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DECEMBER 13, 2004
Edited by Eric Schine HEADLINER Jim Jenness: Feeling His Oats  After more than 25 years in advertising, James Jenness joined Kellogg's (K
) board in mid-2000. Now he's the surprise successor to Kellogg Chairman and CEO Carlos Gutierrez, who revived the slumbering cereal giant. But some wonder if outsider Jenness can keep Kellogg popping.When President George W. Bush nominated Gutierrez on Nov. 29 as his next Commerce Secretary, many assumed Kellogg's board would promote President and Chief Operating Officer David Mackay. While Mackay, 49, was named to the board, directors tapped Jenness, 58, concluding Mackay needed more grooming. A former vice-chairman and COO at Kellogg's ad agency, Leo Burnett, Jenness knows the company's brands. That should help: Gutierrez' turnaround of the Battle Creek (Mich.) outfit was based largely on pumped-up marketing. Jenness, a marathon runner, says he's in his new job "for the long haul." To prove his skeptics wrong, he'll need to be a fast starter, too. By Michael Arndt Torrents Of Arabia Surprised by the strength of global economic growth this year, Saudi Arabia, the world's leading oil exporter, and OPEC are boosting capacity. Earlier this year Saudi capacity may have been as low as 9.5 million barrels per day, according to a recent study by Edinburgh-based energy consultants Wood Mackenzie. Saudi Aramco is working to bring two large projects onstream that would produce up to 800,000 bbl per day by yearend. Capacity could reach 11 million bbl per day by the end of 2005. Wood Mackenzie estimates that OPEC will have added about 1.5 million bbl per day in capacity by yearend. That helped allay fears of a supply disruption, as oil futures fell to $46 per barrel on Dec. 1.   Pfizer The Fearless  Drug giant Pfizer (PFE
) is vowing it will succeed where others have failed. On Nov. 30, the drugmaker held its annual analyst briefing and warned that between 2005 and 2007, Pfizer drugs with sales of $14 billion could lose patent protection, exposing them to generic competition. But while such losses have severely hurt competitors such as Merck (MRK
) and Bristol-Myers Squibb (BMY
), Chairman and Chief Executive Henry McKinnell Jr. vowed Pfizer's R&D strength would allow it to prosper in the face of the generic hits. Not everyone on the Street is buying McKin-nell's upbeat assessment. Sanford Bernstein analyst Richard Evans expects Pfizer sales to be down slightly between '05 and '07 while earnings, he projects, will be up only marginally.Raytheon's GOP Dividend Buoyed by a record $30 billion backlog of defense contracts, on Dec. 1 Raytheon (RTN ) announced that it would boost its dividend 10% next year, and spend up to $700 million to buy back its shares over the next two years. Like other defense contractors, Raytheon figures it will benefit from the Republican sweep in the Nov. 2 election. Its shares are up 36% year to date, and the company now projects the defense budget will grow at a 5% compound annual clip through 2009. Sony: Burned In DVDs? Is it Betamax all over again for Sony (SNE )? The Japanese electronics giant, eager to capture the next generation of high-definition DVDs, has been beaten to the punch by a rival technology being pushed by Toshiba (TOSBF ) and computer maker NEC (NIPNY ). Hollywood studios Paramount (VIA ), Universal, and Warner Bros., whose content is considered crucial to promote the new technology, signed nonexclusive agreements to put out films next Christmas on Toshiba's HD-DVD format. Sony, whose Betamax lost out to the Toshiba-backed VHS format in the 1980s, has lined up its Sony film studio and MGM behind its Blu-ray DVDs, which have more interactive capacity but are more expensive to produce. By next year the market for the new high-definition DVDs could grow rapidly, as up to 20 million U.S. homes could have HDTV sets, according to Kagan World Media. Et Cetera... -- General Motors (GM ) said sales fell 16% in November, while Ford (F ) sales dropped 7%. -- ESPN announced a deal with Sprint (FON ) to launch its own brand of mobile phone service in 2005. -- H.J. Heinz may repatriate $1 billion in foreign profits at reduced tax rates. Closing Bell: Humana  Shares of Humana (HUM
) jumped nearly 8%, to $26.76, on Dec. 1 after the Louisville-based health insurer raised its profit outlook for 2004. Strength in its Medicare business is helping to propel growth. Humana also said it expects profits to grow a brisk 12% to 15% in 2005.
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