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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (921)	10/21/1998 6:10:00 PM
From: porcupine --''''>	Read Replies (2) \| Respond to of 1722

Abby Becomes Partner at Goldman "With Stock Issue Ahead, Goldman, Sachs Names 57 as Partners" By JOSEPH KAHN -- October 21, 1998 NEW YORK -- Goldman, Sachs & Co. named 57 new partners Tuesday, awarding them an ownership stake in the world's most profitable private partnership with the promise of a lucrative public offering down the road. Among those named was Abby Joseph Cohen, Goldman's chief portfolio strategist. Ms. Cohen's positive predictions about the stock market made her a Wall Street superstar in the 1990s, but her reputation suffered after the sharp summer selloff that raised the specter of a bear market. The Wall Street firm will add the 57 to its current roster of 189 partners. But 20 to 25 existing partners are expected to retire -- or become limited in Goldman's parlance -- before the firm's fiscal year ends on Nov. 28. Some of those people will retire voluntarily, executives of the firm said, while others will be pushed out to make way for the younger recruits. Being named a partner of Goldman, Sachs is one of the richest rewards on Wall Street, with partners earning an average of more than $1 million a year as well as building equity stakes in one of the world's most profitable financial companies. For the most senior partners, that stake is valued in the hundreds of millions of dollars. This year's crop of partners will also benefit greatly if Goldman follows through with its plan to issue shares to the public for the first time in its 130-year history. Partners voted to take the firm public earlier this year, a move that would have ended the partnership and denied that status to the people offered partnerships Tuesday. But the firm delayed the sale of shares indefinitely last month because of turmoil in the markets and weaker-than-expected operating profits for Goldman and other financial companies, and it quickly revived the traditional partnership selection process. Goldman, Sachs names partners only every other year, and the newest group could well be the last before Goldman does issue shares. At that time, even the most junior ones, including those named Tuesday, would have stakes valued in the tens of millions. To be sure, the economics of going public is not what it was a few months ago. Even with the recent rebound in financial-company share prices, Goldman's Wall Street peers have seen their valuations cut in half from July peaks, meaning that Goldman shares, if issued Wednesday or in the near future, would be unlikely to command the high prices once envisioned. Moreover, Goldman's partners, even after subtracting for expected retirements, would number perhaps 220, meaning that each one would have a smaller slice of the equity than the 189 would have. Less fortunate are the partners expected to retire. As limited partners, they sacrifice their equity stakes in the firm, though they have the option of investing in Goldman, Sachs and earning what is often a hefty annual return on their capital. Limited partners are expected to receive a share of the profits if Goldman goes public, but their potential gain will be much smaller than that of the general partners. "I am sure that with the prospect of an IPO just around the corner, there are some in that batch of retired partners who are not too happy about it," a current limited partner said. "But I am sure there are others who just thought this was the time. You can't wait forever, and being a Goldman partner is an extremely demanding job." Among those expected to retire this year are William J. Buckley and Richard M. Hayden, partners in the equities division, and Christopher Flowers of the financial institutions group. Flowers, who helped prepare Goldman's plan to issue shares earlier this year and is one of the most senior partners, announced his retirement recently after he failed to win one of the top spots in the firm's revamped executive hierarchy. Ms. Cohen is the best known among the 57 new partners, who will collect their brass rings if they accept Goldman's invitation next month. Two other women were also named partners, bringing the total at the firm to 17. Goldman has been criticized in the past for having few women partners..... Copyright 1998 The New York Times Company

To: porcupine --''''> who wrote (921)	10/23/1998 6:59:00 PM
From: porcupine --''''>	Read Replies (2) \| Respond to of 1722

Boeing Beats 3rd-Quarter Forecasts, Although Jet Orders Are Threatened By LAURENCE ZUCKERMAN -- October 23, 1998 The Boeing Co. reported third-quarter earnings Thursday that were higher than expected, but it warned that the recession in Asia would cause it to lose more airplane orders than it had previously estimated. Boeing, the aerospace giant based in Seattle, became profitable during the quarter after facing production problems and other difficulties last year that forced it to take a $1 billion charge. But with the economic downturn in Asia threatening to spread to Europe and the United States, it appears that Boeing's internal troubles caused it to miss out on one of the biggest airplane booms in history. By the time next year when the company's airplane division is expected to be fully recovered, demand for new jets is expected to be declining. For the quarter, the company earned $347 million, or 36 cents a share, on $12.7 billion in revenue. The per-share figure was well above the average estimate of 27 cents forecast by Wall Street analysts surveyed by the First Call Corp. In the period a year earlier, Boeing reported a loss of $696 million, or 72 cents a share, on revenue of $11.4 billion. "There were puts and takes that got you to the slightly better number than expected," said Howard Rubel, an analyst at Goldman, Sachs & Co. in New York. "Most of it was driven by other income and tax benefits." Boeing executives said the company was re-examining its market forecasts in light of Asia's economic turmoil. Airlines serving Asia are responsible for a large part of the sales of Boeing's 747 jumbojet, its most lucrative civilian airplane. But many airlines have reduced their flights in the region over the last year or are switching to smaller planes. Boeing recently increased production of the 747 and the newer 777 widebody to five and seven a month but was planning to reduce production in the middle of next year. Now, it is considering cutting the production rates even further. The company says it is holding 34 completed planes in storage while its customers try to come up with the money to pay for them or Boeing tries to line up alternate buyers. Meanwhile, the company is still struggling to meet its production schedules. To meet its target of delivering 550 commercial airplanes this year, it must produce 182 during the fourth quarter, more than ever before. Alan Mulally, who was named head of Boeing's commercial airplane division last month after the ouster of his predecessor, Ronald Woodard, said Thursday that Boeing was delaying previously announced plans to begin production of 737 narrow-body jets in Long Beach, Calif., so the company could focus on meeting its delivery schedule. Boeing was dealt a new setback recently when it learned that one of its suppliers had shipped it thousands of defective electrical connectors. Mulally said that no planes containing the faulty parts had been delivered to customers and that enough functioning parts were available to allow production to continue. But workers must spend hours inspecting recently completed planes to find out which ones were affected and then fix them. Despite all its travails and weakening demand for its commercial airplanes, some analysts think Boeing, which has seen its stock fall 35 percent since April, has turned the corner. Nicholas Heymann, the aerospace analyst at Prudential Securities who was one of the first on Wall Street to turn bearish on Boeing last year, upgraded his advisory on the stock Thursday to "accumulate" from "hold." He said that Boeing executives were beginning to cut costs and that the company would start generating a large amount of cash next year. Indeed, Boeing announced a stock repurchase plan in August and said Thursday that it spent $364 million to buy 10.6 million of its own shares in September. "At this point, we believe people will have to revise upward their estimates after having revised them down for six quarters," Heymann said. Boeing shares closed Thursday at $36.4375, up 43.75 cents, on the New York Stock Exchange. Copyright 1998 The New York Times Company