HI, Hip v. Historic

  The Earnings Enigma
 
Financial reporting is half art and half a labor of tedious and meticulous scrutiny, and the agonizing translation of numbers and what they mean.

A reader took issue with this headline from a local newspaper, and rightly so.

Huntington Ingalls' profit drops 25% in fourth quarter

The headline reflects one piece of a financial report, which taken as presented, gives a distorted picture to a reader.

You can read a synopsis of the quarterly and annual report here for HI, the largest private employer in Virginia and America’s largest military shipbuilder.

If the company were reporting quarterly financials, this headline may pass muster.

But the company had released its annual figures and the drop in “earnings” for the final quarter of 2012 was one piece of the company’s overall financial performance for the year.

The emphasis on the fourth quarter in the headline hones in on a specific time period. But it doesn’t indicate a trend or a lousy future performance.

In fact, the company’s stock on the day it released its financials opened at $45.47 per share and closed at $47.12 per share.

So the market ignored the last quarter drop in earnings and reacted to the overall picture of the company for the year.

Last year was the first full year the company was in operation, so comparisons can be dicey.

The company – the merger of Newport News Shipbuilding and Ingalls Shipbuilding – was spun off as a publicly traded company in March 2011.

Its shares are traded on the New York Stock Exchange under the symbol HII.

Yesterday, the company’s stock opened at $48.37 per share and closed at $49.17 per share.

A Façade of a Façade 

Decker Building facade

In 2008, LTD Management Co., the Chesapeake hotel developer and owner, stepped forward to undertake the construction of a hotel and conference center at Main and Granby Streets.

At the time, Malay Thakkar, managing partner of the company, said the façade of the 88-year-old Decker building, which was owned and occupied by a law firm headed by Peter G. Decker Jr., will be a part of the new hotel, according to an article in The Virginian-Pilot.

It was one of the three historic structures torn down for the proposed hotel and conference with an attached parking garage.

Plagued by financial problems, LTD pulled out of the project, forcing the city to find another partner in its quest to have a hotel and conference center in downtown Norfolk.

Then Bruce Thompson, CEO of Gold Key/PHR Hotels and Resorts, appears, promising to invest in the development of a hotel and conference center.

“We will begin work with our designers immediately to develop a very unique urban hotel and restaurant complex,” Thompson said in the press release, announcing the deal between he and the city of Norfolk.

SLS Hotel in Beverly Hills

“Inspirations from the design will come from SLS HOTEL in Los Angeles, W Hotels, the Delano Miami, the Hudson in New York City and other iconic inner city properties with a little ‘edge’ around the country,” Thompson said.

Historic versus hip.

So will the city go hip or historic?

My bet is on hip.