor’s business community is more important than ever. Our news operations will continue researching and reporting on the impacts of the COVID-19 pandemic through our multiple distribution channels. Here’s how you can connect with us today and moving forward:
- You can reach our newsroom directly with leads, updates, cancellations, etc. at [email protected].
- Our comprehensive, deep-dive content continues in our weekly CBJ. If you are not a digital subscriber, you can sign up here.
- Our daily news coverage solution is spread throughout the week with our free e-newsletters. If you have not already signed up, you can do so here.
- Updated coronavirus information will also be published on our website, corridorbusiness.com/latest-coronavirus-updates, and through our Facebook, Twitter and LinkedIn channels.
- All of our staff members remain available to assist you. You can find our full contact information at www.corridorbusiness.com/cbj-contact.
Remember: Subscribers can access the digital CBJ anytime and anywhere. Don't remember your password? Please email [email protected] for a password reset.
The CBJ print subscribers can also temporarily have the CBJ mailed to their home. To temporarily switch your address, please send your full temporary mailing address to [email protected]. Please include start and stop dates for the temporary address.
Thank you for your continued support of the Corridor Business Journal.
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Short Term Event Planner
Jan. 27
1 Million Cups, by 1MC Cedar Rapids, 8:30 a.m., online. Join for community connections and presentations by entrepreneurs, established companies, experts and more. Free. For more information, visit facebook.com/1MCICR.
1 Million Cups, by 1MC Iowa City, 9 a.m., online. Join for community connections and presentations by entrepreneurs, established companies, experts and more. Free. For more information, visit facebook.com/1MillionCupsIC.
Provider Relief Funds: Key Updates and What You Need to Know to Successfully Report, by CLA, 10-11 a.m., online. Learn the information you need to know on provider relief funds overall, key elements that changed over the past month and what future single audit requirements may include. Free. To register, visit bit.ly/3bCk9sk.
Jan. 28
Cedar Rapids Metro Economic Alliance Annual Meeting, by Economic Alliance, 11:30 a.m.-1 p.m., online. Hear the organization’s goals for the year and celebrate achievements. Speakers include Economic Alliance Board Chair and President of Skogman Realty Chris Skogman; Vice Chair and CFO at Collins Aerospace Tatum Buse; Economic Alliance Executive Director Doug Neumann; and Economic Alliance staff and member businesses. Cost: $25. To register, visit bit.ly/2L2qHG2.
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These news items are provided by KCRG-TV9
A crash involving multiple vehicles closed the westbound lanes of Interstate 80 last night, according to officials. The Iowa Department of Transportation reported the crash. Traffic cameras showed emergency vehicles helping to clear the scene, with at least one semi-truck on its side in the median. The westbound lanes were closed for a period of time after the initial report of the crash. No further details regarding the number of vehicles or any injuries were available.
Cedar Rapids Mayor Brad Hart announced he is launching his campaign for re-election this November. In his announcement, Hart outlined five priorities for Cedar Rapids in a second term. He wants to support citizens and businesses recovering from the derecho, and he wants to bring additional investments and high paying jobs to the city. Hart also cites street repair, supporting the police and fire departments as other priorities. The mayor also lists continuing to build permanent flood protection. He was first elected in December 2017.
These news items are provided by KCRG-TV9
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Your KCRG-TV9 First Alert Forecast |
Snowfall amounts will exceed six inches in some areas with less to the north. Winds higher than 30 mph will bring an area of blowing and drifting snow. Travel will be impacted through Tuesday afternoon. A chance from some lighter snow moves in again Wednesday morning followed some cold air with lows by Wednesday night dipping below zero. The next storm to come moves in for the weekend, looking like a wintry mix at this point. |
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