Finance Blog number 1

BJC Healthcare 24,815

SSM Health Care 14,686

Mercy Health 10,311

St. Anthony’s Medical Center

4,365

Express Scripts 4,154

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More area foreclosures

The number of Americans who signed contracts to buy homes fell for the third straight month in September after the spring-and-summer peak buying season failed to entice new buyers.

The National Association of Realtors says its index of sales agreements fell 4.6 percent last month to a reading of 84.5.

A reading of 100 is considered healthy. The last time the index reached that high was in April 2010, the final month that buyers could qualify for a federal tax credit that has since expired cash advance no fax.

Contract signings are usually a reliable indicator of where the housing market is headed. There’s typically a one- to two-month lag between a contract and a completed deal.

But the Realtors group said a growing number of buyers have canceled contracts.

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Pharmacy benefit manager Express Scripts said it expects to keep more than 95 percent of its prescription volume in 2012 even though it plans to stop doing business with Walgreen Co., the largest drugstore chain in the U.S.

St. Louis County-based Express Scripts and Walgreen have been unable to come to terms on a new contract to replace a deal that expires Dec. 31. Express Scripts pays Walgreen to fill prescriptions, but after the contract ends, Walgreen won’t fill prescriptions for most Express Scripts members.

The dispute became public in June, after Walgreen said it would stop handling Express Scripts claims because Express Scripts would not pay it enough money and wanted too much control over their relationship.

Walgreen runs close to 7,800 stores, and it fills about 20 percent of all prescriptions in the U.S. Walgreen has said it would lose $5.3 billion in annual revenue by parting with Express Scripts.

Express Scripts said Tuesday its profit rose 8 percent in the third quarter as revenue increased and selling, general and administrative costs fell. The St. Louis company’s net income grew to $324.7 million, or 66 cents per share, from $301.5 million, or 56 cents per share. It earned 79 cents per share excluding one-time costs, most of which were connected to its planned acquisition of competitor Medco Health Solutions Inc. Revenue grew 3 percent $11.57 billion from $11.25 billion.

Analysts expected Express Scripts Inc. to report a profit of 76 cents per share and $11.28 billion in revenue, according to FactSet.

The company handled 184.8 million adjusted prescription claims during the quarter, down 1 percent from a year ago. Medication use has declined because of high unemployment and because some consumers are skipping trips to the doctor to save money. The company handled 556.6 million adjusted prescriptions in the first three quarters of 2011, also down 1 percent from the same period last year. Adjusted prescriptions count 90-day mail order prescriptions as three one-month prescriptions.

Earlier this month the company cut its annual profit guidance because of those trends and said it was not filling as many prescriptions as it had expected. Express Scripts said Tuesday it still expects to earn between $2.95 to $3.05 per share in 2011. Analysts expect $3.01 per share, on average.

The company currently expects to fill less than 750 million adjusted prescriptions in 2011, down from 753.9 million in 2010. Express Scripts expects medication use in 2012 to be about equal to current levels. It said total adjusted prescriptions could be unchanged from 2011, or they could grow as much as 2 percent. It did not provide a profit forecast, citing its planned $29.1 billion acquisition of Medco.

The companies announced the deal in July, and Express Scripts hopes to complete the purchase in the first half of 2011. Antitrust regulators and Congress are scrutinizing the transaction. The companies have said the larger Express Scripts would be able to use its size to save money for consumers and health plans, but critics have said the deal will reduce health care choices and may not deliver the savings.

If the cash-and-stock deal goes through, the new Express Scripts Holding will be the biggest pharmacy benefits manager in the U.S. by far, with about a 30-percent share of the market. Combined, Express Scripts and Medco handled about 1.7 billion prescriptions in 2010.

Express Scripts said its results in the third quarter included 8 cents per share in professional fees and financing costs related to the Medco deal. The remaining charges including 4 cents per share in expenses related to its purchase of NextRx in April 2009, and a penny per share in other amortization costs.

Shares of Express Scripts fell $1.98, or 4.9 percent, to $38.47 on Tuesday. In aftermarket trading, the stock picked up $1.23, or 3.2 percent, to $39.70.

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World stock markets jumped Monday, buoyed by resilient economic indicators from Asia’s two biggest economies and hopes of progress in resolving Europe’s debt crisis.

Oil prices rose above $88 a barrel. The dollar fell against the euro but rose against the yen.

European shares advanced in early trading. Britain’s FTSE 100 gained 0.4 percent to 5,512.34 and Germany’s DAX added 0.9 percent to 6,021.92. France’s CAC-40 rose 0.5 percent to 3,188.44. Wall Street was headed for another day of gains, with the Dow Jones industrial average 0.3 percent higher at 11,795 and S&P 500 futures gaining 0.3 percent to 1,238.30

Asian shares posted solid gains earlier in the day as economic data from Japan and China showed a measure of strength.

Japan’s Nikkei 225 index added 1.9 percent to close at 8,843.98 after the government said exports grew for a second straight month in September. The country’s trade suffered a five-month decline in the wake of the March 11 earthquake and tsunami that devastated northeast Japan.

Mainland Chinese shares rose after HSBC said its preliminary China Manufacturing Purchasing Managers Index, which measures industrial production, rose to 51.1 in October from 49.9 in September. A result above 50 indicates expansion but the preliminary indicator is often subject to substantial revision.

The Shanghai Composite Index was 2.3 percent higher at 2,370.33 and the smaller Shenzhen Composite Index climbed 1.9 percent to 977.03.

Hong Kong’s Hang Seng soared 4.1 percent to 18,771.82 and South Korea’s Kospi shot up 3.3 percent to 1,898.32. Benchmarks in Singapore, Taiwan, Australia, India, Indonesia and the Philippines were also higher.

In Europe, leaders are to meet Wednesday to hammer out a concrete resolution to the region’s debt problems, including ways to fortify the euro 440 billion ($600 billion) bailout fund to help prevent larger economies that use the euro common currency, such as Italy, from being dragged into the crisis.

Weeks of intensive discussions by European leaders have so far failed to produce a decisive outcome.

“Markets will remain nervous ahead of Wednesday’s EU summit, hoping that officials can settle their differences and emerge with a concrete solution credit report. In this respect, the risk of disappointment is high,” Credit Agricole CIB said in a research note.

South Korean constructions shares rose on expectations that the death of Libyan leader Moammar Gadhafi would lead to the resumption of construction projects in the North African country, Yonhap News Agency reported. Daewoo surged 5.5 percent. Hyundai Heavy Industries jumped 7.3 percent.

Chinese banking shares soared ahead of earnings reports to be released this week, analysts said. Hong Kong-listed Agricultural Bank of China jumped 8.5 percent, and Industrial and Commercial Bank of China, the world’s largest bank by market value, gained 5.5 percent.

Linus Yip, strategist at First Shanghai Securities in Hong Kong, said speculative investors appeared to be scooping up what were thought to be bargain-priced Hong Kong stocks.

“Today, there is some bargain-hunting for sectors like the Chinese insurance sector and Hong Kong property,” he said. Hong Kong-listed Ping An Insurance gained 6.9 percent. China Overseas Land & Investment Ltd. was up 9.3 percent.

In the U.S. on Friday, enthusiasm for stocks was on the upswing amid some positive third-quarter earnings reports from U.S. companies, which come despite a weak economy. Among S&P 500 companies reporting so far, seven out of ten have posted higher profits than expected.

The Dow Jones industrial average jumped 267.01 points, or 2.3 percent, to 11,808.79. The Dow is now up 2 percent from where it started 2011. Before Friday’s surge, it was down for the year. The Dow has risen for four weeks straight, the first time that has happened since January.

In currencies, the euro rose to $1.3889 from $1.3864 Friday in New York. The dollar rose to 76.22 yen from 76.12 yen.

Benchmark crude for December delivery was up 96 cents at $88.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to settle at $87.40 in New York on Friday.

Brent crude was up 74 cents at $110.30 a barrel on the ICE Futures Exchange in London.

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OTTAWA — Statistics Canada says the country’s annual inflation rate edged up a notch to 3.2 per cent last month as the cost of most consumer goods the agency tracks cost more from a year ago.

On a month-to-month basis, consumer prices rose two-tenths of a cent between August and September.

The increases were moderate, but if there was an alarming signal in the report it was that the Bank of Canada’s core inflation index shot up three-tenths to 2.2 per cent.

That’s the largest annual gain since December 2008, and puts core inflation above the central bank’s two per cent target for the first time since February 2010.

The major drivers of inflation remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago.

But the agency says other items also cost more, including shelter, the cost of transportation, car insurance, recreation and education, alcohol and tobacco, health and personal care and clothing and shoes.

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Europe’s financial fire brigade is hiring.

Successful candidates should have the “ability to develop innovative legal solutions,” an “eye for detail,” and the “ability to argue convincingly and achieve a consensus among colleagues and third parties,” proclaims the website of the European Financial Stability Facility.

And those skills could come in handy pretty quickly.

After this Sunday’s summit of EU leaders, the EFSF will wield massive financial power to contain the eurozone’s debt troubles and keep them from plunging the global economy into another recession and putting thousands of people out of a job.

And yet the bailout fund, backed by euro780 billion ($1.1 trillion) in financial guarantees from the 17 euro states, has a tiny staff _ 18, counting two secretaries. That is expected to increase slightly in coming months, taking the core team behind Europe’s main anti-crisis weapon to 25.

After already funding large parts of the bailouts for Ireland and Portugal, the EFSF will soon take over the emergency loans to Greece _ some euro27 billion ($37 billion) left over from the first rescue package with several tens of billions expected to come through a second loan program.

More importantly, the fund is now the number one institution charged with stopping the debt crisis from engulfing large economies like Italy and Spain, helping to stabilize wobbling banks across the continent and protect the future of the euro.

That role could turn it into a bond insurer or see it manipulate government bond prices like a central bank.

The fund’s headquarters, in a nondescript office block on the outskirts of Luxembourg city, look a lot less spectacular than one may expect. Apart from the blue and yellow EFSF labels on the mail boxes, there is nothing to suggest that actions taken within the building could determine the fortunes of the 330 million citizens of the eurozone.

The fund was hastily set up in the summer of 2010, when the currency union’s leaders realized that their initial euro110 billion ($152 billion) bailout of Greece was not enough to stem market panic over high debt in several euro countries.

Because creating an international institution would have taken too much time, the EFSF was registered as a private company under Luxembourg law, taking over an empty suite of offices from the European Investment Bank.

More than a year later, the premises haven’t changed much _ dark blue carpet, gray hallways and papers piled high in offices. In expectation of the new staff and responsibilities, the EFSF recently took over another corner of the EIB’s office space that still stands empty.

Presiding over the whole thing is Chief Executive Klaus Regling, a gray-haired EU veteran who helped set up the single currency in the 1990s and then unsuccessfully fought to protect the union’s rules on government spending a decade later.

It was the limitations of those rules that allowed countries like Greece to run up massive debts and failed to counteract Ireland’s property bubble and Portugal’s pervasively low growth _ the very problems Regling is now trying to solve.

“It was totally unpredictable how this would evolve,” says Regling, as he thinks back to June 8, 2010, when he interviewed for, was offered and accepted the job at the helm of a yet-to-be-created institution within less than 24 hours quick payday loans. “I was actually worried that it may become too boring.”

No such luck.

Instead, the fund has seen its role evolve from acting as a financial backstop so big that its mere presence would prevent it from ever having to be used _ that hope was disappointed when Ireland asked for a bailout last November _ to essentially turning into a European Monetary Fund, the eurozone’s lender of last resort for cash-strapped governments.

“Of course it’s exciting to be in the middle of the storm,” says Juha Kilponen, one of the EFSF’s finance experts who came on board just as Ireland asked for help. “But of course the problems are very big.”

At their summit this Sunday, eurozone leaders are expected to set up a complicated scheme that could increase the EFSF’s firing power so it is fit for the next hot phase in the fight against the crisis.

It’s in moments like these that the staff’s legal and financial expertise will come into play. The EFSF has to operate through a complicated web of European rules and treaties where 17 governments, central banks and bureaucracies in Brussels each have a say _ and often widely divergent opinions.

The fund’s euro780 billion in guarantees translate into euro440 billion ($608 billion) it can actually give out in loans, since it needs extra guarantees to obtain the AAA-rating that allows it to raise money at low interest rates.

Of those euro440 billion, euro43.7 billion have already been promised to Ireland and Portugal. Some euro100 billion will likely go to Greece, leaving the EFSF with just under euro300 billion to contain the crisis.

That’s way too little to recapitalize ailing banks across Europe, get them ready for a potential default of Greece, and buy up Spanish and Italian bonds to keep the countries’ funding rates down.

Instead, the EFSF could start acting as an insurer for bond issues from those countries, using its guarantees as protection for banks and other investors against a first round of potential losses. That could theoretically multiply the fund’s financial impact up to around euro1 trillion, analysts say.

Such a sum was unimaginable when Kalin Anev was asked in May 2010 to help set up the EFSF. Originally an employee at the EIB, Anev was the one who registered the bailout fund with the Luxembourg chamber of commerce, organized phone lines and computers and helped hire the rest of the staff.

“It shows how fast Europe also can act, if they want to do something,” Anev, now the EFSF’s secretary general and institutional memory, says not without pride. “In a month’s time we were able to set up this very complex organization.”

And that organization is proving to be an attractive place to work. For each job ad, the EFSF receives 200 to 400 applicants.

By now, the fund has employees from Germany, Finland, France and the Netherlands, but also from Portugal, Italy and Spain.

And although resistance to the bailouts has been growing both in rich and poor countries, Kilponen and Anev insist that the reaction they get to their job is mostly positive.

“A lot of people have trust and hope that we do the right job,” says Anev. “So most people, they wish you the best and good luck.”

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The French government says French President Nicolas Sarkozy and German Chancellor Angela Merkel will speak by phone later Monday to discuss an upcoming EU summit amid signs they disagree on parts of a new crisis plan.

Government spokeswoman Valerie Pecresse says that at the weekly cabinet meeting Wednesday Sarkozy emphasized that the Oct. 23 summit in Brussels “is a crucial moment, for Europe and for France.”

That view appears to clash with Germany’s recent downplaying of the summit’s importance Business Card Holders.

Earlier this week, German finance chief Wolfgang Schaeuble dampened expectations by saying that Sunday’s summit wouldn’t produce a comprehensive solution to the eurozone debt crisis that threatens to cause another global recession.

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Apple Inc. said Monday it sold 4 million iPhone 4S units in the three days since it went on sale Oct. 14.

Sales in stores began on Friday in Japan, Australia, France, the U.K., Germany, Canada and the United States.

The company took more than 1 million online orders in the first 24 hours after the release of the iPhone 4S, exceeding the 600,000 for the iPhone 4, though it was sold in fewer countries.

Unveiled just a day before Apple Chairman Steve Jobs died, it was initially dubbed a disappointment, partly because it looked identical to its predecessor low interest rate personal loans. But anticipation of its “Siri” voice software helped it set an online record in orders on Oct. 7.

Along with the new iPhone, more than 25 million customers are using the iOS 5 mobile operating system, in the first five days of its release, and more than 20 million customers have signed up for its free cloud services, Apple said.

The latest iPhone will be available in 22 more countries on Oct. 28 and more than 70 countries by the end of the year.

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KV Pharmaceutical Co. has filed a lawsuit against its former board chairman and chief executive, Marc Hermelin, hoping to avoid paying him about $36.9 million in retirement benefits, plus legal expenses.

The lawsuit, filed Oct. 7 in circuit court in St. Louis County, accuses Hermelin of breaching his fiduciary obligations to the Bridgeton-based company through his alleged misconduct in shipping oversize painkillers to pharmacies.

The suit asks the court to grant a declaratory judgment that KV Pharmaceutical has no legal duty to pay tens of millions of dollars in retirement and termination fees to Hermelin, nor to reimburse him for his considerable legal expenses associated with his tenure at the drug company.

KV also seeks a court order that Hermelin repay the company all the executive compensation he received during the time of his “knowing and intentional breach of his fiduciary obligations to KV,” as well as repay the company for “other things of value by which he was enriched as a result of the wrongs he committed.”

Finally, it asks that Hermelin be ordered to pay the highest allowable financial interest on the amount of damages sustained by KV “as a result of his culpable conduct.”

Hermelin, who is living in Israel, could not be reached for comment. An attorney for KV Pharmaceutical declined to comment.

By 2008, KV was considered one of the most successful publicly traded companies based in the St. Louis area, posting nearly $600 million in revenue and employing 1,700 people. But in December of that year the pharmaceutical company’s board of directors removed Hermelin as chairman of the board and also ended his tenure as chief executive after the board’s internal investigation concluded that he had not acted in good faith.

According to the company’s lawsuit, Hermelin was terminated “for cause” because of misconduct involving “his willful failure to perform his duties in the best interests of KV.”

Hermelin’s employment agreement called for retirement and termination payments to Hermelin, but not if the board concluded that he had intentionally acted against KV’s economic interests and caused significant adverse effects for the company.

Food and Drug Administration regulators shut down the pharmaceutical business of KV and its wholly owned subsidiary, Ethex Corp., in 2009 after pharmacists discovered that the company was shipping oversized morphine pills. KV’s stock price tumbled, and the company laid off about three-quarters of its employees.

In early 2010, Ethex pleaded guilty to two felony counts of criminal fraud for failing to report to the FDA that it was distributing medicines of the wrong size and shape that could be harmful to patients payday loan lenders. Ethex, which was ordered to pay $27.6 million in fines and restitution, has been dissolved.

“Hermelin knew that many of his actions were improper, and that they risked severe sanctions against KV - sanctions so severe that they could end KV’s ability to do business,” the suit alleges. “He acted solely to protect his own interests and bonus, which was, by contract, calculated as a percent of KV profit, so taking appropriate action would be costly to him.”

KV’s lawsuit describes Hermelin’s alleged misconduct as including “failure to take appropriate actions with respect to the FDA, multiple attempts to impede the work of those investigating matters at KV’s facilities, and multiple efforts to conceal critical information with respect to KV’s production facilities and processes from internal audit and quality personnel and KV’s own board and its committees.”

KV’s suit also alleges that the company has been held captive by Hermelin. According to the lawsuit, Hermelin and his family controlled the majority of the voting power of KV stock, but only about one quarter of the economic interest. Public shareholders owned the remainder.

A consent decree between Ethex and the FDA in March 2009 barred KV Pharmaceutical from permitting Hermelin to have any role in the decision-making, management or operation of the company. Nonetheless, the suit alleges, Hermelin in June 2010 “caused the re-election of himself to the board.”

In November 2010, at the demand of federal regulators, Hermelin resigned from KV’s board. Shortly after, the Office of Inspector General of the federal Department of Health and Human Services banned Hermelin from participating in any business involving Medicare, Medicaid and all other federal health care programs for 20 years.

In March, Hermelin pleaded guilty in federal court in St. Louis to two criminal misdemeanor counts of mislabeling drugs. Hermelin was initially sentenced to 30 days in St. Louis County jail, but he was released by a federal judge after serving only about half that time. Under a plea agreement, Hermelin also agreed to pay a $1 million criminal penalty and to forfeit an additional $900,000 in ill-gotten gains.

Hermelin claims that he was not fired by KV, but instead resigned. Hermelin has demanded that he be paid retirement benefits and reimbursed for his legal expenses in connection with the criminal proceedings against him, governmental investigations, and other lawsuits. KV contends that it owes him nothing.

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