Stocks That Are Pillars of Alabama’s Economy — Some Solid, Some Shaky
Publicly traded companies — home-based and out-of-towners — play a crucial role in keeping Alabamians at work, with the biggest 25 combining for a total of nearly 40,000 jobs
A steelworker tends a blast furnace at USS in Fairfield, where 574 workers were called back in June, after a layoff of 779.
Photo by Edgar Thompson
Here’s a look at the 25 public companies employing the most Alabamians. First are five that have had big news — United States Steel Corp., ADTRAN Inc., Constellium, Walter Energy and CPSI. The remaining 20 are listed in order of most recent employment estimate.
United States Steel Corp.
1,175 to 1,675 Alabama workers
United States Steel Corp. (USS), founded in 1901, is a Fortune 200 company in the iron and steel industry. With headquarters in Pittsburgh, USS produces integrated steel throughout North America and Central Europe. One of those facilities is Fairfield Works, a pipe mill 10 miles west of Birmingham that manufactures seamless pipes for the oil, automotive and appliance industries and sheet products.
The U.S. steel industry, however, has been hit hard in recent years. Industry analysts and Thomas Gibson, president and CEO of American Iron and Steel Institute, say cheap imports and an oversupply have hurt U.S. steel makers.
In fact, USS announced first quarter losses of $75 million. In contrast, during the same period last year, USS had net earnings of $52 million.
And earlier this year, USS, which has an estimated 23,000 workers, announced the possibility of laying off up to 4,000 workers companywide, including around 1,900 at Fairfield Works. But by June, 574 of the 799 Fairfield Works employees laid off were able to return to work, according to news accounts. That would put the Alabama employment, previously estimated by the Alabama Department of Commerce at 1,500 to 2,000 workers, down to 1,175 to 1,675.
As a result of slumping sales, USS stock prices have underperformed the S&P Index since April 2011. That year, USS stocks were as high as $58.42 a share, but two years later, in July of 2013, the stock dipped to just $17.35 a share. By June of this year, the USS stock price reached $20.62. Analysts have given USS stock a “Hold” recommendation.
In its latest Securities and Exchange Commission (SEC) 10K filing, the company says it plans to execute a stockholder value creation strategy toward driving and sustaining growth: “…We continue working toward strengthening our balance sheet, with a strong focus on cash flow, and have launched a series of initiatives that we believe will enable us to add value, right-size the company, and improve our performance across our core business processes, including commercial, supply chain, manufacturing, procurement, innovation, and operational and functional support.”
As part of its strategy, the company announced in June its purchase of AK Steel’s interest in Double Eagle Steel Coating Co. (DESCO). Using DESCO’s electrolytic-galvanizing line will give USS the ability to offer steel-coated products to customers in the automotive industry.
The “patent wall” at Adtran headquarters in Huntsville displays an array of the company’s approximately 750 patents and patents pending.
1,356 Alabama workers
Competing in the telecommunications equipment industry, Huntsville-based ADTRAN Inc. provides network and communications equipment to public and private customers in industries such as health care, education, government, utilities and retail, as well as wireless carriers and independent telephone companies.
ADTRAN has 2,074 employees worldwide, including 1,356 workers in Huntsville, says spokesperson Christopher Dale. The company also has engineering and support centers in Massachusetts, India and Germany, as well as sales and support offices throughout the world.
In February, the company announced a partnership with service provider Digicel to deliver wireless networks in the Caribbean, starting in Grenada, using ADTRAN’s ProCloud service.
Meanwhile in Alabama, ADTRAN and Troy Cable debuted a partnership this year to provide gigabit Internet service to 40,000 households across southeast Alabama.
Despite its new ventures, business for ADTRAN — and the communications equipment industry in general — has been rocky.
An industry report by IBIS Market Research says the recent recession caused many industry customers to cut their budgets for networking equipment. And while the economy has since improved and ISPs and telecommunications carriers are embracing new technologies, telecom equipment providers are finding it harder these days to compete with cheaper, overseas imports, the report says.
ADTRAN’s first quarter sales this year were $142.8 million compared to $147 million for the first quarter in 2014. The company also reported its first quarter net income at $3.3 million compared to $9.6 million for the first quarter in 2014.
ADTRAN stocks have declined over the last several years and have not risen above the S&P since 2012. During the first quarter of 2011, ADTRAN stock hit a high of $45.48 per share, above the S&P Index. But by March of 2012, the stock price fell below the S&P to $31.19. By the end of June 2015, the stock was down to $16.25 per share. This summer 11 out of 12 analysts gave the stock a “Hold” rating.
In its SEC MD&A statement, ADTRAN says that the company’s success depends on its ability to increase unit volume and market share by introducing “new and succeeding generations of products” with lower prices and more functionality.
“As a part of this strategy, we seek in most instances to be a high-quality, low-cost provider of products in our markets. Our success to date is attributable in large measure to our ability to design our products initially with a view to their subsequent redesign, allowing both increased functionality and reduced manufacturing costs in each succeeding product generation. This strategy enables us to sell succeeding generations of products to existing customers, while increasing our market share by selling these enhanced products to new customers.”
1,200 Alabama workers
Based in Amsterdam, Constellium designs and manufacturers aluminum products and solutions for the aerospace, automotive and packaging industries.
The company has 23 manufacturing sites across North America, Europe and China. The sites now include Wise Metals Intermediate Holdings LLC, a private aluminum company in Muscle Shoals that Constellium acquired this year. Wise Metals produces aluminum products for the beverage and food can markets.
Constellium closed on the $1.4 billion deal to acquire Wise Metals in January. In a statement, the company says it plans to invest up to $750 million at the north Alabama plant to speed up development of Constellium’s body-in-white assembly market in North America. According to its SEC filing, Constellium has more than 8,900 workers, including the more than 1,200 at the Muscle Shoals facility.
In April, the company unveiled its expanded plant in Van Buren, Michigan, where it makes customized automotive structures and other products. The company says the $40 million, 210,000-square-foot expansion project will double the facility’s production capacity.
But in recent years, the aluminum industry has suffered. Analysts say that globally, aluminum prices fell during the fourth quarter of 2013, because supply surpassed demand. In response, many aluminum producers cut back on production, NASDAQ says.
Demand for aluminum, however, is expected to rise as the auto industry turns to aluminum to make lighter cars that will meet new U.S. government fuel efficiency standards by 2025.
In May of 2013, Constellium went public, announcing an initial public offering of $15. But the stock fell to $14.70 per share. Constellium went on to perform above the S&P Index, hitting its peak in June 2014 at $32.06 per share. But the price began slipping, and by November 2014, it had fallen to $15.75, below the S&P. By March 2015, the stock was above the S&P index at $20.32. But it fell again, and by April it was below the S&P at $18.37. On June 29, the stock was at $12.14 per share.
Analysts have given the stock an “Overweight” rating. And Zacks Investment Research has recommended selling the stock due to the sharp price declines on Constellium stock.
In its Form 20-F SEC report, Constellium says, “We are directly affected by the economic conditions which impact our customers and the markets in which they operate.
The company says it is able, in some cases, to mitigate the risk of a downturn in customers’ businesses by building committed minimum volume thresholds into their commercial contracts and using temporary workers for certain operations to help match their resources with demand for their services.
Coal miner at one of Walter Energy’s underground Alabama mines, Mine 7 at Brookwood. Photo by Marsha Perry
Walter Energy Inc.
2,000 Alabama workers
Coal producer Walter Energy — one of Alabama’s biggest employers in one of its most traditional industries — was on the ropes, owing to an international slump in demand for metallurgical coal.
Alabama employment at Walter has been as high as 4,000 workers, but the company’s most recent annual report puts it at about 2,000. Between May and July, the company issued 915 WARN notices to employees of potential layoffs. Actual layoffs totaling 194 began in late July, with more expected.
In June, Walter was negotiating a debt restructuring with senior lenders, according to Bloomberg. In July, lenders were pushing to cut worker pay, reduce pension costs and idle plants as part of the bankruptcy plan, Bloomberg reported. On July 15, Walter filed for Chapter 11 bankruptcy protection.
Walter Energy, with its headquarters in Birmingham, focuses primarily on producing metallurgic coal for the steel industry. The company has operations in the United States, Canada and the U.K. In the United States, the company has underground and surface mines, a coke plant and natural gas operations in Alabama and underground and surface mining operations in West Virginia.
Walter Energy has sustained heavy financial losses recently. In February the company announced that it had a net loss in 2014 of $470.6 million compared with 2013’s net loss of $359 million. SNL Financial in January of this year issued an analysis saying production at Walter’s U.S. mines was down 7.8 percent to 2.4 million tons in the fourth quarter of 2014.
In its SEC 10-K filing, the company writes that demand for metallurgical coal is expected to grow as world steel production grows.
“While uncertainty exists in certain regions globally, including China, demand for our premium metallurgical coal products in core markets has remained steady and we believe the long-term demand for our metallurgical coal within all of our markets will increase as industry projections indicate that global steelmaking will continue to require increasing amounts of high quality metallurgical coal. As such, we are focused on the long-term metallurgical coal market. We remain committed to aggressively controlling costs, improving operating performance and productivity, reducing expenses and increasing liquidity.”
Several analysts have rated the company’s stock overall as being “Underweight.” The stock has not performed over the S&P since August of 2011.
In March 2015, the company’s average closing stock price was down to just 99 cents. With that, the company announced that it no longer met the listing standard for the New York Stock Exchange, which requires an average common stock closing price of at least $1 over a consecutive, 30-day trading period. On June 30, the stock was trading at $0.22 per share.
By that time, Walter Energy was in the midst of negotiating debt restructuring to avoid bankruptcy. On June 11, Walter Energy announced that it would exercise the 30-day grace period under an indenture agreement with holders of its 9.8 percent Senior Notes due in 2020. This will extend the time for making the cash interest payments that were due June 15, 2015.
1,400 Alabama workers
Computer Programs & Systems Inc. (CPSI) is a Mobile-based company in the health care information technology sector. It is also the parent company of TruBridge LLC, which produces business, consulting and managed IT services for hospitals.
This April, the company launched a second subsidiary, Evident LLC, to provide electronic health care systems for more than 650 critical access, rural and community hospitals and their 12,000 providers in 46 states and the District of Columbia.
CPSI has been in business since 1979 and has more than 1,400 technical, health care, business and medical professionals, according to the company.
Last November, CPSI announced a partnership with IBM to develop predictive analytics for rural and community hospitals to identify patient readmission risk factors. The goal is to identify which patients have a higher probability for readmission so caregivers can take action to lower those risks.
Analysts agree that the health care information technology sector is a highly competitive and growing market. A recent report by Transparency Market Research says its expects a 6.4 percent compound annual growth rate for the global electronic health record market from 2014 to 2020 and that by 2020, the market will climb as high as $23.98 billion.
CPSI has reported its total revenues for the first quarter of 2015 at $46.2 million, compared to $52.1 million for the first quarter of last year. Its net income for the quarter of 2015 was $5.5 million, or $0.49 per diluted share, compared with $7.7 million, or $0.69 per diluted share, for the same quarter in 2014.
The company’s stock price has performed below the S&P index since 2012. A year earlier, the company reached a high stock price of $73.45 per share, but as of June 30, 2015, the stock was down to $53.42 per share. This summer, CPSI garnered a “Hold” rating from 13 of 15 analysts.
In its MD&A SEC statement, the company says the health care industry has been affected by U.S. regulatory and national health projects and that prospective hospital customers can often lack the capital needed to invest in information technology. The company says, however, that it plans to take steps to increase its earnings.
“In addition to revenue growth, our business model is focused on earnings growth. Once a hospital has installed our system, we continue to provide support and maintenance services to the customer on an ongoing basis. These services are typically provided by the same personnel who perform our system installations, resulting in an increased gross margin as the substantial majority of the related costs are relatively fixed. We also look to increase margins through cost containment measures where appropriate.”
2,900 Alabama workers
Sanmina (NASDAQ: SANM) in Huntsville designs and manufactures advanced products for the medical, industrial, military and commercial aviation markets.
High technology products manufactured in Huntsville include medical imaging and cancer treatment systems, avionics and electronics for both military and commercial aircraft.
The company’s stock had a sharp downturn earlier this year, dropping 15 percent in mid-April after it announced weaker-than-expected fiscal second quarter 2015 results. But its quarterly revenue rose 3.4 percent over last year to $1.53 billion, Motley Fool reports.
Over a five-year period the stock value went from $15.25 in June 2010 to $20.67 at the close of June 26, 2015.
Sanmina Corp. has 2,900 employees at its SCI Technology division in Huntsville, which grew from a basement start-up in 1961. SCI was acquired in 2001 by Sanmina, a $6 billion company with 75 facilities worldwide.
Company officials said Sanmina has recently established a high-tech business segment for rapid design, prototyping and manufacturing of complex, high reliability products.
In October 2014, SCI Technology announced it had started production of electronic assemblies for the Miniature Air Launched Decoy and the GBU-53/B for Raytheon Missile Systems at the Huntsville site.
2,750 Alabama workers
Science Applications International Corp. (NYSE: SAIC) performs research and development in physical, engineering and life sciences; system integration and design.
Total revenues for the first quarter were $1,009 million, compared to $977 million during the first quarter of 2014.
Corporate officials attribute increases in total revenues to higher volume on supply chain contracts and increased U.S. Department of Defense material and subcontract revenues.
The company’s stock fell as much as 10 percent in March in response to a disappointing earnings report, Motley Fool reported. But after things settled, the company rebounded. Over a five-year period, the stock value increased from $31.43 in 2013 to $53.79 on June 26 of this year.
SAIC employs 2,750 people at several locations in Alabama: Anniston, Daleville, Huntsville, Maxwell Air Force Base, Montgomery, Oxford, Redstone Arsenal and Tanner.
2,650 Alabama workers
The Boeing Co. (NYSE: BA) supports both defense and commercial customers in the areas of commercial aviation, space transportation systems, missile systems, systems engineering and integration.
Over the past five years, Boeing’s sales increased by more than 40 percent, driven largely by “strong global demand for our commercial airliners because more people around the world want to fly to their destinations,” says Chaz Bickers, communications director for Boeing.
The company’s net income increased by more than 60 percent, driven both by the commercial aviation growth and by the strong financial performance of its Defense, Space & Security business, which has continued to serve government customers even as defense budgets globally declined, he says.
The company has about 2,650 employees at two main facilities in Huntsville, at the Jetplex Industrial Park and at Redstone Gateway. The company has 223 suppliers and/or vendors in Alabama and annual expenditures with Alabama suppliers are $512.8 million.
In June, Boeing officially opened its new 80,000-square-foot research and technology center in Huntsville. The facility serves as the company’s hub for collaborative technology development with academic institutions and research partners in the Southeast.
1,850 Alabama workers
International Paper (NYSE: IP) manufactures paper, corrugated and solid fiber boxes, linerboard, industrial packaging, corrugated shipping containers and more at its five locations in Alabama.
Its stock has shown a steady increase over a five-year period, going from $24.38 a share in June, 2010 to $48.48 as of June 26 of this year. Between 2012 and 2014, revenue at IP grew by 8.1 percent to $26.62 billion, according to market reports.
The stock did take a hit earlier this year when it dropped from $54 a share to $49.67, when analyst firm Macquarie lowered its price target for IP. Though that downgrade prompted concerns of containerboard/paper companies, any economy requires the products and services IP provides, making it a sensible investment prospect, one analyst noted.
The company employs a total of about 1,850 people at facilities in Bay Minette, Decatur, Huntsville, Prattville and Selma.
1,800 Alabama workers
Nucor Steel, a division of Nucor Corp. (NYSE: NUE), manufactures steel, metal building systems, carbon and pressure vessel steel coil, cut-to-length plate and carbon steel reinforcing bars at its six locations in Alabama.
The company expects a decrease in the overall operating performance at the steel mills segment in the second quarter of 2015. Though pricing has begun to stabilize, the company experienced some margin erosion as the decrease in average sales prices during the quarter slightly outpaced the decrease in the average cost of raw materials consumed.
Pricing remains under pressure from exceptionally high levels of imports that continue to flood the domestic market in the second quarter of 2015, officials said in a press release.
Imports account for about 32 percent of the market, officials said.
“We are somewhat encouraged to see a slight decrease in imports since the beginning of the year according to data published by the U.S. Department of Commerce,” the release reported.
The company employs about 1,800 people at locations in Birmingham, Eufaula, Trinity, Tuscaloosa and Fort Payne.
1,700 Alabama workers
Tyson Foods (NYSE: TSN), one of the world’s largest producers of meat and poultry, processes prepared foods and chicken at its Alabama locations, as well as producing poultry feed and operating a hatchery.
The company experienced a sales increase of 10.5 percent to about $10 billion in the second quarter of 2015, according to company statements. Donnie Smith, CEO and president, attributes coming in above projections to strong performances in the prepared foods and chicken segments of the company.
Tyson has 1,700 employees in its Alabama locations in Albertville and Blountsville.
This year, the company expects domestic protein production — chicken, beef, pork and turkey — to increase approximately 2 percent from fiscal 2014 levels.
Goodyear Tire & Rubber
1,550 Alabama workers
The Goodyear Tire & Rubber Co. (NASDAQ: GT) plant manufactures radial light truck and passenger tires for replacement and original equipment customers. It has been open in Gadsden since 1929. With new tire-building machines added in 2014, the plant produced about 22,100 tires daily.
Goodyear-Gadsden employs about 1,550 people, though the number fluctuates.
Reports show that Goodyear Tire has been a strong performer in the first quarter of 2015 and is up 15 percent in the last year. Company value has seen a $1.15 billion improvement during the past five years, according to company figures.
Also, Goodyear extended the protected status for Gadsden and other union-represented U.S plants to 2021, meaning it agrees not to close a plant while the contract is in effect.
The company is expected to bring new jobs to Gadsden this year with the launch of a new product line — producing rubber that will be sent to another plant for retreading tires, The Gadsden Times reported. The company declined comment.
While the company has agreed to invest $500 million in U.S. plants through 2021, it is also building a state-of-the-art plant in San Luis Potosi, Mexico, that will focus on the North American tire market. That plant is set to open in mid-2017, the Times reported.
1,452 to 1650 Alabama workers
Jacobs Engineering Group Inc. provides technical, professional and construction services to various industrial, commercial and governmental clients. It has locations in Huntsville that employ 1,452 to 1,650 workers, according to estimates by the Alabama Department of Commerce.
In June, Jacobs announced that, after a competitive process, its consultancy business was awarded a contract by the Department of Energy and Climate Change (DECC), a department of the United Kingdom government, to provide technical advisory services to DECC’s Office of Carbon Capture & Storage (OCCS). DECC has developed one of the most comprehensive programs in the world to support creation of a new carbon capture and storage (CCS) industry to help mitigate climate change. Company officials did not disclose the contract value, but noted that the two-year contract is being delivered from its London operations.
Jacobs also announced in June that it was awarded a five-year, architectural and engineering services indefinite delivery/indefinite quantity (IDIQ) contract with the U.S. Army and Air National Guard nationwide, with a maximum value of $45 million. This contract is the third continuous, five-year national IDIQ contract Jacobs has held with the National Guard.
The company’s stock performance has been erratic over the past five years.
Analysts’ recommendations as of June 26 included 3 strong buys, 6 buys, 11 holds, 2 underperforms and no sells.
1,400 Alabama workers
Lockheed Martin’s (NYSE: LMT) Pike County Operations facility is a manufacturing, final assembly, test and storage operation for missile programs supported by Lockheed Martin Missiles and Fire Control.
The site supports a number of missile production programs, including the Joint Air-to-Surface Standoff Missile, the Terminal High Altitude Area Defense guided missile and the Javelin anti-armor missile. It also manufactures missiles and hardware for development programs.
“We attribute our strong stock performance to our focus on providing excellent program execution to our customers on over 3,000 programs,” says Paul Sudlow, communications, Missiles and Fire Control Lockheed Martin Corp. This execution led to strong win rates, margin expansion and cash generation. Deployment of cash into strategic acquisitions, share repurchases and dividend increases also contributed to shareholder value creation, he says. Over a five-year period stock has risen from $78.05 a share in June 2010 to 188.90 as of June 26, 2015.
Lockheed Martin has about 1,400 employees in Alabama, including 325 at Pike County Operations and the rest in Huntsville and Courtland.
New business has enabled Lockheed Martin to expand its cruise missile and THAAD production facilities. The state contributed $2.5 million from the governor’s discretionary fund to enable the expansion.
“We have already hired 40 employees under this agreement and spent $15 million in local capital improvements,” Sudlow says. “We expect to create approximately 240 new jobs here in Troy by 2020 under this agreement and are in the early stages of planning other growth opportunities that would add even more employment opportunities.”
1,304 Alabama workers
Endo Pharmaceuticals, based in Dublin, Ireland, is a global specialty pharmaceutical company, which develops, manufactures, markets and distributes branded pharmaceutical and generic pharmaceutical products, as well as over-the-counter medications.
Endo has four locations in Huntsville, employing 1,304, according to Heather Zoumas-Lubeski, director of corporate affairs.
In May, Endo announced plans to acquire Par Pharmaceutical for $8.05 billion, to create a specialty pharmaceutical company with one of industry’s fastest growing generics businesses. The move positions Endo for long-term, double-digit organic growth, strong cash flow and financial flexibility.
In January, Endo acquired Auxilium Pharmaceuticals Inc., and in February the company completed its acquisition of Litha Healthcare Group.
Company stock performance has shown growth over the past five years. Analysts recommendations in late June included 5 strong buys, 7 buys, 6 holds, no underperform or sells.
Of the 10 analyst estimates, the most bullish sees the stock reaching $117 within the next 12 months while the most bearish analyst sees the stock at $84 within the year.
1,250 Alabama workers
Northrop Grumman’s (NYSE: NOC) teams in Alabama produce hardware and software for military use. Its products enable military commanders to detect threats such as rockets, artillery or ballistic missiles; warn their forces; perform command and control ground combat operations, and perform command and control air and missile defense operations.
Primary customers are the Army’s Program Executive Office for Missiles and Space and the Missile Defense Agency, an organization reporting to the Department of Defense.
The company’s stock remains steady despite a couple of big hits, analysts say. CEO Jerry McNerny left the company earlier this year, and Northrop Grumman delivered the last of the C-17 transport planes, which it has been manufacturing since 1992.
Over a five-year period, stock prices have gone from $53.46 a share on June 25, 2010 to $161.82 a share in June of this year.
The company employs approximately 1,250 people in the Huntsville area.
In May 2015, the U.S. Army and Northrop Grumman Corp. took a major step in integrated air and missile defense when a ballistic missile was destroyed using the Integrated Air and Missile Defense Battle Command System in its first flight test.
“Working together with the Army, Northrop Grumman will deliver with IBCS a fully netted system providing a single, unambiguous view to enable any-sensor, best-shooter capability,” says Dan Verwiel, vice president and general manager, integrated air and missile defense division, Northrop Grumman Information Systems in Huntsville.
The company’s IBCS development, integration and test activities take place in multiple Huntsville laboratories and facilities.
1,250 Alabama workers
The General Electric Decatur Plant Operations (NYSE:GE), which opened in 1977, makes GE top freezer refrigerators.
Its stock has fluctuated slightly over a five-year period, but has risen overall from $14.91 a share in June 2010 to $27.06 in June of this year.
There are 1,250 employees at its location in Decatur, but the numbers change frequently, a representative said.
In September 2014, General Electric announced that it was selling its Appliances Division to Sweden-based Electrolux for $3.3 billion. As part of the transaction, GE entered into a long-term agreement with Electrolux to continue use of the GE Appliances brand. The transaction is targeted to close this year, but in June news got out of a potential management shake-up that could leave the home-appliance maker without strong leadership just as the company expects to close on the sale.
1,200 Alabama workers
WestRock is the name of a newly formed company after a merger between MeadWestvaco Corp. and Rock-Tenn Co. on July 1. WestRock is now one of the world’s largest paper and packaging companies, with $15 billion in annual revenue and 42,000 employees in 30 countries, says Sarah Hogeboom, manager of corporate communications.
Hogeboom says the company has about 1,200 employees in multiple locations in Alabama. For packaging, WestRock has a corrugated container plant in Montgomery, a sheet plant in Cullman and a sheet feeder in Athens. Other facilities include folding carton plants in Lanett and Eutaw, a containerboard mill in Stevenson, a coated unbleached kraft mill in Cottonton, a sawmill in Cottonton, a solid bleached sulfate mill in Demopolis and a recycling facility in Huntsville.
According to a Fidelity Investments’ outlook report for 2015, rising U.S. consumer confidence may lead to increased demand for containerboard and paper packaging products. The industry is heavily weighted toward the U.S. market, which appears poised to be a global economic driver this year.
Over the past five years, MeadWestvaco’s stock has shown a mostly upward trend.
Barclay said in a report issued on July 1 that it believes that the merged company will obtain cost and operational synergies, and will also achieve balance sheet optionality and liability elimination.
The Barclay report says WestRock shares were to be available for investors for trading starting July 2. Rock-Tenn stock jumped up to 3.72 percent to $62.44 and MeadWestvaco stock surged up to 3.24 percent to $48.72 during market hours on July 1. Year-to-date, Rock-Tenn and MeadWestvaco stocks have grown 1.48 percent and 8.76 percent, respectively.
Barclay forecast that the WestRock stock would range from $75-$80, representing 20-30 percent upside potential based on the stock’s closing on June 30.
WestRock’s common stock (WRK) ranged from $58.51 to $66.40 in its first two weeks of trading ending July 15.
1,159 Alabama workers
3M, with sites in Guin and Decatur, has a history with Alabama that spans five decades, says Fanna Haile-Selassie, 3M corporate communications.
The company’s Traffic Safety and Security Division uses the Guin site to make products like reflective sheeting for road signs, as well as vehicle and pavement markings. The West Alabama facility employs 307 people, Haile-Selassie says.
3M’s Decatur site supports the Materials Resource Operations and Film Manufacturing & Supply Chain Operations with its 852 employees.
The company’s stock has shown steady growth over the past three years.
3M Guin was recognized in 2013 as Alabama’s Medium Manufacture of the Year, and 3M Decatur in 2008 as Alabama’s Large Manufacture of the Year. The 3M Foundation gave a $500,000 grant to Alabama Nature Conservancy in 2013 and a $100,000 grant to fund a Decatur pre-k classroom in 2014.
In June, the technology company announced its acquisition of Capital Safety from private equity firm KKR & Co. for $2.5 billion. The acquisition will help 3M’s Personal Safety business, which is a provider of respiratory and hearing protection solutions that help improve the safety and security of workers, the companies stated. The demand for safety equipment is growing quickly, especially in emerging markets as worker-protection regulations increase and multinational companies grow.
As of June 26, the company had analyst ratings of 3 strong buys, 2 buys, 10 hold, 2 underperform and 0 sells.
1,100 to 1,500 Alabama workers
Alabama Power, a subsidiary of Atlanta-based Southern Co., provides electricity to more than 1.4 million customers at a total retail price that has been below the national average for decades.
Utility stocks are highly sensitive to interest rates due to the capital-intensive nature of the industry. Nonetheless, Southern Co.’s stock performance has been mostly positive over the past five years.
Alabama Power owns or operates 81 electric generating units with total nameplate capacity of more than 13 million kilowatts. These generating units, located at 24 facilities throughout the state, include six powered by coal and gas, three gas, one nuclear, and the rest hydro.
The Alabama Department of Commerce estimates the total Alabama employment in the range of 1,100 to 1,500 workers.
In June, Southern Co. announced that about 200 positions were being reduced through retirements, transfers and attrition across Alabama Power’s system because of changes to facilities required by new federal regulations to limit coal use. No layoffs were anticipated.
As of June 26, Southern Co. had ratings of 1 strong buy, 9 hold, 1 underperform and 2 sell.
Johnson Controls Inc.
1,100 to 1,300 Alabama workers
Alabama operations of Johnson Controls Inc. (JCI) focus on automotive seating and interiors and building efficiency, says Fraser Engerman, director of global media relations.
The auto industry goes through boom-and-bust cycles, which can impact a company’s cash flow. The seat business has changed during the past 10 years. Automakers used to buy 70 percent of their seats by ordering the complete product from one supplier, with the other 30 percent assembled from components purchased from a variety of vendors. Now it’s reversed with automakers preferring bulk purchases of parts in partnership with a supplier to handle final assembly.
JCI is also a leading provider of equipment, controls and services for heating, ventilating, air-conditioning, refrigeration and security systems. The global market for energy efficient buildings is strong, supported by environmental regulations and rising energy prices.
Over the past five years, JCI stock has reflected the nature of the industry’s boom or bust cycle, but with steady growth in the past two years.
JCI has seven facilities in Alabama, Engerman says. Birmingham and Mobile are building efficiency locations, while Clanton, Cottondale, Eastaboga, Hoover and McCalla focus on seating and interiors. According to Alabama Department of Commerce estimates, JCI employs 1,100 to 1,300 workers.
In April, JCI and Yanfeng Automotive Trim Systems Co. Ltd., a wholly owned subsidiary of Huayu Automotive Systems Co. Ltd. (HASCO), the component group of Shanghai Automotive Industry Corp., announced a global automotive interiors joint venture —Yanfeng Automotive Interiors. It will be the largest automotive interiors company in the world, with revenues of approximately $8.5 billion and a backlog to reach $10 billion in the next few years. Yanfeng will hold the majority 70 percent share in the joint venture, and Johnson Controls will have a 30 percent share. Operations began July 1.
Engerman says no plant closures or layoffs are anticipated.
In June, the company said it was exploring options to sell its automotive business. Shares of JCI stock surged after the announcement to lead S&P 500 gainers.
As of June 26, JCI had ratings of 4 strong buys, 5 buys, 1 overweight, 10 hold, no underweight or sells.
Steelcase makes a portfolio of integrated office furniture at its largest manufacturing facility in Athens.
1,000 Alabama workers
Steelcase Inc. designs, manufactures and distributes an integrated portfolio of furniture settings, user-centered technologies and interior architectural products. The office furniture business remains positive, and smaller companies in the industry are outpacing their larger counterparts.
In the Americas, first quarter orders for the current fiscal year increased 8 percent compared to the prior year and continued to include a significant amount of orders with requested delivery dates more than 90 days from the order date. As a result, order backlog at the end of the first quarter was approximately 15 percent higher than the prior year.
Company stock performance has seen steady growth with sporadic dips over the past three years.
Steelcase’s plant in Athens is its largest facility, located on 60 acres; it has grown to 940,000 square feet over the years. It employs 841 permanent and 265 temporary workers for a total workforce of more than 1,000 — making it Athens’ largest employer.
In November 2012, Steelcase received a $37,000 tax abatement on a $2 million expansion of the facility to add up to 100 new jobs.
Laura VanSlyke, corporate communications, says the Athens team has achieved success in the launch of its new product, V.I.A., for Vertical Intelligent Architecture, designed to redefine the role vertical real estate plays in today’s workplace.
The Athens plant has also implemented innovative cost savings initiatives through implementation of laser cut fabric, automated upholstery technology, use of galvanized steel and development of powder paint for dry erase finishes.
Current summary of analysts’ recommendations on the stock as of June 26 include 4 strong buys, 1 hold, and no buy, underperform or sell ratings.
Golden Enterprises Inc
750 Alabama workers
Golden Enterprises Inc., through its subsidiary, Golden Flake Snack Foods Inc., produces, markets and distributes snack products in the United States. The company offers salted snack items, such as potato chips, tortilla chips, corn chips, fried pork skins, baked and fried cheese curls, onion rings and puff corn. It also sells canned dips, pretzels, peanut butter crackers, cheese crackers, dried meat products and nuts packaged by other manufacturers using the Golden Flake label. The snack foods business is highly competitive.
Company stock has mainly been steady, with growth spikes from 2011 thru the end of 2014, when stocks took a dip. Stocks have been on upward trend since January.
The main plant and headquarters of Golden Flake are located in Birmingham. Golden Flake owns distribution warehouses in Birmingham, Montgomery, Pelham, Midfield, Demopolis, Fort Payne, Muscle Shoals, Huntsville, Phenix City, Tuscaloosa, Mobile, Dothan and Oxford.
Golden Flake employs approximately 750 workers, almost all of them full-time.
Golden Flake Snack Foods’ longtime sponsorship of the Southeastern Conference ended June 1, 2014 in what was described as a return to the company’s roots. The Birmingham-based snack food maker became one of the SEC’s first corporate sponsors 30 years ago, but backed off when the conference expanded into states outside the company’s distribution area. The decision to cut ties with the SEC does not affect Golden Flake’s sponsorships at the University of Alabama and Auburn University, which have been in place for 50 years.
For the 13 weeks ended February 27, 2015, net sales decreased 1.9 percent from the comparable period in fiscal 2014. For the 39 weeks ended February 27, 2015, net sales decreased 3.1 percent from the comparable period in fiscal 2014. Revenues this year were negatively impacted by a loss in part of contract business that was not renewed.
The company’s stock trends are up.
Airbus parts head from port to plant in Mobile. The first components arrived for assembly on June 18. Photo courtesy of Airbus/Tad Denson - Airwind/MyShotz
Airbus Americas Inc.
621 Alabama workers
Airbus Americas Inc. is an aerospace manufacturing, engineering and design company, which also focuses on aviation maintenance, repair and overhaul, says Kristi Tucker, director of communications. Air travel has proven to be resilient to external shocks, with world travel growth at 85 percent since the U.S. terrorist attacks September 11, 2001.
Company stock, which trades over the counter under the symbol EADSY, has been trending upward since 2013, took a dip early this year but has shown steady growth since January.
Airbus employs 621 in Alabama at the following locations: Airbus Defense & Space Military Aircraft-Mobile, 59 employees; Airbus Defense & Space Inc.-Huntsville, 18 employees; Airbus Americas Engineering-Mobile, 203 employees; Airbus U.S. Manufacturing Center-Mobile, 244 employees, and Vector Aerospace (subsidiary of Airbus Helicopters)-Andalusia, 97.
The new Airbus U.S. Manufacturing Facility in Mobile became operational over the summer with the first parts arriving in June. Production began in July.
In April, Airbus Defense & Space Military Aircraft celebrated its 10th year in Mobile, named as C212 Aircraft Series Worldwide Support Center.
Airbus announced plans in December 2014 to bring monthly production of its current A330 wide-body from 10 to six a month by 2016 as it prepared to introduce the newer A330neo with more fuel-efficient engines.
Even that lower goal had come into question by some analysts as the order backlog on the long-distance aircraft became thinner. However, in June, Saudi Arabian Airlines announced it will take delivery of 50 aircraft — an $8.2 billion deal — in the largest aviation deal to be secured via Islamic financing, as the European plane maker tries to gain an edge over rival Boeing in the key Gulf aviation market.
CSC headquarters in Huntsville. The company also has offices in Athens, Daleville, Foley, Fort Rucker, Huntsville, Madison, Maxwell-Gunter Annex, Mobile, Montgomery, Scottsboro and Troy.
Computer Sciences Corp.
550 Alabama workers
Computer Sciences Corp.’s (CSC) work in Alabama supports U.S. defense and civil agency business, says Anne Eisele, CSC corporate communications. Representative clients include the United States Army Aviation and Missile Command (AMCOM), Missile Defense Agency, NASA and the Alabama Super Computer Network.
Overall, the recovery of the global economy and increased demand for commercial aircraft are lifting the aerospace and defense industry out of a challenging market. For the most part, company stock performance has been consistent or shown steady growth.
CSC employment totals 550 at its facilities in Athens, Daleville, Foley, Fort Rucker, Huntsville, Madison, Maxwell-Gunter Annex, Mobile, Montgomery, Scottsboro, Troy and others who work remotely or telecommute, says Eisele.
In May, the Federal Aviation Administration awarded CSC’s Fort Rucker operations a $21 million, five-year follow-on contract for the Direct User Access Terminal Services II (DUATII) program.
Also in May, CSC announced a plan to separate the company into two publicly traded companies: one to serve commercial and government clients globally and one to serve public sector clients in the U.S. After the announcement, shares of CSC rose 7 percent in after-hours trading, after ending the regular session down 0.9 percent.
In June, CSC’s Huntsville operation was awarded a $480 million, eight-year contract to administer NASA’s Next-Generation Shared Services Center (NSSC Next Gen) located at Stennis Space Center in Mississippi.
Also in June, the Securities and Exchange Commission sealed a $190 million settlement with CSC in connection with accounting fraud charges from 2009 to 2012. The company says it has, since 2011, implemented comprehensive enhancements to its compliance, financial control and disclosure programs.
As of June 26, of 16 securities analysts who follow CSC, all are neutral to positive this month. The company had ratings of 1 strong buy, 3 buys, 13 hold/neutral and no underperform or sell.
Gail Allyn Short, Wendy Reeves and Tammy Leytham are freelance contributors to Business Alabama. Short is based in Birmingham, Reeves in Huntsville and Leytham in Fairhope.