Markets in Europe were off at 6.35 AM New York time. The FTSE was down 1.7% to 5,977. Barclays (BCS) was down 2.4% to 445. BHP Billiton (BHP) was off 5% to 1831. The DAXX dropped .9% to 6,733. Bayer was up 2.6% to 53.36. SAP (SAP) was down 1.7% to 32.11. The CAC 40 was off 1.2% to 4,887. Alcatel-Lucent (ALU) was down 1.6% to 3.99. ST Micro (STM) was down 2.1% to 6.94. Data from Reuters Douglas A. McIntyre
Chancellor Alistair Darling says "it will take time" to finalise concessions promised to those hit by tax changes. Source: BBC News | Business | World Edition | 24 Apr 2008 | 10:38 am
MANNHEIM, Germany (Reuters) - Bayer's quarterly profit surged ahead of market expectations thanks to strong demand for its prescription drugs and farming products, sending its shares to a two-month high on Thursday.
Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) has come out with earnings early this morning at $0.44 EPS from operations excluding special items, or a net of $0.42 EPS. While these numbers are lower than last year, they are well above the First Call estimate of $0.25 EPS. The hotel and resort operator repurchased approximately 6.1 million shares for approximately $277 million in the first quarter, leaving some $316 million available for repurchases. The company said that overall lodging trends remain strong, but uncertainty makes predicting results ahead difficult. For next quarter it is targeting $0.50 to $0.54 EPS...
The Serious Fraud Office is given leave to appeal against a ruling that it unlawfully dropped a BAE arms probe. Source: BBC News | Business | World Edition | 24 Apr 2008 | 10:29 am
Based on estimates from the Chinese government, the most populated country in the world now has 221 million people online. That puts it even with the US. Of course, the market is growing faster in China, so it should pull wall ahead of America by the end of the year. The news is important for US internet companies. Google (GOOG), Yahoo! (YHOO) and MSN (MSFT) cannot count on their domestic market to produce a bigger pie each year. They are going to have to fight over what is on the American table. The promise of China is that it has...
The UK's biggest banks have lost a test case, allowing the OFT to look at the fairness of overdraft charges. Source: BBC News | Business | World Edition | 24 Apr 2008 | 10:25 am
Hopes of another rate cut by the Bank of England next month were dented today
as retail sales figures showed that the high street was bearing up under the
pressure of the challenging economic conditions. Source: Latest Business News from Times Online | 24 Apr 2008 | 10:24 am
SEOUL (Reuters) - Hyundai Motor Co , South Korea's top auto maker, missed forecasts with a 28 percent rise in first quarter profit as foreign exchange losses and higher raw material costs weighed, sending its shares down over 4 percent.
The 0.4pc drop in retail sales volumes in March is not at all bad considering it reverses only a fraction of the (upwardly-revised) rise over the previous 2 months of some 2.6pc. Source: Telegraph Business | 24 Apr 2008 | 10:20 am
The 0.4pc drop in retail sales volumes in March is not at all bad considering it reverses only a fraction of the (upwardly-revised) rise over the previous 2 months of some 2.6pc. Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 10:20 am
There were too many headlines to count when Wal-Mart (WMT) got into the business of selling high-fashion, higher-price clothes a couple of years ago. The number of headlines increased when the project failed. Wal-Mart has decided to head down that path again, and its failure at the new enterprise is already in the cards. According to The Wall Street Journal "Higher fashion apparel and bedding have higher profit margins than other merchandise -- about 31%, a full 10 percentage points higher than almost every other category." That may be true, and the new clothes may be very, very nice. They...
NextWave Wireless Inc. (NASDAQ: WAVE) may be unloading its held spectrum assets to focus on core technology offerings. Last night it announced that it has retained Deutsche Bank and UBS Investment Bank to explore the sale of "its extensive spectrum holdings in the United States." The company noted that its spectrum footprint covers over 251 million people (pops) in the U.S. and includes major markets such as New York, Los Angeles, Chicago, San Francisco, Boston, Philadelphia, Denver, Houston, and Detroit. It also includes licenses and lease rights for a total of 4.7 billion MHz/pops of spectrum comprised of the following:...
Reuters - Stock futures weakened early on Thursday
as investors prepared to plough into a fresh flurry of
corporate results for clues about how much a crisis in the
credit markets is hurting industrials.
LONDON (Reuters) - Stock futures weakened early on Thursday as investors prepared to plough into a fresh flurry of corporate results for clues about how much a crisis in the credit markets is hurting industrials.
After Motorola's (MOT) global handset market share dropped from 22% two years ago to 14% more recently, it could hold on to one prize. It was still the top selling handset company in the US. That may have changed. Samsung may have taken the lead. According to The Wall Street Journal "Motorola's U.S. cellphone sales are dropping so sharply -- and Samsung is catching up so quickly -- that the South Korean company may soon knock Motorola from the perch it has held in the U.S. since it invented the cellphone in 1983." Motorola's handset division lost over $1 billion...
Reuters - Profits at Barclays Plc, Britain's third
biggest bank, were well below those of a year earlier in the
first quarter after its investment bank and fund management
arms were hit by tough financial market conditions. Source: Yahoo! News: Business | 24 Apr 2008 | 10:02 am
LONDON (Reuters) - Profits at Barclays Plc, Britain's third biggest bank, were well below those of a year earlier in the first quarter after its investment bank and fund management arms were hit by tough financial market conditions.
LONDON (MarketWatch) -- French carmaker PSA Peugeot Citroen on Thursday posted a 2% increase in first-quarter sales as a surge in demand from South America and Russia helped offset a slowdown in its core European market.
Reuters - Credit Suisse notched up a further 5.3
billion Swiss francs ($5.26 billion) of credit-linked
writedowns but its core rich clients kept their money at the
bank unlike those of rival UBS.
ZURICH (Reuters) - Credit Suisse notched up a further 5.3 billion Swiss francs ($5.26 billion) of credit-linked writedowns but its core rich clients kept their money at the bank unlike those of rival UBS.
U.S. stock futures headed lower on Thursday before another wave of earnings reports, with worries about earnings growth for Amazon.com, Apple and Starbucks denting sentiment.
Chinese stocks soared in Shanghai Thursday after the government slashed a tax on share transactions, a move aimed at bolstering a stock market that ranks among the worst performers in Asia this year.
Shares in online retailer Amazon fall in after-hours trading on concern about the outlook for the rest of 2008. Source: BBC News | Business | World Edition | 24 Apr 2008 | 9:56 am
There were two things that happened in China, both of which should be loved by U.S. and most country investors. First and foremost, China saw a rally in Shanghai by more than 9% on the local markets after the Chinese lowered a stock trading tax from 0.3% down to 0.1%. MarketWatch noted that this was meant to take some air out of its market last year after major surges had been seen. After the Shanghai market had fallen by 50% from highs, they probably decided to keep confidence from eroding further and declare "mission accomplished." The second issue is that...
Most analysts thought that the good news out of Apple (AAPL) was that Mac sales were up 51% to 2,289,000. Nothing could be further from the truth. iPod sales sales have slowed considerably. They were up only 8% in the quarter. to 10,644,000. With almost 150 million sold since the product was introduced, it is surprising that the music player has held up that well. The product saved the company from obscurity but its best day are over. Apple also sold 1.7 million iPhones. that keeps it on track with expectations, but it is not likely to overtake Nokia anytime...
Shanghai stocks surged more than nine per cent today after a government cut in
stamp tax apparently aimed at ending a bear market during which share prices
halved in value in six months. Source: Latest Business News from Times Online | 24 Apr 2008 | 9:48 am
Credit Suisse swings to a larger-than-expected loss in the first quarter after taking another 5.3 billion Swiss francs ($5.2 billion) of write-downs on its exposure to leveraged loans and structured products.
Patrick and Laura Matheny began saving early for their children's college education. After stashing some $50,000 in college savings accounts for their son Daniel, now 20, and their daughter Natalie, 18, they began paying down their mortgage in earnest with the intention of tapping their home equity once the bills began rolling in.
Retail sales drop slightly in March but sales growth is revised up for January and February. Source: BBC News | Business | World Edition | 24 Apr 2008 | 9:34 am
Football stars and CEOs pride themselves on winning when the chips are down, when things look to be at their worst. Elias Sports Bureau and legions of demented math Ph.Ds keep statistics on how many games are won after the two minute warning in pressure-cookers that lesser men could not handle. Howard Schultz, founder of Starbucks (SBUX) made two tremendous mistakes and then could not correct them in time to get his company back on track. Several quarters ago, he let the CEO who he later fired say that Starbucks was on its way to having 40,000 stores, more than...
Shares across the housing sector slumped today after Persimmon revealed that
it would stop building homes on new sites until mortgage conditions improved
while speculation grew that Barratt may be forced to raise capital through a
rights issue. Source: Latest Business News from Times Online | 24 Apr 2008 | 9:31 am
European Central Bank officials, notably Yves Mersch, have been falling over themselves trying to be more hawkish than the last. MarketWatch First Take commentary.
Britain's biggest banks today lost a landmark test case at the High Court over
unauthorised overdraft charges. Source: Latest Business News from Times Online | 24 Apr 2008 | 9:26 am
Profits at Barclays fell in the first quarter of the year amid tough market conditions, boss John Varley says. Source: BBC News | Business | World Edition | 24 Apr 2008 | 9:23 am
Disruption in the financial markets has hit Barclays Capital and Barclays
Global Investors, which has reported profits for the first three months of
this year significantly down on the same period last year. Source: Latest Business News from Times Online | 24 Apr 2008 | 9:21 am
Shares in companies closely connected to the British housing market fall again after a downbeat statement from top-ranked homebuilder Persimmon highlighted pressure from tighter credit conditions.
Oil prices retreated on Thursday while gold slipped below the $900 level and base metals put on a mixed performance, with a recovery in the dollar weighing on sentiment in commodity markets. June West... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 9:11 am
BANGKOK (Reuters) - Rice prices in Thailand, the world's top exporter, surged to $1,000 a tonne on Thursday, feeding concerns about food security as far as the United States after export curbs by governments worldwide.
The euro slid against the U.S. dollar on Thursday after surveys said business confidence in France and Germany was dropping amid fears of slower growth. In midmorning European trading, Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 9:05 am
Sizeable mark-to-market write-downs of asset backed securities, and a slump in sales of private equity investments cut first quarter pre-tax profits at Schroders from 93.2m to 42.2m, the fund management... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 9:02 am
Irate Washington Mutual shareholders are stepping up their pressure on the bank to conduct a recount of last week's board of director elections. Letters are pouring in to WaMu Chairman Kerry Killinger... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 8:57 am
Amazon.com Inc., the world's largest Internet retailer, said first-quarter profit rose on higher sales of electronics and video games. Amazon.com said full-year operating income may be as much as $940... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 8:57 am
Several e-mails that were sent between a number of Wall Street banks could be a serious setback in their defense against the private-equity firms that are trying to force them to finance the contentious... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 8:57 am
THE vast majority of experts still think the Federal Reserve will reduce interest rates next Wednesday, but this time the betting is for a modest quarter-point cut. However, there is a growing sentiment... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 8:57 am
JPMorgan Chase & Co. named four Bear Stearns Cos. executives to its integrated equities team as it moves forward with the takeover of the securities firm. They are: Bruce Lisman, Steven Meyer, Louis... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 8:57 am
Worldwide fears of food shortages have created a ripple effect in the US, as Wal-Mart said its Sam's Clubs are putting curbs on shoppers' purchases of rice. Citing "recent supply and demand trends," the... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 8:57 am
Undaunted by Yahoo!'s solid earnings report, Microsoft CEO Steve Ballmer continued his overseas blustering tour yesterday by telling an Italian audience that his company is perfectly content to walk away... Source: Infocious RSS raw feed - channel BNPaperBusiness | 24 Apr 2008 | 8:57 am
Dusk is the best time of day in Hong Kong, as the gray, polluted skies and thick humidity that rule the office hours of this workaholic city give way to a skyline wave of neon lights, pulsing to life seemingly with the flip of a switch. Like everything else in China these days, the change is sudden, and filled with expectation. But when it comes to the country's nascent stock market, investors need to be wary about being blinded by the lights of excitement and possibility.
BANGKOK (Reuters) - Rice prices in Thailand, the world's top exporter, surged to $1,000 a tonne on Thursday, feeding concerns about food security as far as the United States after export... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 8:53 am
Persimmon, Britain's largest housebuilder, was the biggest faller in the FTSE 100 this morning, after announcing that the crisis in the mortgage market has hit sales, forced the group to slash prices and postpone new building. Source: Telegraph Business | 24 Apr 2008 | 8:50 am
Credit Suisse becomes the latest bank to report big losses because of its exposure to the credit markets. Source: BBC News | Business | World Edition | 24 Apr 2008 | 8:49 am
Credit Suisse, the Swiss investment bank, reported its first quarterly loss
for nearly five years today, after asset writedowns reached $5.2 billion
($£2.6 billion). Source: Latest Business News from Times Online | 24 Apr 2008 | 8:41 am
Japanese stocks slipped on Thursday as cautious investors took a wait- and-see stance ahead of the release of corporate earning results. The Nikkei 225 index declined 38.29 points, or... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 8:38 am
China's main Shanghai share index rises by 9% after the government cuts taxes on share trading. Source: BBC News | Business | World Edition | 24 Apr 2008 | 8:36 am
China's most-watched stock index surged 9.3 percent Thursday _ its biggest percentage gain ever _ after the government cut a tax on stock transactions in a move widely seen as an effort... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 8:32 am
Credit Suisse Group on Thursday posted a $2.1 billion net loss for the first quarter as the global effects of the U.S. subprime mortgage crisis continued to spread. Switzerland's... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 8:28 am
Chinese share prices surged Thursday to close up 9.29 percent, the biggest one-day rise in more than six years, after the government slashed stamp duty on stock market transactions, dealers Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 7:54 am
Barclays has become the latest bank to reveal that the financial markets were particularly tough in March even though Britain's third-biggest bank was profitable during the month. Source: Telegraph Business | 24 Apr 2008 | 7:45 am
Acording to Reuters profits at Apple (AAPL) rose but Wall St. did not like margins. Reuters reports that Starbucks (SBUX) cut its outlook due to the housing crisis. Reuters writes that Amazon's (AMZN) pricing drove lower margins. Reuters reports that Credit Suiss (CS) posted a loss. The Wall Street Journal writes the Microsoft (MSFT) may withdraw its bid for Yahoo! (YHOO). The Wall Street Journal writes that Wendy's (WEN) will announce a deal in which it is sold to Nelson Peltz. The Wall Street Journal writes that Samsung may knock Motorola (MOT) from its No.1 spot in US handset sales....
AFP - Credit Suisse bank plunged into its first quarterly loss for five years on Thursday, reporting heavy extra writedowns because of the subprime home-loan crisis in the United States.
Reuters - Wendy's International Inc is
set to announce a transaction with billionaire investor Nelson
Peltz on Thursday, though the deal's specific details were
unclear, the Wall Street Journal reported, citing a person
familiar with the situation. Source: Yahoo! News: Business | 24 Apr 2008 | 7:23 am
NEW YORK (Reuters) - Wendy's International Inc is set to announce a transaction with billionaire investor Nelson Peltz on Thursday, though the deal's specific details were unclear, the Wall Street Journal reported, citing a person familiar with the situation.
NEW YORK (Reuters) - Wendy's International Inc is set to announce a transaction with billionaire investor Nelson Peltz on Thursday, though the deal's specific details were unclear, the... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 7:23 am
MANNHEIM, Germany (Reuters) - Germany's BASF , the world's biggest chemicals company by sales, remains upbeat despite signs of a slowing global economy after posting strong first-quarter... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 7:20 am
Britain's largest homebuilder Persimmon has warned that sales have dropped 24 per cent so far this year and new developments are being postponed because of sliding demand Source: Telegraph Business | 24 Apr 2008 | 7:15 am
Swiss bank plunges to first-quarter loss of SFr2.15bn as higher than expected write-downs on leveraged finance and structured products outweigh strong performance in private banking Source: FT.com - US homepage | 24 Apr 2008 | 7:07 am
LONDON (Reuters) - Britain's third biggest bank Barclays Plc said its profits in the first quarter fell from a year earlier after its investment bank and fund management arms were hit by... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 7:06 am
A street-level look at how Southern Californians are stretching their dollars in a sputtering economy.
Economic woes are percolating down to Americans' morning brews. ¶ Java junkies looking to pinch pennies are sipping less expensive coffee drinks, brewing at home or going cold turkey altogether. The shift is hurting both small-time coffee shops and giants of joe such as Starbucks, which said Wednesday that it expected lower second-quarter profit and full-year earnings than it originally projected because in-store sales and traffic had declined. It blamed the economy, not its prices, for the slowdown. ¶ "These days, I'm not about to buy a $5 coffee," said Carlos Medina, a house painter from Covina who has persuaded his girlfriend to get her daily fix at McDonald's, which introduced a premium drip coffee in 2006, rather than Starbucks.
The Web-search leaders say the Justice Department is looking into their experiment with ad collaboration.
Yahoo Inc.'s short experiment with outsourcing some of its Web-search ads to Google Inc. has drawn scrutiny from antitrust regulators, the companies said Wednesday.
Indexes end a choppy day up, with Nasdaq a standout, amid good news from Boeing and the chip sector.
Wall Street ended a choppy session with a moderate advance Wednesday after a better-than-expected profit report from Boeing and a seesaw day in the energy markets.
The former Business editor will assume new duties overseeing the newsroom. Times Editor Russ Stanton also gives John Arthur the new title of executive editor.
Los Angeles Times Editor Russ Stanton reconfigured the paper's masthead Wednesday, elevating Business Editor Davan Maharaj to managing editor and naming Managing Editor John Arthur to the new position of executive editor.
A House panel's plan may founder amid voter anger, mortgage industry opposition and even election-year politics.
Nine months into the worst housing crisis in a generation, Congress this week took up the most aggressive government plan so far to break spiraling home foreclosures and tumbling house prices that threaten to pull the economy down.
Groups allege that the government's failure to uphold its own laws protecting workers has led to intimidation and even killings of trade unionists.
Guatemalan and U.S. labor groups filed a complaint Wednesday with the U.S. Department of Labor alleging that Guatemala had failed to uphold its own labor laws as required under the Central American Free Trade Agreement.
'Too many big heavy trucks' take a heavy toll on even the newest thoroughfares.
China has been throwing down pavement and asphalt at a breakneck speed, and few cities are as proud of all the new roads as Chongqing, China's largest metropolis with 32 million people.
ZURICH (Reuters) - Credit Suisse notched up 5.3 billion Swiss franc ($5.26 billion) of credit-related writedowns in the first quarter, causing a bigger-than-expected loss, but its core... Source: Infocious RSS raw feed - channel BNewsBusiness | 24 Apr 2008 | 6:57 am
Coffee chain giant Starbucks lowers its forecasts for the year, blaming the economic slowdown in the US. Source: BBC News | Business | World Edition | 24 Apr 2008 | 6:20 am
TOKYO (Reuters) - The Federal Reserve is likely to cut interest rates by a quarter percentage point at a policy meeting next week but may then be ready to take a break, the Wall Street Journal's online edition reported on Thursday.
MOSCOW (Reuters) - Russia's gas export monopoly Gazprom will buy majority control of oil major TNK-BP , which is half owned by BP , for $20 billion by the end of the year, the Vedomosti daily reported on Thursday.
China's $200bn sovereign wealth fund has as much as $90bn to spend on assets abroad, a rise of more than 30 per cent on its original allocation, the fund's president said Source: FT.com - US homepage | 24 Apr 2008 | 5:02 am
One could read the forecast for Microsoft's earnings report, due this afternoon, like a weather forecast: lots of bluster and gusty winds, with a strong chance of rain—falling, that is, on Yahoo's parade.
Yahoo had its say Tuesday, and as encouraging as its numbers are, they won't silence Microsoft. The software giant could improve the chances of succeeding with its $44.5 billion hostile bid for Yahoo by showing strength across its business units overseen by solid management.
And that's probably what Microsoft is going to deliver—except in one area: online advertising, arguably the key to its future if, as some predict, software eventually becomes a free commodity. That's why Microsoft wants Yahoo so badly.
Microsoft's online-services group—which includes MSN and Live Search ads—grew 7 percent in its last fiscal year, below the 10 percent revenue growth overall.
For now, however, Microsoft can still manage to do well overall while lagging online: Online advertising accounts for only about 5 percent of the company's revenue.
The other 95 percent—the Vista operating system, the Office suite of applications, and a growing business in enterprise software—is doing quite well. Microsoft is still much more dependent on personal computer sales than on online ads, and PC sales were surprisingly strong in the first quarter.
Last week, two tech research firms, Gartner and IDC, said PC sales around the world were robust. Gartner said that they grew 12 percent, to 71 million units, while IDC said that they grew 15 percent, to 70 million. Both indicate that Microsoft, whose software is packed inside most of those computers, made out pretty well.
Like Google, Microsoft is positioned to weather a domestic recession. William Blair analyst Laura Lederman points out that about 60 percent of Microsoft's revenues come from abroad—more than the 51 percent buoying Google.
What's more, Microsoft's stock has consistently outperformed the market during previous downturns.
It is putting that record at risk with its $44.5 billion Yahoo offer, which has hobbled Microsoft shares since it was announced nearly three months ago.
Brad Reback of Oppenheimer said Microsoft executives told him recently that they're pressing ahead on Yahoo because they see a bigger opportunity in online ads than others do.
"The company arrives at this projection by looking at the total global ad market, which is about $650 billion today, heading to $1 trillion," Reback wrote in a report to his clients. "Microsoft believes that online advertising will follow the same path to maturity as radio and television did, [garnering] 40 percent of total advertising spending, implying a multi-hundred-billion-dollar opportunity."
Microsoft's online-services group will make $3 billion this year. If its math is right, then snagging Yahoo would give it roughly one-third of a market worth hundreds of billions of dollars. In contrast, a $44.5 billion price tag on Yahoo would look cheap.
For a company that has achieved so much, Apple sure is a gloomy Gus when it comes to its forecasts.
The maker of iPhones and Macs had stellar revenues this quarter: Rising 43 percent to $7.5 billion, well above Wall Street's forecast of $6.96 billion. Its earnings per share of $1.16 handily beat the Street's number of $1.07.
This was in a quarter when the mania for iPods had calmed and many consumers were waiting for a new version of the iPhone. Yet iPod revenue rose 8 percent on year to $1.8 billion, and the $378,000 in iPhone revenue was better even than the fourth quarter of last year, which included holiday sales.
But what really shone in Apple's report were its Mac computers. Revenue from desktops grew 48 percent to $1.4 billion, and those from Macbook laptops surged 58 percent to $2.1 billion in a quarter when consumers were expected to cut back on spending.
So the current quarter should be just as good, right? Well actually, to hear Apple put it, not really. Revenue will grow only 33 percent and net profit will be $1 a share, smaller than what the company earned last quarter.
This dismal song-and-dance is typical for Apple. It gives conservative estimates, setting the bar low enough to trot over it without working up a sweat.
But it can cause confusion and uncertainty as the market second guesses the company. In aftermarket trading, Apple's stock rose 4 percent above the official closing price of $162.89 as investors saw the strong first-quarter results. Then it fell to 4 percent below the closing price as they took in the cautious second-quarter guidance.
Analysts tried to wring more data from Apple C.F.O. Peter Oppenheimer on the conference call with little result beyond some prickly responses. When one asked a question common on earnings calls these days—any thoughts on the overall economy?—Apple executives sniffed that they're not in the business of economic commentary.
So investors are left with scant clues to crack the koan of Apple's guidance. In good times, they simply assume Apple is aiming very low. But in lean times like 2008, some wonder if conservative guidance has become more middle of the road, if not liberal.
Such uncertainty helped drive Apple's stock down from $200 in early January to $115 in February. It also led analysts Wednesday to zero in on Apple's gross margins, which came in at 32.9 percent.
That figure was in fact 90 basis points—nine-tenths of a percentage point—better than Apple had guided. But Apple usually beats its guidance by a much wider margin: A year ago, Apple's gross margin was 360 basis points better than it had forecast.
Apple has aimed so low that analysts actually worry when it comes close to its projections.
"Apple had really strong revenues, but it didn't quite translate into margins like it historically has," said Shaw Wu, an analyst at American Technology Research. "It looks like this time the guidance on their margins maybe wasn't so conservative."
Oppenheimer said that while falling costs for hard drives, memory chips and displays were helping margins, other factors weighed them down: reduced prices for the iPod shuffle, lower overseas pricing, currency rates, and more sales through iTunes—a relatively low-margin business.
Apple consumers might find such concern to be splitting hairs. They still love their Macs. They love the iPhones so much that they are depleting the inventory at Apple's stores to ship them to countries where the iPhone hasn't launched yet. That's not a bad problem for Apple to have.
Cabletalk Ltd has sold its Astute business to Australian company Downer EDI for $5 million, and is looking to sell another subsidiary.
The listed telecommunications company hit problems after its main customer TelstraClear awarded... Source: New Zealand Herald - Business | 24 Apr 2008 | 2:30 am
Barfoot & Thompson staged a "clearance" auction of 51 North Shore properties in Auckland last night, but was only able to sell 3 properties as buyers were scarce and bids even scarcer, attendees at the auction said.
Real estate... Source: New Zealand Herald - Business | 24 Apr 2008 | 2:00 am
Reserve Bank Governor Alan Bollard has left the official cash rate (OCR) unchanged at 8.25 per cent, as widely predicted, while acknowledging the economy has slowed faster than he expected.
While today's announcement leaves the... Source: New Zealand Herald - Business | 24 Apr 2008 | 1:15 am
Bolivia, Nicaragua, Cuba and Venezuela agree on a $100m scheme to alleviate the effects of rising food prices. Source: BBC News | Business | World Edition | 24 Apr 2008 | 1:11 am
Google and Yahoo have responded to inquiries by the US Department of Justice's antitrust division about an alliance they launched earlier this month Source: FT.com - US homepage | 24 Apr 2008 | 12:08 am
E.ON, the German owner of British energy supplier Powergen, has signalled its intention to bid for a slice of the UK's nuclear industry with a surprise announcement that it has chosen two companies that would help it design and build reactors. Source: Telegraph Business | 24 Apr 2008 | 12:01 am
The UK's biggest drug company, GlaxoSmithKline, saw profit before tax fall 12.5pc to £1.9bn for the first quarter of the year as it continued to struggle against reduced sales of its diabetes drug Avandia. Source: Telegraph Business | 24 Apr 2008 | 12:01 am
Czech coal miner New World Resources is looking to raise up to £1.1bn in its initial public offering, with the proceeds put towards expanding its growth in the Czech Republic and neighbouring Poland. Source: Telegraph Business | 24 Apr 2008 | 12:01 am
Ebay is suing the directors of Craigslist for allegedly unfairly diluting stake in the classified listings website. Source: Telegraph Business | 24 Apr 2008 | 12:01 am
The roaring oil boom of the last few months may be on its last legs as economic growth slows hard across the world and a clutch new refineries come into operation, Lehman Brothers has warned in a hard-hitting report. Source: Telegraph Business | 24 Apr 2008 | 12:01 am
Reuters - Apple Inc on Wednesday
posted a 36 percent rise in quarterly profit, helped by strong
sales of Macintosh computers and iPods, but its lower profit
margin and cautious outlook disappointed investors.
SAN FRANCISCO (Reuters) - Apple Inc on Wednesday posted a 36 percent rise in quarterly profit, helped by strong sales of Macintosh computers and iPods, but its lower profit margin and cautious outlook disappointed investors.
Starbucks, the coffee house chain, blamed a "sharp weakening" in the consumer economy for an unexpected decline in its US sales, sending its shares plunging more than 10 per cent in after-hours trading Source: FT.com - US homepage | 23 Apr 2008 | 11:47 pm
Investor fears over failures by big banks have receded sharply in recent weeks, pricing trends in the credit derivatives markets have revealed Source: FT.com - US homepage | 23 Apr 2008 | 11:31 pm
AFP - Top retailer Wal-Mart's Sam's Club unit said Wednesday it is limiting the amount of rice individual shoppers could buy at one time, as rice prices hit new records around the world.
TOULOUSE, France - Oil prices well above US$100 ($127) a barrel will drive most of Europe's low-cost airlines out of business, the head of EasyJet's French subsidiary said today.
The stark warning of a cull of low-cost airlines... Source: New Zealand Herald - Business | 23 Apr 2008 | 11:30 pm
Apple shrugs off recession concerns as surging Macintosh computer sales help the PC and mobile handset maker turn in better-than-expected sales and profits for the second quarter Source: FT.com - US homepage | 23 Apr 2008 | 11:19 pm
UBS ended its days as an investment banking powerhouse yesterday when the
chief executive told an angry annual meeting that he would reassess the
group’s wholesale business. Source: Latest Business News from Times Online | 23 Apr 2008 | 11:00 pm
It was only a year ago that the Government was basking in the glory of the
City of London, which was challenging New York’s status as the world’s
financial centre. Source: Latest Business News from Times Online | 23 Apr 2008 | 11:00 pm
Nobody likes ticket touts, except, of course, when it comes to buying or
selling tickets at the last minute. It is hard, after all, to look back on
those in-the-dark, cash-for-ticket encounters with any great fondness,
although there is a certain thrill in getting into a hot gig at the last
minute, which suggests that touting is not all that bad. Source: Latest Business News from Times Online | 23 Apr 2008 | 11:00 pm
Stock market operator New Zealand Exchange (NZX) is reporting a 25 per cent increase in first quarter net profit to $2.17 million.
The result compares with $1.74m in the first quarter of 2007, and was made on operating revenue... Source: New Zealand Herald - Business | 23 Apr 2008 | 11:00 pm
Deutsche Bank is preparing another multibillion-dollar sale of leveraged loans on its books, adding to the evidence of a rally in corporate credit markets Source: FT.com - US homepage | 23 Apr 2008 | 10:51 pm
The New Zealand sharemarket was flat in early trading today, despite gains on Wall Street overnight.
The opening of the market in this country also came after the Reserve Bank left official New Zealand interest rates at 8.25 per... Source: New Zealand Herald - Business | 23 Apr 2008 | 10:45 pm
Investor's Business Daily - The mortgage applications index sank 14.2% in the week ended April 18 to 637.2, the lowest this year, the Mortgage Bankers Assoc. said. The 30-year fixed-rate mortgage shot up 30 ticks to 6.04% as Treasury yields jumped. Refinancing applications dived 20.2% to 2286.3, also an '08 low. Demand for loans to buy a home fell 6.4% to 537.2, just above a recent 5-year low. Source: Yahoo! News: Business | 23 Apr 2008 | 10:39 pm
Kiwibank acted within the hour of a Reserve Bank rate statement today to slash a key lending rate.
The state-owned bank said it was cutting its two-year lending rate to 9.29 per cent from 9.60 per cent with the proviso that borrowers... Source: New Zealand Herald - Business | 23 Apr 2008 | 10:20 pm
It doesn't seem possible—that a pill being tested on humans in Food and Drug Administration–approved trials might keep people young longer and increase life span.
Even more astonishing is that pharmaceutical giant GlaxoSmithKline has agreed to buy the company developing the "fountain of youth" pill, Boston-based Sirtris Pharmaceuticals, for $720 million in cash.
Also on Portfolio.com:
So You Want to Live Forever? Sirtris Pharmaceuticals is testing a "fountain of youth" pill on humans. You won't live forever, but it may slow aging and increase life span. So far, it's working.
Normally, a four-year-old biotech that went public less than a year ago and has a product pipeline still in early- to mid-stage human trials, would not sell for such a heady sum. But the science at work is so compelling that Sirtris C.E.O. Christoph Westphal says he talked to several potential buyers before settling on Glaxo.
The offer was 84 percent over the stock price before the sale was announced; Sirtris stock promptly soared upward, from $12.23 to a closing price today of $22.25—an 82 percent increase.
"We made the sale because we think GSK can speed up our efforts to get our drugs approved," Westphal said in a telephone interview with Portfolio.com. "We are a small company, and we need deep pockets to get through the expensive and difficult process of late-stage human trials and marketing."
Sirtris was founded to develop drugs based on a new category of enzymes called sirtuins that seem to regulate a number of functions in cells that slow aging. One naturally occurring version is resveratrol, a molecule found in red wine.
Sirtris' lead compound mimics and greatly amplifies the activity of resveratrol and is being tested as a treatment for type 2 diabetes, a disease that is often associated with aging.
The drug has performed well in mice in treating diabetes and other age-related diseases. In humans, early tests have proven it to be safe, and it has reduced glucose levels in a small group of diabetics.
Moncef Slaoui, the chairman of Glaxo's research and development division, said Sirtris' work on metabolism and aging is a "potentially transformative science" that could address a number of diseases, including diabetes, muscle wasting, and some degenerative nerve disorders.
The nationwide average price for a gallon of gas is now $3.53, and there's not much doubt it's going to hit $4 soon enough. But the Energy Department says gasoline demand is actually lower than a year ago. So what's going on? Ashley Milne-Tyte reports. Source: Marketplace | 23 Apr 2008 | 9:26 pm
To reduce its dependence on foreign workers, Saudi Arabia's government is hiring more women and encouraging the private sector to do the same. But change isn't coming easily. Kelly McEvers reports from Riyadh. Source: Marketplace | 23 Apr 2008 | 9:26 pm
When the economy and the stock market were humming right along, a lot of people thought it might be a good idea to invest Social Security funds in the market. But commentator Robert Reich says we're lucky we didn't. Source: Marketplace | 23 Apr 2008 | 9:26 pm
A new marketing study has found Mac owners tend to think they're more extraordinary than the average Joe. They're also more likely than PC users to whiten their teeth, drive hybrids, drink Starbucks coffee and eat organic food. Andrea Gardner reports. Source: Marketplace | 23 Apr 2008 | 9:26 pm
The price of rice is up 146% over a year ago. It's become expensive for Americans and dangerously scarce for the world's poorest consumers. Public policy professor Per Pinstrup-Andersen talks with Kai Ryssdal about the scarcity of the world's main grain. Source: Marketplace | 23 Apr 2008 | 9:26 pm
The U.S. Senate is expected to take up a bill that would outlaw "genetic discrimination" -- cutting someone's insurance or job based on test results that show a predisposition for a disease. Stacey Vanek-Smith reports. Source: Marketplace | 23 Apr 2008 | 9:26 pm
Delta and Northwest airlines lost $10.5 billion in the first quarter, with jet fuel costs a big chunk of that. The two companies are hoping to merge, but first they have to persuade antitrust officials. John Dimsdale reports. Source: Marketplace | 23 Apr 2008 | 9:26 pm
Sam's Club, Wal-Mart's warehouse retailer, has joined Costco in limiting sales of some rice to four bags per customer. Sarah Gardner reports on rising food prices and consumer habits. Source: Marketplace | 23 Apr 2008 | 9:25 pm
Have you noticed more of a crowd around the free coffee in your office kitchen lately?
Starbucks announced that it will miss Wall Street's expectations for its second fiscal quarter and it lowered its outlook for the year, citing "the sharp weakening in the U.S. consumer environment."
Starbucks expects to report revenue growth of 12 percent and earnings per share of 15 cents when it releases its quarterly figures on April 30. Analysts had expected it to earn 21 cents per share for the quarter, up from 19 cents per share during the same period last year. Starbucks said restructuring efforts cost three cents per share in the quarter.
It also expects that its full-year 2008 earnings will be "somewhat lower than the $0.87 reported in fiscal 2007." Analysts expected it to earn 97 cents per share.
"The current economic environment is the weakest in our company’s history, marked by lower home values and rising costs for energy, food, and other products that are directly impacting our customers," Starbucks' chief executive, Howard Schultz, said in a statement.
Same-store sales for the quarter, which compare revenues year-over-year for individual stores, are expected to decline by a rate in the mid–single digits.
Despite the setback, Schultz says he's still enthusiastic about Starbucks' new customer experience and product initiatives, such as its Pike Place Roast, which launched early in the current quarter.
Investors did not take the news well. In after-hours trading, Starbucks shares tumbled more than 10 percent.
The significance of governor Alan Bollard's statement this morning is that he has dropped the word "significant".
Six weeks ago he told us the official cash rate would have to remain at the current level of 8.25 per cent for "... Source: New Zealand Herald - Business | 23 Apr 2008 | 8:45 pm
Apple reported strong earnings growth for its second fiscal quarter, hauling in profit of $1.05 billion—a 36 percent increase—on $7.51 billion in revenue, thanks to robust Mac and iPod sales.
Despite strong second-quarter numbers, Apple shares were down as much as 6 percent in after-hours trading because the company's third-quarter earnings forecast of $1 per share missed analysts' estimate of $1.10.
The strong second-quarter numbers were powered by booming sales of Mac computers, with some 2.29 million units sold, easily beating Wall Street's consensus estimate of 2 million. Mac unit sales jumped 51 percent over the same period one year ago.
IPod sales were also strong, Apple said, with 10.6 million units sold, beating analyst estimates of 10 million. IPhone sales were right around the Street's prediction of 1.7 million.
"We're delighted to report 43 percent revenue growth and the strongest March quarter revenue and earnings in Apple's history," said Steve Jobs, the company's chief executive. "With over $17 billion in revenue for the first half of our fiscal year, we have strong momentum to launch some terrific new products in the coming quarters."
Amazon.com said its revenue grew 37 percent in the first quarter, compared with the same period a year ago, while earnings rose only 30 percent, reviving talk about C.E.O. Jeff Bezos' free-spending management.
Overall, the quarter was strong for the online retailer. Net sales rose 37 percent in the first three months, to $4.13 billion, the company said, and operating income climbed 36 percent to $198 million.
Even after stripping out the boost from the rising value of sales abroad when translated back into dollars, net sales grew 31 percent and operating income climbed 27 percent.
Net income increased 30 percent in the first quarter, to $143 million. That works out to 34 cents per diluted share, compared with 26 cents in the first quarter of 2007. Analysts surveyed by Thomson Financial had an average forecast of 32 cents a share this year.
Sales outside the U.S. increased by 44 percent from the same quarter last year and now comprise almost half of Amazon's total sales. The company has operations in Britain, Germany, Japan, France, and China.
Standard & Poor's has affirmed its AA-/A-1+ credit ratings of Transpower, and has revised the rating outlook for the electricity grid operator from negative to stable.
The rating agency said the outlook revision reflected Transpower's... Source: New Zealand Herald - Business | 23 Apr 2008 | 7:45 pm
Air New Zealand has been forced to cut its profit expectations by as much as 25 per cent because of the soaring cost of fuel.
With the price of oil poised to go through US$120 a barrel yesterday, Air New Zealand advised the market... Source: New Zealand Herald - Business | 23 Apr 2008 | 7:40 pm
Dilbert creator Scott Adams wants you to try to out-funny him. No, seriously.
New features added recently to the online home of the comic allow fans to rewrite the final frame of each daily strip about the harried engineer. In short, you can provide the punch line.
"With volume, it's a virtual guarantee that the best reader punch lines will be better than my original," said Adams in an e-mail exchange Tuesday. "That's going to hurt. I hope it doesn't happen with every strip."
Adams said the new additions to the site are already "a big hit," and the best ones haven't even rolled out yet: Starting in May, fans will be able to rejigger the entire strip with their own dysfunctional office humor. Users will also be able to experiment, exquisite corpse-style, by authoring a single frame and then opening their comic for anyone to pick up the digital pen.
"Readers were already modifying Dilbert comics and e-mailing them to friends," said Adams. "We're embracing the reality of the internet and trying to make it easier."
Animated Dilbert comics are coming soon to a computer screen near you, too: Adams and the syndication service that carries the strip have plans to begin making cartoons available on YouTube.
It's a deal that has not garnered a lot of attention, but taking a large public company private for $6.2 billion in cash at a time when venerable financial institutions and buyout firms are scrambling for smaller sums is an impressive feat.
Liberty Mutual Group, an insurer owned by its policyholders, is offering to buy Safeco for $68.25 per share in cash, a 51 percent premium over Safeco's closing stock price on Tuesday.
Earlier in the decade, the talk in the industry was how big mutual insurers needed to "demutualize" and become public companies that would give them a stock to use as a currency in making acquisitions. Giants like MetLife and John Hancock took the path of demutualization.
Helped by a change in Massachusetts law, Boston-based Liberty Mutual in 2002 became something of a hybrid—a mutual holding company, still owned by its policyholders but with the flexibility to sell a minority stake.
Liberty Mutual has not chosen to hold a public offering, but has gone on an acquisition spree nonetheless in recent years, using cash instead of shares. Last year, it bought Ohio Casualty for $2.7 billion.
"You either grow or you die," Ted Kelly, Liberty Mutual's chief executive, said in a conference call in February, explaining the benefits of the Ohio Casualty acquisition. "And we felt that the best way to grow and protect the capital…and strength of the company was through acquisition."
With the $6.2 billion acquisition of Safeco, Liberty Mutual would move up a notch to become the fifth-largest property and casualty insurer in the United States, instead of the sixth. Safeco will be part of Liberty Mutual Group's Agency Markets business unit, which had $5.6 billion in revenue last year.
More mergers in insurance may be coming this year, says a survey of property and casualty analysts released earlier this month by Accenture.
"The logic of consolidation within the property and casualty industry, particularly in North America, may be gaining favor as the economy slows and as rates soften," said John Del Santo, managing director of Accenture's Insurance practice in North America.
But the ratings agencies are not so sure about Liberty Mutual's use of capital to make deals. Standard & Poor's put its ratings for Liberty Mutual on CreditWatch with negative implications. Fitch also puts its ratings on review.
Liberty Mutual, Fitch notes, "has announced that it intends to fund the transaction with available cash, initial bridge financing prior to liquidating invested assets, and up to $1.5 billion of additional debt. Fitch notes that it considers current credit-market conditions to be challenging."
Despite those questions, Liberty Mutual won't have to worry about pesky shareholders trying to stop the proposed acquisition.
As long as its policyholders are happy about their insurance and how their claims are handled, the dealmaking can go on.
Gracenote, the CD identification database that has since branched out into car applications, video identification, audio fingerprinting and lyrics has found a new owner in Sony, which announced intent to purchase the company for $260 million in May.
Gracenote supplies media identification services for a large cross-section of the music industry. Everything from software like iTunes and Winamp to hardware from Sony and competitors like Panasonic and Samsung uses it to identify CDs upon insertion. Apparently, Sony will operate its new Gracenote unit as a separate division, but it will be hard-pressed not to use Gracenote competitively, potentially ratcheting up rates for the service to give itself an advantage in the market place.
As PaidContent points out, this marks the disappearance of the last independent metadata company, since AMG was bought by Macrovision and Muze is owned by Enterprise Partners Venture Capital. (Macrovision told me that it intends to use AMG to license metadata alongside its content protection technologies.) Other than its plan to run Gracenote as a separate division, Gracenote says it will continue adding new elements to the service. Related Links How To Toast Maybe Blu-ray vs. HD DVD Is The Wrong War Sony on Top
Two companies are considering opening new bond insurance firms – a large US bank and a large private equity firm – according to New York's insurance industry regulator Source: FT.com - US homepage | 23 Apr 2008 | 5:45 pm
The U.S. airline industry may be troubled, but the business of building American planes is still going strong.
Boeing said first-quarter earnings rose 38 percent, more than forecasts, as revenue from commercial airlines rose 8 percent.
The earnings exceeded analysts' estimates, although the revenue fell short. The company, which has been plagued by delays on its new big jet, the 787 Dreamliner, attributed the earnings strength in the quarter to "solid overall execution in both its commercial-airplane and defense businesses as well as lower unallocated costs."
Revenue rose 4 percent, to $16 billion.
"We're off to a good start in what we expect to be another strong year of financial performance for Boeing," Jim McNerney, Boeing's chief executive, said. "We are methodically working through our challenges, including the start-up of the 787, and our people remain focused on satisfying our customers and leveraging growth and productivity into better bottom-line and top-line performance for our company."
Boeing booked 289 gross orders for commercial planes during the quarter, most of them to overseas customers, raising its backlog to $271 billion. The company's total backlog, including defense orders, rose 32 percent, to $346 billion.
Noting the strength in international aviation markets, Jon Ogg on the 24/7 Wall St. blog says, "What is amazing here is that the U.S. airlines' woes are not yet bleeding over to Boeing."
Reuters - Regulatory officials turned down a
congressional request to reveal why they aborted an inquiry
into whether Bear Stearns Cos improperly valued complex
debt securities, hurting investors in the process, the Wall
Street Journal reported on Wednesday.
Reuters - Stock futures weakened early on Thursday
as investors prepared to plough into a fresh flurry of
corporate results for clues about how much a crisis in the
credit markets is hurting industrials.
Reuters - Credit Suisse notched up a further 5.3
billion Swiss francs ($5.26 billion) of credit-linked
writedowns but its core rich clients kept their money at the
bank unlike those of rival UBS.
AFP - Credit Suisse bank plunged into its first quarterly loss for five years on Thursday, reporting heavy extra writedowns because of the subprime home-loan crisis in the United States.
Reuters - Apple Inc on Wednesday
posted a 36 percent rise in quarterly profit, helped by strong
sales of Macintosh computers and iPods, but its lower profit
margin and cautious outlook disappointed investors.
AFP - Top retailer Wal-Mart's Sam's Club unit said Wednesday it is limiting the amount of rice individual shoppers could buy at one time, as rice prices hit new records around the world.
Reuters - Regulatory officials turned down a
congressional request to reveal why they aborted an inquiry
into whether Bear Stearns Cos improperly valued complex
debt securities, hurting investors in the process, the Wall
Street Journal reported on Wednesday.