Brightstar's good year prompted founder, Chairman and CEO R. Marcelo Claure to take the firm public. It filed its Form S-1 in April, the preliminary step for an initial public offering. It had sought to go public once before, but withdrew the effort in October 2004.
Alas, the company, profiled on Page 34, remains silent about any elation over the bounce from an $800 million loss in 2009 to a $1.8 billion gain in 2010, the why and how it recovered from that loss and its anticipation about going public. Once the initial public offering process starts, a company must go into a quiet period, which means none of a firm's executives can give interviews about the state of the company.
Brightstar is a wireless services company that operates in 50 countries. It has branched out from distribution to focus on services ranging from manufacturing and assembly to portfolio management. It employs more than 3,500 people.
Sectors Show Health
The HispanicBusiness 500 sector list offered more bright news. In 2010, only 18 of the 90 companies on the sector lists posted decreases in revenue, compared to 46 companies that reported revenue losses in 2009. Eight of the nine sectors showed gains. Only the transportation sector posted a loss, minus 4 percent from 2009 to 2010. But that loss was not as great as the 6 percent loss in 2009.
Some of the sector gains were impressive. The energy sector jumped 78 percentage points to post a 36 percent gain in 2010. The wholesale sector jumped 67 percentage points to post a 51 percent gain. And the automotive sector leaped 46 percentage points to post a 46 percent gain. Finance was the only sector in which revenues did not grow as much. In 2009, finance posted a 7 percent gain, but in 2010, it posted only a 4 percent gain.
As the national job growth figures for the first five months of 2011 show, good news needs to be tempered. The nationwide construction sector posted only 7,000 new jobs from January through May and transportation and warehousing lost 4,000 jobs. The sector that consistently showed gains in jobs every month from January through May was health care. All told, that sector added 138,000 jobs. The retail sector added 94,800 jobs, including 57,000 in April, but in May the sector tumbled, losing 8,500 jobs. While manufacturing was a bright spot through April, adding 128,000 jobs, it stumbled in May, losing 5,000 jobs. Leisure and hospitality had been doing moderately well, but plunged in May, losing 6,000 jobs.
The Seesaw Economy
Some good news during the first few months of 2011 seemed to point to an economy getting off to a slow but steady pace. The Conference Board's Leading Economic Index had risen 0.9 percent in February and 0.7 percent in March. Then it got a jolt, declining 0.3 percent in April. The next economic index wasn't due out until June 15.
Ken Goldstein, economist at The Conference Board, said in a news release about the April plunge: "Economic growth will likely continue through the summer and fall, but the pace of economic activity may be choppy."
Likewise, Kiplinger offered a cautious assessment of the economy over the next few months. In its May 21 economic outlook, Kiplinger noted that spiking oil prices and poor weather contributed to the gross domestic product growing a sluggish 1.8 percent in the first quarter. If oil prices don't go much higher, Kiplinger said, GDP growth could be 3 percent for the year.
But a 3 percent annual growth rate won't make much of a dent in unemployment, Kiplinger said. And unemployment has been one of the factors keeping the economic recovery sluggish. To lower unemployment, which rose to 9.1 percent in May, GDP would need to grow at 4 percent for a full year, Kiplinger noted. Even if growth reached 3.5 percent, it would take five to six years for the job market to normalize, Federal Reserve Chairman Ben Bernanke has estimated.
Add in a soft patch in business spending that could decline to last year's level, a 5.6 percent increase; softness in construction spending until vacancy rates for offices, industrial space and retail decline; and consumer spending in the first quarter slowing to an annual rate of 2.7 percent, and the jury is still deliberating if this is an economy recovering or working its way to stagnation.
Consumer spending accounts for two-thirds of GDP, but two factors have consumers cautious on spending—prices and hourly earnings. Gas prices alone accounted for half the 0.4 percent rise in April's Consumer Price Index, meat and poultry have risen 7.6 percent, and dairy products are up 6.3 percent over the year. Earnings, on the other hand, increased only 1.9 percent over the past 12 months. That isn't keep up with inflation, which increased about 3 percent over the same period.
Despite 2010's better showing by the HispanicBusiness 500, data suggest the time for breathing normally amid a nicely recovering economy remains a goal yet to be reached.
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