November 20, 2000
MAINE STOCK TRENDS
UnumProvident stock drops on third quarter results
Copyright © 2000 Blethen Maine Newspapers Inc.
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UnumProvident (UNM-27.81) released its third quarter results last week. It was the last of Maine's big publicly traded companies to release Q3 results. The results, after tax operating earnings of $.60 per share, were pretty much in line with expectations. Last year in the third quarter, the company earned $.70 per share.
Although earnings were in line with expectations, the stock dropped about 6.2 percent for the week amid concern about deterioration in key product lines.
The company's lead line, long-term disability insurance, continues to fall off since the June 30, 1999 merger. Excluding special charges, the group disability line reported income of $72.7 million versus $81.4 million in 1999. The lower results for group disability are primarily due to higher benefit payments and an increase in the amortization of deferred policy acquisition costs (DPAC) due to lower persistency in the quarter. Two other key lines, accidental death and dismemberment (AD&D) and long-term care also saw declines in income, $48.1 million versus $63.3 million in 1999.
Another Maine company that reported earnings last week was Maine Public Service (MAP-26.00). Earnings increased to $.53 per share for the third quarter this year, compared with a loss of $.19 per share in the same quarter a year ago. Earnings for the nine months ending September 30 stand at $1.93. This compares with $1.34 at this time last year. Total revenues for the quarter were $19.1 million versus $15.3 million for the previous year.
Maine Public is the electric utility serving northern Maine. The company's Energy Atlantic subsidiary markets electricity. Energy Atlantic won the "standard offer" contract for Central Maine Power's franchise territory. Maine Public's stock has been moving up steadily from $19.13 per share late last June to the current $26.00
On June 30, Bangor Hydro Electric (BGR-24.75) announced it would sell to Emera, a Canadian utility company, for $26.50 per share, cash. This past August 31, Energy East (EAS-20.28) bought Central Maine Power Company's parent company, CMP Group, for $29.50 cash. Presque Isle's Maine Public Service Co. is Maine's last remaining publicly traded electric utility.
I-Many (IMNY-19.38) fell again last week, dropping 16.22 percent without any news.
In case you missed it last week, Banknorth Group (BKNG-18.00) chairman, William Ryan, filed earlier this month to sell 334,928 shares, or about one-half of his personal holdings of Banknorth common stock. The filing came shortly after three other company executives either sold or filed to sell sizable amounts of their own holdings. This past week, Banknorth announced that its directors have authorized the repurchase of up to 4 million shares of its outstanding stock. That authorization represents about 3.0 percent of all outstanding Banknorth stock. The company has already repurchased 625,000 of the 4 million shares.
Banknorth shareholders may be confused over these mixed signals: executives selling while the bank is buying its own stock in the open market. The merger between Banknorth and Peoples Heritage Financial Group, which was completed earlier this year, prohibited the company from buying its own stock for much of the year. Now that the restriction is over, company stock repurchases can take place. The bank has a history of repurchasing its own stock whenever it feels the stock represents a good value and when it can do so. Executives seem to be merely diversifying their holdings. They, too, had merger-related restrictions on when they could transact in Banknorth shares. But, as mentioned last week, the insider sales make it seem unlikely that any acquisition of Banknorth Group — at least on favorable terms — is on the horizon.
Speaking of press releases and banks, we want to correct something in last week's column regarding the third quarter earnings release from First Coastal Corporation (FCME-8.50). We reported that the company's net income of $298,000 for the three months ending Sept. 30 included a provision for loan loss credit of about $134,000. In fact, there was actually a recovery in the portfolio. This means the reported third quarter net income would have been actually $134,000 lower had it not been for the loan loss recovery.
Though there was a recovery in the portfolio, non-performing assets have grown by $118,000 so far this year, an increase of 21 percent. First Coastal's stock price was unchanged last week. Northeast Bancorp (NBN-8.00) held its annual meeting in Auburn last week. Northeast observes a fiscal year that ends on June 30, which is why its annual meeting takes place in the fall.
Merrill Merchants Bank (MERB-10.25) increased its fourth quarter dividend last week to $.07 per share. That represents an increase of 17 percent over the same period last year.
There hasn't been much news to report at Intelligent Controls (ITC-1.50) in Saco for some time. Despite this, the stock moved up 20 percent last week, moving up from its low of $1.19 per share.. The company, also known as INCON, fell to a low of $1.19 per share not too long ago.
The company, also known as INCON, makes underground storage tank monitoring devices. Company officials announced a couple of weeks ago they had demonstrated the capabilities of their new Internet-ready, remote fuel management solution at the National Association of Convenience Stores' industry trade show in New Orleans. The device has been named System Sentinel(TM) AnyWare, for its ability to help users access and deploy distributed resources quickly and effectively. It takes advantage of new wireless, internet and pervasive computing technologies to provide instant access to site information, and to company personnel.
IDEXX Labs (IDXX-24.44) announced Friday that its VetConnect subsidiary will be the exclusive provider of veterinary practice management software and services to National PetCare Centers' nationwide veterinary practices. The stock finished the week down about 2 percent.
For most companies, November 15 was the deadline for filing 10-Q's and thus, there was no shortage of reading material released this past week. 10-Q's are the quarterly reports that publicly traded companies must file with the Securities and Exchange Commission.
Brad McCurtain is president of Maine Securities Corporation. Maine Securities Corporation is an investment firm specializing in Maine's securities. From time to time, the corporation, its employees, and its clients may buy, hold, and/or sell positions in companies mentioned herein. As a regulated securities broker/dealer, the company and its employees are required to abide by all securities regulations at all times when communicating with the public. Brad McCurtain may be reached at info@MaineSec.com. Web site: http://www.MaineSec.com