JPMorgan Chase & Co. is looking at cutbacks in its branch network, according to news reports over the last couple of weeks, but that doesn’t seem to be affecting its expansion plans in Jacksonville.
The company basically had no branch network in Jacksonville but began aggressively building one two years ago under the Chase Bank name. Although The Wall Street Journal reported two weeks ago that the company is planning to close branches and cut 5,000 jobs, it is actually exceeding its growth plans in Northeast Florida.
Two years ago, the company had only one Jacksonville branch that was attached to JPMorgan Chase’s large mortgage banking operation in Baymeadows when it announced plans to open about a dozen consumer banking offices in the area.
As it turned out, the company just opened its 16th area branch in Fleming Island in April and expects to open another in Bartram Park in the fall, spokeswoman Maribel Ferrer said.
“And we plan to open a few more in 2016,” she said by email.
Chase Bank had 5,570 branches at the end of the first quarter, but the company is looking to close some offices because more customers are doing their banking online, according to The Wall Street Journal story. In addition to branch closings, the company also expects to reduce employment by an average of one job per branch, it said.
That’s not the only way the company is looking to cut costs in its branch network. A JPMorgan Chase executive said at a conference last week the company is eliminating voice mail for many employees because it’s not being used enough to justify the cost, Bloomberg News reported.
The company has 136,908 workers in its retail branches and voice mail costs $10 a month per line, so 65 percent of employees had their voice mail deactivated, Bloomberg said.
Medtronic still mum on merger impact
Four months after completing its $49.9 billion merger with Covidien plc, Medtronic plc is still not saying if the deal will impact its Jacksonville operations.
Medtronic moved its headquarters to Covidien’s offices in Dublin, Ireland, after the merger but is maintaining its operational headquarters in Minneapolis. Medtronic has had the headquarters of its surgical technologies division in Jacksonville, but has not said if anything will change locally because of the merger.
“If or when we have something to announce, we’ll let our employees know,” Medtronic spokesman Fernando Vivanco said by email last week.
Medtronic last week reported adjusted earnings of $1.16 a share for the fourth quarter ended April 25, its first full quarter after the merger.
That was 2 cents lower than the fourth quarter last year but 5 cents higher than the average forecast of analysts surveyed by Thomson Financial.
However, Medtronic forecast fiscal 2016 earnings of $4.30 to $4.40 a share, which is lower than the average analysts’ forecast of $4.45.
The company said the negative impact of foreign exchange rates, which is affecting a lot of U.S. companies because of the strong dollar, will be 10 cents more than the company had originally estimated.
Landstar earnings on target
In his midquarter conference call update with investors last week, Landstar System Inc. President and CEO Jim Gattoni said he expects the Jacksonville-based trucking company to meet its financial forecasts for the second quarter, based on results so far.
Through the first eight weeks of the quarter, Landstar’s revenue was 8 percent higher than last year, at the high end of the company’s forecast for the full quarter of 2 percent to 8 percent revenue growth.
Gattoni said he is comfortable with Landstar’s earnings forecast for the quarter of 87 cents to 92 cents a share, up from 80 cents in the second quarter of 2014.
“I expect demand for Landstar service to continue to be strong through June,” he said.
Landstar has a habit of holding these midquarter calls at 2 p.m. on Thursday afternoons but this time, the call was at 4 p.m., as the stock market closed. That might lead you to believe there would be some market-altering news in the conference call, but there wasn’t.
The day before the conference call, Macquairie Research analyst Kelly Dougherty downgraded her rating on Landstar from “outperform” to “neutral.”
“We still like Landstar’s differentiated model and proven operating leverage,” Dougherty said in a research note. But she said an unfavorable mix of business (with fewer heavy loads) and “muted” economic growth will be headwinds for the company.
CSX earnings on track
Although CSX Corp.’s volume of coal shipments continues to drop, the Jacksonville-based railroad remains on track to grow earnings per share by a mid-to-high single digit percentage this year, Chief Financial Officer Fredrik Eliasson said at an investor conference last week.
“While overall volume is tracking slightly below the levels in the second quarter of last year, service is improving steadily and we remain on track to deliver second quarter earnings per share that are flat to slightly up,” Eliasson said at the conference sponsored by Deutsche Bank, according to a CSX news release.
Intermodal traffic and construction materials are producing volume growth in the second quarter, but full-year domestic coal volume is expected to be down at least 5 percent, he said.
Rayonier AM announces lignin partnership
Rayonier Advanced Materials Inc. last week announced an agreement with Norway-based Borregaard to form a joint venture at its Fernandina Beach plant to produce natural lignin-based products.
Lignin is a natural component of wood that can be used in construction, agriculture and other industrial applications, Rayonier AM said.
Jacksonville-based Rayonier AM will own 45 percent of the joint venture and Borregaard will be the majority owner.
“For us, the project advances our strategy of leveraging the value of our assets and co-products while further enhancing the competitive position of our Fernandina plant,” Rayonier AM Chief Executive Officer Paul Boynton said in a news release.
The companies will invest $110 million in the plant, which is expected to become operational in 2017.
Another activist buys Web.com shares
Another activist investor has taken an interest in Jacksonville-based Web.com Group Inc.
Engaged Capital LLC disclosed in its quarterly Securities and Exchange Commission filing that it has acquired 305,317 shares of Web.com.
That represents only about 0.6 percent of Web.com’s outstanding shares, but the California-based fund was founded by Glenn Welling, who has a reputation for shareholder activism. So the share purchase did attract attention last week.
Engaged Capital’s filing gave no other details on its investment in Web.com.
In February, Web.com agreed to put two new directors on its board supported by activist investor Ahmet Okumus. Although Okumus did not indicate any disagreement with management, his firm has become one of Web.com’s biggest shareholders with about 15 percent of the stock.
Drone Aviation appoints chairman
Drone Aviation Holding Corp. Friday said that Jay Nussbaum was appointed chairman of the board. He was one of the investors in a $1 million preferred stock offering announced by the company last week.
Nussbaum has served as an executive with several technology companies. Most recently, he was vice chairman and co-founder of Agilex Technologies Inc., which was sold in March to Accenture Federal Services.
Nussbaum had previously been an executive vice president of Oracle Service Industries and was also an executive at Xerox Corp.
Jacksonville-based Drone Aviation develops specialized lighter-than-air aerostats and tethered drones.
Stein Mart sales up
Stein Mart Inc. last week said total sales for the four weeks ended May 30 rose 3.3 percent to $113.3 million and comparable-store sales (sales at stores open for more than one year) rose 1.9 percent.
The Jacksonville-based fashion retailer operated 270 stores at the end of May, compared with 265 a year earlier.
Stein Mart said cooler weather in California impacted customer traffic, and flooding impacted sales in its major Texas markets last month.
Moody’s upgrades Regency Centers
Moody’s Investors Service last week said it upgraded the preferred stock rating of Jacksonville-based Regency Centers Corp. from Baa3 to Baa2.
Moody’s said in a news release the upgrade reflects improved financials for the shopping center developer, and “the REIT’s good property portfolio, large unencumbered asset base and strong operating margins. Mitigating these credit strengths are the REIT’s significant exposure to joint ventures and lumpy debt maturity schedule.”
Land lands in Alabama
Eric Land, former president and general manager of WTLV TV-12 and WJXX TV-25, has landed as general manager of three television stations in the Birmingham-Anniston-Tuscaloosa, Ala., market owned by Sinclair Broadcast Group.
Land resigned from the two Jacksonville stations owned by Gannett Co. Inc. in August after two years on the job.