As a graduate student at the Medill School of Journalim, I was honored to be the editor-in-chief of the Spring 2010 Innovation Project. We worked with StreetWise, a non-profit in Chicago that publishes a magazine for homeless and at-risk Chicagoans to buy from StreetWise and sell for profit. We redesigned their magazine and created an entirely new, interactive website.

The redesigned website can be found at: StreetWise Test Website

Watch the Presentation to the StreetWise Board

View the magazine redesign

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The November drop in the Reuters/University of Michigan Consumer Sentiment Index was confirmed by shoppers’ self-discipline on Black Friday. Like storekeepers nationwide, Chicago retailers saw the day after Thanksgiving as a disappointment.

Nick Santo, owner of Chii Clothing, said people are saving money and shopping at the mall instead of going to boutiques like his. “Sales were not what we expected. It was moderate. There weren’t as many shoppers out and about. It definitely wasn’t what it was last year.”

Julie Schneider, owner of Hubba-Hubba, a women’s boutique said, “people are watching their pennies, they’re shopping with deals in mind. It was about the same as last year.”

The consumer sentiment index, released on the fourth Friday of every month, reflects a poll of 500 consumers on their personal spending confidence. The November index, released last Wednesday, decreased to 67.4 from 70.6 in October, though it was well above the 55.3 in November 2008.

Of those who took the survey, 38 percent volunteered that their views were based on a decrease in their personal income.

“Even more distressing,” said Richard T. Curtin, director of the Reuters/University of Michigan Surveys of Consumers, in a press release, “the fewest consumers anticipated income gains and the gains expected were the smallest ever recorded.”

Consumers reported putting off buying large items like furniture and electronics, with 39 percent citing income uncertainty as the reason.

Adolfo Laurenti, deputy chief economist at Mesirow Financial Holdings Inc. in Chicago, called it “an improvement from last year,” but he added, “it doesn’t take much to improve over November 2008.”

In fact, according to the National Retail Federation, the number of Internet and store shoppers on Black Friday, the day after Thanksgiving, rose to 195 million from 172 million last year, spending an estimated $41.2 billion
However, the average spending over the weekend dropped to $343.31 per person from $372.57 a year ago according to the federation.

See the full article and a video by Cat Rabenstine at Medill Reports

In the midst of the holiday shopping season during a recession, Sears Holdings Corp. is plodding along compared with other retailers.

Analysts say more cost-cutting looms if Sears fails to solidify a competitive strategy.

William Dreher of Deutsche Bank AG said Sears has made progress with Internet sales, but “unless they start selling thousands of stores, they’re going to have to figure out something to do with them.  The survival and success of their stores cannot be accomplished through the Internet alone.”

Sears Holdings operates Kmart and Sears stores domestically and in Canada, with 324,000 full-time employees.

In the year ended January 2009, Sear’s same-store sales were down 11 percent, after declines of 4.5 percent   and 3.1 percent in the preceding two years.

Gross margins, which improved in 2004 following Sears’ merger with Kmart, have since been stagnant between 23.36 and 28.66 percent, ahead of low-margin Wal-Mart Stores Inc. but not competitive with other large retailers. (See graph.)

According to Tom Aiello, division vice president of public relations, Sears is focusing on innovative Internet sales strategies, including the ability to buy products, from small items to large Craftsman tractors, via a smartphone using the Sears2Go application.

In a press release Dec. 8, Sears announced that it was ranked third by Experian Hitwise in overall Web traffic for a multichannel store retailer for the week ended Nov. 28, 2009, which included Black Friday, the big shopping day after Thanksgiving.

So customers are visiting Sears’ site, but are they buying?

Revenue decreased to $10.2 billion in the third quarter ended Oct. 31 from $10.7 billion in the year-earlier quarter, a decrease of 4.4 percent, still beating analyst expectations.

Sears net loss in the third quarter narrowed to $127 million, or $1.09 per diluted share, compared with a net loss of $146 million, or $1.16 per diluted share in the same quarter a year prior.

“Sears is a strange one because they really don’t communicate,” said Dreher.

“Their strategy is not traditional.  They make little to no effort to communicate what that strategy is,” he continued.  Dreher noted that Sears is buying back shares, focusing on expanding its margin, and playing with store prototypes such as mygofer.com, where customers order products online and pick them up at a warehouse.

What Sears is not doing, said Dreher, is bringing in new brands and exciting products, making investments and solidifying a permanent CEO–all signs that Sears is stagnant, in his view.

The lack of new brands “leads us to the conclusion that brands don’t want to do business with Sears,” said Dreher, who believes chairman Edward Lampert might be moving towards taking the company private.

“They seem to be all focused around assets and not around operations,” said Dreher.

What Sears might do, analysts suggest, is eliminate stores that are under-performing and solidify a strategy to differentiate itself from competitors like Wal-Mart Stores Inc. and Target Corp.

“Everyone recognizes Sears as a turnaround,” acknowledged Tom Aiello, division vice president of public relations. “There are things we’re doing that are unique and customer-driven that we believe are the right things to do in the market.”

Kim Picciola, analyst for Morningstar Inc., believes Sears will continue to experiment with things like online shopping and new kinds of promotions and services like lay-away. Also, Sears will continue to try to leverage its Kmart stores base, said Picciola.

However, she added, “I don’t think they have the formula figured out quite yet and they’ll continue to work on it.  It’s going to be an uphill battle.  I think it’s very hard to compete with Wal-Mart on price so Kmart really needs to have something that differentiates them in consumers’ minds.”

According to Ayat Shukairy, managing partner of Invesp Consulting, “Sears.com has gone through a number of changes throughout the years, but increasingly they are trying to position themselves as a retailer that is the one-stop shop for all the family needs. Although Target and Wal-Mart still provide the grocery element, Sears has also carved the niche of providing large appliances in addition to toys, clothing, electronics, etc. That’s a big distinction that sets the companies apart.”

Sears began its holiday sales much earlier than other retailers, starting after Halloween.  Black Friday was “a very positive day,” said Aiello, with “very strong customer traffic.”

Picciola said, “It’s going to be a difficult holiday for them.  Retailers are being very competitive on price and consumers are responding to promotional activity.  That will be a challenge for Sears over the next month or so.”

Customers are as undecided on Sears as the analysts are.

“We grew up on Sears,” said Daphne Bennett during a shopping trip to Sears on State Street. “Sears has been around, I think they’re gonna stay around.”

Another shopper, Gail Katz said, “It’s expanded, it’s not a mom and pop shop anymore.”  Katz says she usually finds good deals at Sears, particularly when it has sales and specials, but worries how the store will do given the economy.

While customers like Bennett and Katz find the appeal of Sears in its history, other customers, like Larry Simmons, find the prices too high or do not find what they need at Sears.  Simmons said he believes the prices have increased through the years and chooses to shop elsewhere.

Picciola said, “When it comes to Sears, some of their hard-line brands still have strength.”  With the merger of Kmart and Sears, the company routed some of its reputable brands, like Kenmore appliances, to off-mall Kmart stores.

Analysts surveyed by Yahoo Finance have mixed recommendations. Three rate the stock buy or outperform, three rate it sell or underperform, and one rates it hold or neutral.

Analysts polled by Zacks Investment Research estimate earnings of $1.27 per diluted share for the current year ending in January, but look for $1.60 per share next year.

Sears trades around $71, compared with a 52-week high of $79.75 and a 52-week low of $34.27.

See the full article at Medill Reports

It was an American success story, until the family divided.

Max Gerber immigrated to Chicago from Poland in the early 1900s. Though without a plumbing background, he took a leap and started a plumbing distribution business in 1929 called simply Max Gerber. In 1932 he opened his first factory in Kokomo, Ind. His company, now called Gerber Plumbing Fixtures LLC, was expanding quickly. A few years later he bought a company that he moved to Delphi, Ind., a third business in Woodridge, N.J., and a fourth in Alabama.

When Max Gerber died in 1953 at 56 years old, his family inherited an extraordinarily successful business. Harriett Lewis, Max’s daughter, ran the company until her death at age 84 in 2001. Ila Lewis, her daughter, then took over, relinquishing her role in 2008.

Lewis says the “beginning of the end” was in 1999. The family received a $75 million offer for the business but refused it. Some family members decided they wanted out of the business, so the company bought them out for $30 million. This buy-out required the company to borrow $15 million from its bank.

“When a company spends a lot of money it should be for the benefit of the company, but it put the company in tremendous debt,” Lewis said.

In 2002, Gerber was well known as a trusted distributer to industry professionals. It focused on two business segments: vitreous china, 65 percent of sales, and brass faucets, 35 percent. Lewis said that, around this time, sales were between $111 million and $114 million, but profit was “an ever-moving factor.”

“That number [profit] looks great until you look at the balance sheet, and then it really doesn’t matter,” she said.

Burdened by debt, Gerber had to close a factory in New Jersey and lay off more than 150. The family was struggling while Gerber’s investment banker searched for an equity injection or a buyer.

Stanley Dreyfuss, director of purchasing at SG Supply Co. in Calumet Park, has been a distributer for Gerber for over 25 years. “I knew that there were some financial problems,” he said recently. “I didn’t know the extent of them. The Lewis family, it was their livelihood, it was their history, so they were doing everything they could to keep things happening.”

In 2003, Globe Union Group Inc., an international manufacturer of plumbing products headquartered in suburban Woodridge, purchased nearly all of Gerber’s assets, paid off its debts and retained many of the employees, investing more than $30 million over the next four years.

The buyout came just two weeks before Gerber was going to file for bankruptcy protection.

The president of Globe Union, Michael Werner said, “They didn’t know they were in trouble until after they were in trouble.”

Dreyfuss commented, “I think what they realized is that whatever level of financial problems they had were things that the new owner could help them with: an infusion of cash and ideas; and I think in the long run, it was the best thing for them.”

Globe Union closed the Delphi, Ind. factory and the Alabama pottery, opened a new factory in Laredo, Texas and moved most production to China. The Kokomo, Ind. plant was converted to a distribution center, until mid-2009, when it was closed.

Mitchall Rasky, turnaround team leader with The Private Bank and Trust Co. in Chicago, said that even after the buyout he felt anxious about the company’s hesitation to close factories, and believed that Werner left the Kokomo factory open about 18 months longer than he should have in a desperate attempt to preserve as many jobs as possible.

Under Globe Union, Gerber developed a three-fold strategy. It globalized the manufacturing to reduce costs and improve quality. It introduced over 800 new products, including its gravity-fed Lynx and Viper toilets, “High Efficiency Toilets” like the Avalanche, and hundreds of “green” water-saving faucets and toilets. In an August 2009 issue of Consumer Reports, two Gerber toilets were rated as “best values among top performers.” And finally, Gerber focused on helping its customers sell more by setting up more distribution centers and simplifying the ordering process.

Globe Union’s revenue was approximately $125 million in 2002 before it decided to take on foundering Gerber. Werner banked on two strengths of Gerber: its professional brand reputation and its customer list.

In 2009, Gerber’s sales will be a little over $100 million, with Globe Union’s total revenue exceeding $750 million. Though Werner did not provide exact numbers, he said Gerber’s sales grew nearly 20 percent and multi-million dollar profits were posted between 2003 and 2009.

Russell Atchetee is the kitchen and bath business unit manager at Coburn’s Supply in Texas a firm that has ordered Gerber toilets for over 40 years. Atchetee said Gerber could easily sell its products in “big box” stores like Home Depot or Lowe’s, but it supported the wholesaler instead. “Having done business for so long,” he said, “they become part of the household and you always assume they’re gonna be there. Their emphasis is still on the professional.”

“Like all manufacturers,” Atchetee continued, “they’ve had some production issues over the years. I think initially when they were purchased by Globe Union, they had quality issues, but they did address them.”

Globe Union is dealing with the recession with resilience and surprisingly, success. Kevin McJoynt, director of marketing at Globe Union said, “A depression is a terrible thing to waste.”

Gerber products are typically considered second to lines like Kohler. In this recession, more customers are buying Gerber because it is sold more cheaply to wholesalers, according to Werner. Distributers of Gerber products make more money on their sale and customers buy a product highly rated by Consumer Reports but less costly than the top-line brands.

Werner says 2009 will be Gerber’s most profitable year.

Gerber now has manufacturing facilities in Laredo, Texas, Shenzhen, China and Weifang, China and distribution centers in Bridgeton, N.J., Woodridge, Ill, City of Industry, Calif, Montreal, Canada and Weifang, China.

“Our goal was to take a company with a great heritage and to resurrect it, revive it, and we’ve done that,” said Werner.

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Dollar Tree Inc.’s third quarter profits rose 58.2 percent, beating analyst expectations, partly due to a reduction in Selling, General and Administrative expenses, as well as increased traffic and sales in stores.

The Virginia-based discount variety store had a net income of $68.2 million, or 76 cents per diluted share, in the quarter ended Oct. 31. That compared with year-earlier quarterly income of $43.1 million, or 47 cents per diluted share. The estimate by analysts polled by Zacks Investment Research Inc.was 65 cents per diluted share.

Quarterly revenues were $1.2 billion compared with $1.1 billion in the year-earlier period, an increase of 12 percent.

Bob Sasser, president and CEO of Dollar Tree, said in a press release Tuesday, “The sell-through on Halloween and fall seasonal products was excellent and our stores are now set with an exciting presentation of extreme-value merchandise for Thanksgiving and the Holiday season.”

Dollar Tree’s top selling items were health and beauty care basics, cleaning supplies, party goods.

Brent Rystrom, analyst with Feltl and Company Inc., said in a research note released Tuesday that, “Dollar Tree stores has performed extremely well through the difficult economic environment, and we believe its performance will continue strong as the economy recovers because of the flexibility of its store format and merchandise assortment.”

Charles Grom, analyst with J.P. Morgan Chase & Co., said in analyst notes that, “We [J.P. Morgan] believe that store expansion/investment remains the top priority (midsingle digit annual square footage growth) with the most compelling return profile, followed by share repurchases.”

In the third quarter, Dollar Tree opened 94 new stores, closed eight stores, and expanded or relocated 33 stores.

Net income in the nine-month period ended Oct. 31 was $185.5 million, or $2.05 per diluted share, compared with $124.3 million, or $1.37 per diluted share, in the year-earlier period. Revenue rose 12.7 percent to $3.7 billion from $3.3 billion.

Dollar Tree expects earnings of $3.34 per fully diluted share to $3.43 per diluted share in the current fiscal year. The company expects that annual revenue will be in the range of $5.17 billion to $5.21 billion. Analysts polled by Bloomberg LP estimated earnings of $3.28 per diluted share and sales of $5.2 billion in the current fiscal year, compared with earnings of $2.53 per diluted share and sales of $4.6 billion in the year-earlier period.

By midday Tuesday, Dollar Tree’s stock was at $51.34, up $2.24 or 4.6 percent from the previous day’s close of $49.10.

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Jack in the Box Inc.’s fourth quarter profit increased 51 percent, soaring above analyst expectations, but sales dropped and the company expressed caution about 2010. The stock dropped 7.6 percent.

The San-Diego based restaurant company that operates Jack in the Box and Qdoba Mexican Grill franchises, four of which are in Chicago, had net income of $40.6 million, or 70 cents per diluted share, in the quarter ended Sept. 27.  That compared with a net income of $26.9 million, or 47 cents per diluted share, in the same quarter of the prior year. The estimate by analysts polled by Yahoo Finance was 55 cents per diluted share.

Quarterly sales were $540.3 million compared with $582.7 million in the year-earlier quarter, a decrease of 7.3 percent.

In the fourth quarter Jack in the Box initiated two promotions, including offering two of its burgers for $1.00 each.  It continued its rebranding plan including menu innovation, enhanced facilities and improvements in guest service.

“We do know that we need to offer compelling value especially in this very competitive market place.  We want to offer value that doesn’t erode our margins.  It’s really about profitable sale,” said Linda A. Lang, Jack in the Box’s chief executive officer and chairman of the board, in a conference call.

Lang said of expanding the Qdoba business, “We don’t want to go into these retail centers without tenants being adjacent to us. When the economy improves, we will ramp up growth.”

R.J. Hottovy, an analyst with Morningstar Inc., said, “I’m pleased with the fourth quarter results. They did a good job navigating a tough environment. The thing that I liked was the reimaging program: revamping the interior and exterior of stores. This might have a meaningful benefit, maybe not next year but the year after.  I look at that as a positive.”

Jack in the Box expects earnings of $1.90 per diluted share to $2.10 per diluted share for the year ending in September 2010. Analysts polled by Yahoo Finance estimate earnings of $2.32 per diluted share, and sales of $2.44 billion.

Net income in the 52 weeks ended Sept. 27 was $118.4 million, or $2.05 per diluted share, compared with $119.3 million, or $2.01 per diluted share, in the year earlier. Revenue fell 2.7 percent to $2.47 billion from $2.54 billion.

Jack in the Box’s stock closed Thursday at $18.50, down $1.53.

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Sears Holdings Corp. narrowed its third quarter loss, partly attributed to a reduction in selling and administrative expenses and a reduction in debt. The stock slipped.

The home appliance and specialty retailer’s loss shrank to $127 million, or $1.09 per diluted share, equaling the consensus estimate of analysts polled by Yahoo Finance, in the quarter ended Oct. 31. That compared with a loss of $146 million, or $1.16 per diluted share, in the same quarter of the prior year.

Revenue fell to $10.2 billion from $10.7 billion in the year-earlier quarter, a decrease of 4.4 percent. This beat the estimate of $9.92 billion by analysts polled by Yahoo Finance.

The reduction in selling and administrative expenses reached $101 million.

The third quarter per-share results were impacted by the repurchase of shares at a cost of $224 million and $358 million respectively in the 13-week and-39-week periods ended Oct. 31, charges of $10 million associated with store closings and severance, domestic pension plan expenses of $44 million, and mark-to-market gains on Sears Canada hedge transactions of $2 million.

Sears Holdings closed seven underperforming stores in the third quarter, versus 14 in the third quarter last year.

“For the holiday season expect a promotion environment likely to keep sales and margins in check. We think Sears is going to have to be aggressive in price to effectively compete with Walmart and Target,” said Kim Picciola, an analyst with Morningstar Inc.

She added, “as the economy recovers and as they close some underperforming stores, we expect sales trends to reverse. We expect sales to turn positive at some point and margins to start to expand.”

Analysts polled by Yahoo Finance estimate earnings of 85 cents per diluted share and sales of $43.13 billion in Sears’ current fiscal year ending in January, compared with earnings of 42 cents per diluted share and $46.8 billion in sales last fiscal year.

The company’s net loss in the 39 weeks ended Oct. 31 was $195 million, or $1.64 per diluted share, compared with a loss of $137 million, or $1.07, per diluted share, in the year-earlier period. Revenue fell 8 percent to $30.8 billion from $33.5 billion.

Sears Holdings stock closed Thursday at $72.95, down $2.82 or 3.7 percent.

Sears Holdings Corp. Segmented Third-Quarter Revenue in billions of dollars

NUMBER OF STORES 2009 2008
Kmart: 1,343 $3.5 $3.5
Sears Domestic: 2,180 $5.5 $5.8
Sears Canada: 391 $1.2 $1.3
Total: 3,914 $10.2 $10.7

Sears Holdings Corp. narrowed its third quarter loss, partly attributed to a reduction in selling and administrative expenses and a reduction in debt. The stock slipped.

The home appliance and specialty retailer’s loss shrank to $127 million, or $1.09 per diluted share, equaling the consensus estimate of analysts polled by Yahoo Finance, in the quarter ended Oct. 31. That compared with a loss of $146 million, or $1.16 per diluted share, in the same quarter of the prior year.

Revenue fell to $10.2 billion from $10.7 billion in the year-earlier quarter, a decrease of 4.4 percent. This beat the estimate of $9.92 billion by analysts polled by Yahoo Finance.

The reduction in selling and administrative expenses reached $101 million.

The third quarter per-share results were impacted by the repurchase of shares at a cost of $224 million and $358 million respectively in the 13-week and-39-week periods ended Oct. 31, charges of $10 million associated with store closings and severance, domestic pension plan expenses of $44 million, and mark-to-market gains on Sears Canada hedge transactions of $2 million.

Sears Holdings closed seven underperforming stores in the third quarter, versus 14 in the third quarter last year.

“For the holiday season expect a promotion environment likely to keep sales and margins in check. We think Sears is going to have to be aggressive in price to effectively compete with Walmart and Target,” said Kim Picciola, an analyst with Morningstar Inc.

She added, “as the economy recovers and as they close some underperforming stores, we expect sales trends to reverse. We expect sales to turn positive at some point and margins to start to expand.”

Analysts polled by Yahoo Finance estimate earnings of 85 cents per diluted share and sales of $43.13 billion in Sears’ current fiscal year ending in January, compared with earnings of 42 cents per diluted share and $46.8 billion in sales last fiscal year.

The company’s net loss in the 39 weeks ended Oct. 31 was $195 million, or $1.64 per diluted share, compared with a loss of $137 million, or $1.07, per diluted share, in the year-earlier period. Revenue fell 8 percent to $30.8 billion from $33.5 billion.

Sears Holdings stock closed Thursday at $72.95, down $2.82 or 3.7 percent.

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Perry Ellis International Inc.’s third quarter profits fell 17.2 percent but still beat expectations, partly due to the company’s closing of under-performing businesses.

The Miami-based clothing designer found in departments stores such as Bloomingdales, Macy’s and Nordstrom’s had a net income of $4.1 million, or 31 cents per diluted share, in the quarter ended Oct. 31.  That compared with year-earlier quarterly income of $5 million, or 33 cents per diluted share.  The estimate by four analysts polled by Yahoo Finance was 21 cents per diluted share.

Quarterly revenues were $178.6 million compared with $222.8 million, a decrease of 19.9 percent.

“The bottom line is they went back and went through every company and business when the economy started to slow down and we’re seeing the fruits of that right now,” said Eric Beder, analyst with Brean Murray, Carret & Co. LLC.

Beder said, “They did a very good job of getting rid of unproductive lines and aggressively looking for new opportunities.”

George Feldenkreis, chairman and CEO of Perry Ellis, said in a conference call on Wednesday that the company would consider acquisitions. “A lot of our competitors are in a weak position. Some of the deck has been cleared with companies out of business,” Feldenkreis stated.

Anita D. Britt, chief financial officer of Perry Ellis, said in the conference call, “We have conscientious optimism for the holiday season.”

Perry Ellis expects earnings of 80 cents to 95 cents per fully diluted share in the fiscal year ending in January, an increase from its previously announced guidance of 70 cents to 85 cents per diluted share. The company expects that annual revenues will decrease in the low double-digit range but foresees revenue growth and gross margin improvements in the remainder of the current year.  Analysts polled by Yahoo Finance estimate earnings of 82 cents per diluted share  and sales of $762.4 million in the current fiscal year, compared with a loss of 89 cents per diluted share and $851.3 million in sales last fiscal year.

Net income in the nine-month period ended Oct. 31 was $4.7 million, or 36 cents per diluted share, compared with $8.7 million, or 57 cents per diluted share, in the year-earlier period.  Revenue fell 15.5 percent to $557.8 million from $660.1 million.

Perry Ellis’s stock closed Tuesday at 14.99, up 11 cents.

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Akorn Inc. swung to a loss partly due to lower vaccine sales, but still performed slightly better than an analyst’s expectation. The stock edged up.

The pharmaceutical company, specializing in ophthalmology, anesthesia, antidotes and rheumatology, had a net loss of $5.1 million, or 6 cents per diluted share, in the quarter ended Sept. 30. That compared with a net income of $2.4 million, or 3 cents per diluted share, in the same quarter the prior year.  The estimate by an analyst polled by Yahoo Finance was a loss of 8 cents per diluted share.

Quarterly sales were $19.4 million compared with $31.9 million in the year-earlier quarter, a decrease of 39 percent.

Akorn attributed its net loss to lower vaccine sales, an increase in the unit cost of combined tetanus-diphtheria vaccines, and lower sales to wholesalers.  Also, Akorn took a charge of $1.1 million in the value of warrants issued in conjunction with the company’s renegotiated revolving line of credit and subordinated debt.

Akorn launched two generic drugs: Ketorolac Tromethamine Ophthalmic, the generic form of Acular, used to relieve seasonal allergy eye-itching, with estimated brand sales of $119 million in 2008, and Hydralazine Hydrochloride, used to treat hypertension, with estimated sales of $23 million in 2008.

Vaccine revenue for the quarter decreased by $8.5 million from the year-earlier period. Akorn attributed this to a flu vaccine supply shortage and to strong third quarter 2008 sales after the introduction of a single dose vial tetanus-diphtheria vaccine.  The company will not distribute the flu vaccine after the 2009 flu season.

The Akorn-Strides LLC joint venture provided Akorn $500,000 in equity earnings and sales of approximately $3.8 million during the third quarter.

The company did not provide fourth-quarter guidance but an analyst polled by Zacks Investment Research has a full-year estimate of a 17-cent loss per diluted share compared with 2008 full-year earnings of 7 cents per diluted share.

In the nine-month period ended Sept. 30, Akorn lost $22.7 million, or 25 cents per diluted share, compared with a loss of $6 million, or 7 cents per diluted share, in the year-earlier period.  Revenue fell 17 percent to $57.7 million from $67.6 million.

Akorn’s stock closed Tuesday at $1.61, up 6 cents or nearly 4 percent.

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Hospira Inc. saw a 42 percent third-quarter profit increase mainly due to the launch of oxaliplatin, an injectable chemotherapy drug, as well as restructuring and cost cuts.

The company’s profit rose to $116.2 million, or 71 cents per diluted share, in the quarter ended Sept. 30, up from $81.8 million, or 51 cents per diluted share, in the year-earlier period. Analysts polled by Yahoo Finance had a consensus estimate of 69 cents per diluted share.

Sales at the Lake Forest specialty pharmaceutical and medication delivery company increased to $1.01 billion from $925.5 million, an increase of 9 percent.

Oxaliplatin was launched by Hospira in the U.S. in August and is a generic version of Sanofi-Aventis SA’s Eloxatin, an injectable colon cancer drug that had $1.4 billion in sales in 2008. Increased sales volume of Precedex, a sedation drug, also helped Hospira’s profits, as well as the introduction of other products.

In March, Hospira announced a two-year restructuring and cost-cutting plan that includes the closing of manufacturing plants and laying off about 10 percent of its global workforce. Hospira said it expects restructuring costs between $140 million to $160 million during that period.

Hospira closed three manufacturing plants between 2007 and March 2009 and is in the process of closing a fourth plant in Morgan Hill, Calif. For the quarter ended Sept. 30, restructuring costs were $13.8 million compared with $4.5 million in the year earlier quarter.

“Looking ahead to 2010, that one-time boost from oxaliplatin will fade quickly as more players enter the market said Morningstar Inc. analyst Brian Laegeler. “As of yet there’s no change in hospital cap ex spending, given the uncertainty of the economic recovery right now, so those factors will weigh against growth in 2010.”

In the nine months ended Sept. 30, Hospira’s capital expenditures were $118.7 million, compared with $126.9 million in the year-earlier period.

Analysts’ estimates compiled on Yahoo Finance have a fourth-quarter consensus of 83 cents per diluted share. A year ago, Hospira’s earnings were 78 cents per diluted share.

The company did not provide fourth-quarter guidance but said it expects to earn between $2.25 per diluted share and $2.30 per diluted share for the full year. Hospira’s earnings guidance at the end of the second quarter was between $2.10 per diluted share and $2.15 per diluted share.

On an adjusted basis, the company expects to earn between $2.85 per diluted share and $2.90 per diluted share this year. Analysts polled by by Zack’s Investment Research have a full-year consensus of $2.84 per diluted share.

In the nine-month period ended Sept. 30, Hospira earned $307.2 million, or $1.89 per diluted share, compared with $216.3 million, or $1.34 per diluted share, in the year-earlier period. Sales rose 4 percent to $2.82 billion from $2.72 billion.

Hospira’s stock closed Tuesday at $47.11, up 81 cents from Monday’s close.

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The Leading Economic Indicator Index increased 1.0 percent in September, the sixth straight monthly increase and a sign that economic conditions will continue to improve in the near term, the Conference Board said.

Economists surveyed by Bloomberg had expected a 0.8 percent gain in the index, up from a revised 0.6 percent gain in August, originally reported as a 0.4 percent increase.

Eight out of 10 leading indicators increased in September. The interest rate spread between 10-year Treasury bonds and overnight federal funds was the largest positive contributor, demonstrating a healthy yield curve. The only two negative leading contributors were average weekly manufacturing hours and building permits.

“This is going to be a long, tough, slow recovery. The good news is, it’s begun,” said Ken Goldstein, Conference Board economist. He said Americans may not feel the recovery any time soon, but noted that natural gas prices have plummeted and winter heating bills won’t be as high in the Midwest.

Asha Bangalore, vice-president and economist at Northern Trust Company, agreed. “Once again, the index has provided valuable guidance about the course of the economy,” Bangalore wrote in a note Thursday. “This string of gains is a convincing indication that an economic recovery is underway.”

Bangalore noted that the index of leading indicators has moved up 1.8 percent on a quarterly basis from a year ago, the first such increase since the fourth quarter of 2006.

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The decline in economic activity in the Chicago area has ended and many businesses remain cautiously optimistic for the remainder of 2009, according to the Federal Reserve’s Beige Book.

The Federal Reserve’s beige book is a summary of economic activity gathered from the Fed’s 12 districts. The beige book, noted for the color of the report’s cover, is published eight times a year.

Economic activity “improved marginally” in the Chicago district during September and early October, according to the report. Business and consumer spending, excluding vehicle purchases, decreased at a slower rate, and credit conditions improved but remain tight. Manufacturing activity showed more signs of “firming,” the report noted.

“We are improving in the sense that we are probably stabilizing a lot of things that have been in free fall,” assured Adolfo Laurenti, deputy chief economist for Mesirow Financial Holdings Inc.

The steel industry is experiencing an increase in demand due to lean inventories and strong demand from the auto sector, the report noted. One contact in the industry told the Federal Reserve that previously idle capacity would be ramped back up as a result but that it would take time to do so. Automakers and auto suppliers were helped by the Cash-for-Clunkers program, but some suppliers said that fourth-quarter orders are “shaping up to be weaker.” Automakers, however, expect demand to slowly improve the remainder of the year and are maintaining plans to increase production.

“The best news that we’re seeing right now is coming from manufacturing,” Laurenti said.

Laurenti believes that even people who have avoided splurging may do so during the holiday season. Companies will need to restock their shelves after the holiday boom, although he said he’s not sure if the product demand will be sustained or will fade at the beginning of the new year.

The Beige Book said health care, education and information technology experienced “notable” hiring.

“There has been a dearth of skilled workers for these positions even before the recession,” said Fred Hoch, president of the Illinois Technology Association, a trade association for information technology industry.

The Fed reported that the rate of job loss and reduction in hours worked continued to slow.

However, Bill Hummer, chief economist for Wayne Hummer Wealth Management, expects the unemployment rate to remain around 9 percent in Illinois through next year. It is currently 9.9 percent in the state and 9.6 percent nationwide.

“Employers are cutting payrolls to preserve profit margins and that’s not likely to change too soon,” he said.

Though higher credit standards are still a challenge, Laurenti said it’s a good time for businesses to look for merger and acquisition opportunities. Though there’s not much capital available, if a company is financially positioned to buy, it can probably buy companies at a very cheap price right now, he said.

Residential real estate conditions continued to improve in September and October, with home sales increasing and housing inventory coming down, according to the report. Commercial real estate conditions, however, worsened.

An increase in energy prices was reported, although a Fed business contact noted that “very high levels of stored natural gas will likely lead to lower heating costs this winter.”

Agricultural price pressures were mixed, according to the Beige Book, and early reports indicate a lower-than-expected corn yields. Harvesting the Chicago district’s corn and soybean crop will take longer than normal due to wet weather and late maturity of crops.

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CHICAGO | In a bankruptcy court hearing Tuesday, Judge Pamela S. Hollis gave permission for Perpetua-Burr Oak Holdings of Illinois, L.L.C., owner of Burr Oak Cemetery in Alsip, to sell the cemetery that became infamous this summer for a grave desecration scandal.

Perpetua filed for bankruptcy protection in September in the wake of a criminal investigation. The company told Hollis it had hired American Cemetery/Mortuary Consultants Inc. as a consultant to assist in selling the cemetery.

Attorney Robert Fishman, of Shaw Gussis Fishman Glantz Wolfson, in Chicago, said Perpetua doesn’t yet know of any buyers but hired a consultant with expertise in cemeteries.

“All the pressure of the world is on us,” said Fishman during the hearing, when Paul J. Gaynor, chief of the Illinois attorney general’s Public Interest Division, expressed concern too much money is being spent on court costs.

Gaynor said he wants to ensure “as much as possible for victims. The state is concerned about people and families.”

Burr Oak Cemetery opened its gates at 9 a.m. Monday to more than 50 lawyers representing claimants in the grave desecration scandal. The cemetery has been closed to the public since the scandal broke this summer.

Attorney Larry Rogers Sr. of Chicago firm Power Rogers Smith, representing claimants, said the goal of opening up the cemetery for legal counsel was to provide the opportunity to locate family gravesites for his clients.

He lamented it was difficult to find anything useful because many graves are unmarked and a database being compiled by the sheriff’s office is not yet complete.

The cemetery has a primarily black clientele. Among prominent Chicagoans buried there are Emmett Till, Dinah Washington along with Negro League baseball players Jimmie Crutchfield and John Donaldson.

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St. Louis-based Monsanto Co., producer of seeds and the popular herbicide Roundup, experienced a wider net loss of $233 million, or 43 cents per diluted share, in the quarter ended Aug. 31, compared with a loss of $172 million, or 31 cents per diluted share, in the year-earlier period.  The company reported increased profit for its full fiscal year but predicted lower earnings after restructuring costs in its current fiscal year.

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Chicago bankruptcy filings increased 38 percent in September from a year earlier. There is no sign of decline.

“I can only predict there’s more to come,” said Kenneth Gardner, clerk of the Northern District of Illinois Bankruptcy Court.

In September 4,302 cases were filed, compared with 3,121 a year earlier and only 1,884 cases in September 2007. Last month’s Chapter 11 filings, mostly used by corporations seeking to reorganize while protected from creditors, increased the most. There were 34 Chapter 11 filings in September 2009 compared with 14 in September 2008.

This jump could be attributed to the increasing number of individuals forced to utilize Chapter 11 bankruptcy because of their high income or large debt, a result of the 2005 amendments to the Bankruptcy Code. “I think this is going to continue until the recession runs its course,” said Chicago bankruptcy attorney Jay Fortier.

Chapter 13 filings by wage-earners, however, decreased to 992 in September from 1,052 in September 2008. In Chapter 7, liquidation, 3,152 cases were filed last month, compared with 2,055 a year earlier.

Bankruptcy filings peaked in 2005, in anticipation of the tighter restrictions on bankruptcy enacted that year. After a sharp decline in 2006, filings have increased each year at an annual rate of about 40 percent.

Kara Krystavel, public service team trainer at the Chicago Bankruptcy Court, said that on the last day of September alone, 481 new cases were filed.

Paul Bach, a bankruptcy attorney in Chicago, said there’s no simple answer for why there is an increase in bankruptcy filings, but he agreed with Gardner’s comment that bankruptcy filings won’t decrease anytime soon.