PepsiCo Discovery Communications Barrick Zurich
Puma Renault ABB Rolls-Royce SingTel Nestle
posts e1/46.55bn profit General Motors Co reported a
weaker-than-expected fourth-quarter profit yesterday, citing wider
losses in Europe and lower vehicle prices plus higher costs in its core
But its shares rose slightly as the largest US automaker also made
an accounting change in the quarter, intended to signal confidence that
it will continue to be profitable in coming years.
“An entrenched GM investor may see no need to sell, while a
prospective investor may see no need to rush in,”
analyst Adam Jonas said in a research note.
Last year was GM’s second full year as a public company since
its initial public offering in the autumn of 2010, which followed the
bankruptcy restructuring and $50bn US-taxpayer bailout of the prior
Europe remains a drag for the auto industry with several analysts
citing a wider-than-expected quarterly loss by GM in that region.
GM posted a profit of 48Ao per share before one-time items, 3Ao shy
of what analysts polled by Thomson Reuters I/B/E/S had expected.
Losses in Europe totalled $699mn in the quarter and $1.8bn for all
of 2012, more than doubling from 2011, reflecting the rapid
deterioration of vehicle demand and economic conditions in the region.
It was the 13th straight year of losses in Europe.
Chief financial officer Dan Ammann said GM still sees industry
sales in Europe declining in 2013 and is “not betting on” a
pickup later in the year.
Net income in the fourth quarter rose to $892mn, or 54Ao a share,
from $472mn, or 28Ao a share, a year earlier.
The quarter included a $34.9bn reversal of a tax reserve on US and
Canadian deferred tax assets. The move, which rival Ford Motor Co made
in late 2011, reflects confidence in GM’s business going forward.
GM also took an associated non-cash goodwill asset impairment
charge of $26.2bn, wrote down $5.2bn worth of assets in Europe, and took
a charge of $2.2bn for its action last summer to cut its US salaried
Tata Motors Ltd, posted its first drop in profits in five quarters
as its Jaguar
) business faced higher spending and a drop
after 18 months of soaring profit.
and falling profitability at the British
carmaker, whose profits have propped up its weaker parent for the past
year and half, combined with a drop into the red for the Indian
company’s domestic business.
JLR said operating margin was 14% in the December quarter, down
from 17% a year ago, also due in part to a shift towards less profitable
JLR expects operating margin to remain stable in the coming
quarters, chief finance officer Ken Gregor told reporters, describing
earlier margins as “extraordinary”.
Tata’s net profit for the third quarter of the financial year
ending March 31 came in far below market estimates at Rs16.28bn
($303mn), down 52% on the year and the first fall since the three months
to September 2011.
Analysts had expected average profit of Rs28.9bn,
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Thomson Reuters Starmine.
In China, the world’s biggest auto market, JLR sales jumped
71% in 2012, making it the marquee’s No.2 market after Europe. JLR
is investing $1.7bn with local partner Chery Automotive to build a
factory in China.
JLR contributed around 90% of Tata Motors’ net profit in the
last financial year, so its margins are scrutinised more by investors
than those of Tata’s domestic business.
PepsiCo Inc reported a higher-than-expected fourth-quarter profit
yesterday, helped by increases in sales volume and prices, and gave a
2013 forecast consistent with its ongoing turnaround plan.
The maker of Gatorade sports drinks and Quaker oatmeal forecast
2013 earnings, excluding any impact from currency, to grow 7% from the
$4.10 per share it earned in 2012, a “transition year” in
which profit fell 5%.
In the just-ended fourth quarter, net income was $1.66bn, or $1.06
per share, up from $1.42bn, or 89Ao per share, a year earlier.
Excluding special items, earnings were $1.09 per share. Analysts on
average were expecting $1.05 per share, according to Thomson Reuters
Net revenue fell 1% to $19.95bn. Excluding the effect of items
including selling some businesses, an extra selling week in 2011 and
currency exchange rates, revenue increased 5%.
Higher revenue growth and better-than-expected advertising sales at
Discovery Communications Inc’s cable channels could not lift its
quarterly profit, which fell short of analysts’ estimates.
Discovery said yesterday that fourth quarter net income declined to
$224mn, or 61Ao per share where analysts were expecting 76Ao per share,
from $336mn, or 86Ao per share in the same period a year ago.
The company attributed the drop in income to higher taxes,
equity-based compensation and costs due to its acquisition of
AG’s 12 Nordic television
stations for $1.7bn.
Still, Discovery, whose cable networks include Discovery Channel,
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and Animal Planet, said total revenue rose 8% to $1.2bn, in line
“Overall the top line looks great,” said Pivotal Research
Group analyst Brian Wieser.
Advertising revenue at the company’s US channels rose 9% to
$397mn, while at its international cable networks it rose 16% to $185mn.
Corp, the world’s largest gold miner, reported a
quarterly loss yesterday, after booking a $3.8bn impairment charge to
write down the value of its Lumwana copper asset.
The Toronto-based miner also said it has no plans to build any new
mines at this time, due to the extremely challenging cost environment.
However, Barrick will continue working on its massive
on the border of Argentina and Chile, with production targeted for the
second half of 2014.
“We are increasingly taking strong action and refocusing our
business based on the principle that returns will drive production,
production will not drive returns,” said Barrick’s chief
executive Jamie Sokalsky, in a statement.
Barrick reported a fourth-quarter net loss of $3.06bn or $3.06 a
share. That compared with a year-earlier profit of $959mn, or 96Ao a
Excluding one-time items, earnings in the period were $1.11bn, or
$1.11 per share, down from $1.17bn, or $1.17 per share, in the same
period a year earlier.
Swiss insurer Zurich Insurance Group said yesterday that net profit
rose by 3.0% in 2012, reaching $3.9bn (e1/42.9bn), despite tough market
The figure beat analysts’ forecasts of around $3.3bn.
Zurich said that its sales rose by 6.6% to $73bn.
“We delivered a solid performance in 2012, a year
characterised by ongoing economic challenges,” the group’s
chief executive officer, Martin Senn, said in a statement.
See operating income.
increased by 4.0% to reach $4.08bn, while
shareholders’ equity on December 31 was $34.49bn, up 10% from a
Rio Tinto’s new chief signalled he would slash costs, focus on
selling weak assets and spend more carefully after the world’s No 3
miner reported a $3bn full-year loss, its first ever.
Chief executive Sam Walsh, the group’s former iron ore boss,
was anointed last month after his predecessor was sacked for misjudged
aluminium and coal acquisitions that led to $14.4bn in writedowns and
left the company in the red.
“We can do better and I will improve this great company
further,” Walsh told reporters, saying he would take a more
aggressive approach to selling assets that no longer fitted with the
company’s goals, and aimed to control a cost base that has soared
$2bn per year since 2009.
Rio plans to cut a cumulative $5bn by 2014, two-thirds of that from
its aluminium and energy businesses which have seen much of the rise in
costs. Efforts will include a
for its energy arm and
cutting back large city-centre offices.
Rio reported a 47% plunge in half-year underlying profit, its worst
since 2009 due to sharp falls in commodity prices, although the result
was slightly better than expected.
Underlying profit excluding writedowns fell to $4.15bn for
July-December 2012, based on Reuters calculations.
With iron ore prices having nearly doubled from a trough around $87
a tonne last September, the iron ore business is likely to dominate
again in the first half of 2013.
Germany’s Puma is to stop sponsoring sailing, including teams
in the Americas Cup and the Volvo Ocean races, as part of efforts to
focus on sports and products that bring in the most money.
Puma, which yesterday reported 2012 profit down 70%, is going
through its biggest reorganisation in 20 years to counter falling
profits and encourage more people in the US, Europe and China to buy its
shoes and T-shirts.
The group is closing stores, cutting products and last month said
it would stop sponsoring rugby, leaving the Irish rugby union team
looking for new kit.
The world’s third-largest sportswear and equipment company,
behind Nike and Adidas, is also undergoing a management reshuffle led by
, the French luxury goods group that owns the Gucci
Puma swung to a fourth-quarter net loss of e1/442.6mn, against a
consensus forecast for profit of e1/410.1mn in a Reuters poll.
Earnings were hit by costs of e1/498mn, related to a payout in
Spain to claim back trademark rights and costs for closing its
operations in Greece, Cyprus and Bulgaria. It will continue to
distribute products to these countries.
French carmaker Renault predicted an upturn in global sales will
restore its manufacturing division to profit this year, as overseas
growth outweighs Europe’s slump.
The maker of Clio subcompacts and no-frills Dacia vehicles said new
models would revive its European market share, after yearly group profit
fell 15% amid shrinking regional demand.
Despite the net income decline to e1/41.77bn ($2.4bn) on a 3.2%
revenue slide to e1/441.27bn, operational cash flow came in at
e1/4597mn, lifting Renault’s shares.
“(That) can only be described as magic when we see a car
company facing falling sales,”
analyst David Arnold
said in a note.
While the group’s namesake brand has suffered badly in Europe,
Renault’s earnings are cushioned by income from its 43.4% stake in
Japan’s Nissan and resilient sales of its low-cost cars in emerging
markets such as Russia.
Chief executive Carlos Ghosn told reporters a recently updated Clio
and upcoming mini crossover, Captur, will boost sales and profit for the
Renault brand. The marque’s share of European car sales dropped 1.2
point to 6.5% last year.
Ghosn will temporarily forego part of his bonus this year, Renault
said, as the company cuts jobs and seeks union concessions in a new
nationwide labour deal.
Swiss-Swedish engineering giant ABB said yesterday that net profit
had shrunk by 15% in 2012 to $2.7bn, but insisted it had held its ground
in a tough market.
ABB, whose headline products include power transformers, said that
earnings before interest and taxes
fell by 13% to $4.0bn from the
The group–whose main rivals include Germany’s Siemens and
France’s Alstom–underlined that sales had meanwhile grown by 4.0%
to reach $39.3bn.
“We again showed we can deliver consistent results through the
cycle,” ABB’s chief executive officer, Joe Hogan, said in a
“We delivered a decent top line and profitability in a tough
market,” he added.
ABB’s order book remained relatively stable at $40.2bn.
“Looking ahead, the fundamental long-term drivers of our
business, such as growing electricity consumption, urbanisation and
industrialisation in emerging markets, growth in renewables and the need
to increase energy and resource efficiency all remain intact,” said
Aircraft engine maker Rolls-Royce said yesterday that net profits
surged last year, boosted by strong revenues and the sale of its stake
International Aero Engines
, and appointed its new chairman.
Earnings after taxation soared to Au2.281bn ($3.537bn, e1/42.642bn)
in 2012, compared with Au850mn in 2011, the firm announced in a results
Rolls-Royce, which also makes power systems for use on land and at
sea, added that underlying revenues advanced 8% to Au12.2bn and its
order book swelled 4% to Au60.146bn.
“In the second half of the year, revenue growth increased as
we delivered 23% more engines than in the first half. Margins improved,
reflecting volume, mix, cost control and the
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chief executive John Rishton.
He added: “The strength of our order book demonstrates the
confidence our customers have in our products and services.” In the
first half, Rolls completed the sale of its 32.5% holding in US-based
joint venture International Aero Engines AG (IAE) to Pratt &
Whitney–a division of United Technologies Corp–for $1.5bn.
IAE makes V2500 engines which power the Airbus A320 family of
aircraft and the Boeing MD-90.
Singapore Telecom (SingTel) said yesterday its third quarter net
profit fell 8.3% from the previous year as it invested more to improve
growth and incurred one-off restructuring expenses.
Contributions from regional mobile phone associates were also
dented by weaker regional currencies against the Singapore dollar,
SingTel said in a statement.
Net profit for the quarter ended December 31 came in at S$827mn,
down from S$902mn a year earlier. Revenue fell 4.8% to S$4.6bn.
For the nine months to December, net profit eased 2.2% to S$2.64bn
on revenues of S$13.70, down 2.5%.
SingTel has been ramping up the roll out of its 4G network coverage
in Singapore and expects to cover the entire island-state by the end of
March. Its Australian subsidiary Optus has extended its 4G coverage in
Brisbane and the Gold Coast.
SingTel said it also registered exceptional charges of S$67mn
related to the restructuring of Optus’ workforce and the network
modernisation of Philippine associate Globe Telecom.
Last month, SingTel announced plans to divest its stake in
Swiss-based food giant Nestle announced an 11.5% increase in net
profit for 2012 yesterday, beating analysts’ forecasts with a
figure of 10.6bn Swiss francs (e1/48.8bn, $11.5bn).
Sales at the group–known for products such as is Nespresso coffee
capsules or Maggi stock cubes–rose by 10.2% to hit 92.2bn Swiss francs.
Analysts had tipped Nestle to post a net profit of 10.5bn Swiss
francs, but the group’s sales figure tallied with
“In 2012 we delivered on our commitment: a good, broad-based
performance building upon the profitable growth achieved consistently
over previous years,” Paul Bulcke, Nestle’s Belgian chief
executive, said in a statement.
The group’s said that its organic growth was 5.9%, and that it
was broad-based across all categories and locations.
The figure was 5.9% in the Americas, 2.4% in Europe and 10.3% in
Asia, Oceania and Africa.
Leading French bank BNP Paribas reported yesterday an 8.3% rise in
net profit last year to e1/46.55bn ($8.76bn), falling short of
expectations owing to exceptional items but doing better than most of
The outcome in the fourth quarter of a net profit of e1/4514mn fell
far short of a figure of e1/4969mn broadly expected by analysts polled
Dow Jones Newswires
In the last quarter, the bank made writedowns for its Italian
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to reflect Italian requirements for an increase in capital.
The bank also raised its provisions for bad risks, mainly in
respect of a particular problem at its investment arm. It also made a
special allocation to its consumer credit arm.
Senior director Francois Villeroy de Galhau told
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radio that in
the light of this, the outcome for the fourth quarter was not
significant because it included several exceptional items.
The fact that the bank managed to raise its profits last year from
the 2011 level strengthens its strong position in Europe and puts in on
a level with the best US banks in terms of profitability.
Gulf Times Newspaper 2013
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