(CNN) -- Although Apple gadgets sat under many a Christmas tree this year, the computer company is receiving some unwanted holiday-season attention.
Two separate class-action lawsuits filed last week in federal court allege that Apple and as many as eight makers of popular applications for the iPhone facilitated the sharing of private information about their customers to advertisers.
Though a recent news report claimed that many apps are sharing this personal data, the lawsuits together target just eight: Dictionary.com, the Weather Channel, internet radio service Pandora, the messaging app textPlus 4, as well as the makers of entertainment or game apps Talking Tom Cat, Paper Toss, Pumpkin Maker and Pimple Popper Lite.
The plaintiff leading one of the suits, Los Angeles County resident Jonathan Lalo, has been using four of those apps on his iPhone, said Dave Stampley, a partner at KamberLaw, which is bringing the case in a San Jose, California, district court.
"Mr. Lalo has had some of these apps since they were first issued -- in some cases, years," Stampley told CNN.
A copy of Lalo's suit, obtained by CNN, claims many iPhone and iPad owners have been "the victims of privacy violations and unfair business practices."
Both cases are seeking class-action status in the hopes of covering all Americans that are allegedly affected. More app developers could be added to the suits, or sued separately, as more plaintiffs join the case, Stampley said.
Lawyers filed the suits in U.S. District Court on behalf of the named plaintiffs and an unspecified number of unnamed plaintiffs.
The other suit was filed Thursday on behalf of three Texas men and a California woman, all of them iPhone owners. It states that "their personal, private information was obtained without their knowledge or consent ... their personal property -- their computer -- was hijacked by Defendants and turned into a device capable of spying on their every online move."
The plaintiffs seek an unspecified amount in compensatory and punitive damages.
An Apple spokesperson could not be reached for comment because its press department is closed for the holidays, said a company message.
Apple recently launched an ad network of its own, though that does not seem to be a target in the suits. Apple has said app makers must obtain users' permission before transmitting data.
The suits follow a December 17 Wall Street Journal article highlighting dozens of apps that reportedly collect usage data and send personal info to advertisers without the user's consent or knowledge.
"I think it was through the Journal," that Lalo discovered the issue and decided to connect with KamberLaw, said Stampley. That investigation by the newspaper claimed that Android apps were also sharing personal info but that the Android platform was less intrusive.
Mobile app data-sharing differs from websites, which commonly use small files called cookies to track users, because smartphone apps can access a device's UDID, an unchangeable string that's embedded in each Apple device.
People can generally delete cookies on most browsers, but they can't change or hide a UDID. This allows advertisers to more reliably tie behaviors to a single iPhone user, for example.
Source: CNN
http://edition.cnn.com
December 30, 2010
December 29, 2010
Apple sued over iPad and iPhone app 'data leaks'
Two groups of iPhone and iPad users are suing Apple saying apps for the gadgets leak personally identifiable data.
The groups want to stop personal data being passed around without owners being notified or compensated.
Apple is just one of six application makers being pursued by the two groups of consumers.
The legal firm putting together one class action lawsuit said it might also take action against Google over data leaking from Android applications.
Backflip Studios, the Weather Channel, Dictionary.com and others were named in court papers supporting the lawsuits.
The papers allege that many applications collect so much personal data that users can be individually identified. This is despite Apple operating a policy that allows data to be shared with third parties only if an app requires the information to keep running.
The complainants said many firms, including advertisers, were managing to track and identify individuals via the unique device ID Apple assigns to every gadget. Apple does not do enough to enforce its privacy policy or restrict use of unique IDs, they allege.
Apple has yet to respond to requests for comment.
The law firm behind one of the class action lawsuits said it was considering whether to prepare a case against Google, saying that many Android applications leak personal data too.
Despite the filing of separate lawsuits, some experts suggest the court cases will not succeed.
"If this were a major issue, all web browsers would have to shut down and there would not be any advertising on the internet," Trip Chowdhry, Global Equities research analyst, told Reuters.
Source: BBC
www.bbc.co.uk
The groups want to stop personal data being passed around without owners being notified or compensated.
Apple is just one of six application makers being pursued by the two groups of consumers.
The legal firm putting together one class action lawsuit said it might also take action against Google over data leaking from Android applications.
Backflip Studios, the Weather Channel, Dictionary.com and others were named in court papers supporting the lawsuits.
The papers allege that many applications collect so much personal data that users can be individually identified. This is despite Apple operating a policy that allows data to be shared with third parties only if an app requires the information to keep running.
The complainants said many firms, including advertisers, were managing to track and identify individuals via the unique device ID Apple assigns to every gadget. Apple does not do enough to enforce its privacy policy or restrict use of unique IDs, they allege.
Apple has yet to respond to requests for comment.
The law firm behind one of the class action lawsuits said it was considering whether to prepare a case against Google, saying that many Android applications leak personal data too.
Despite the filing of separate lawsuits, some experts suggest the court cases will not succeed.
"If this were a major issue, all web browsers would have to shut down and there would not be any advertising on the internet," Trip Chowdhry, Global Equities research analyst, told Reuters.
Source: BBC
www.bbc.co.uk
December 28, 2010
U.K. Law on Bribes Has Firms in a Sweat
Multinational companies have spent millions of dollars beefing up their compliance programs amid a U.S. crackdown on foreign bribery. Now, they are facing a new British law they fear will force them to rethink their compliance strategies and upend their business practices.
The new law, called the Bribery Act, takes effect in April. It resembles the U.S. Foreign Corrupt Practices Act, which bars companies that trade on U.S. exchanges from bribing foreign government officials to gain a business advantage.
The British law, however, is more sweeping than its American counterpart, and corporate legal advisers are uncertain how extensive the fallout might be.
"There are a lot of people saying this is the FCPA on steroids," says Mark Mendelsohn, a Washington lawyer who oversaw FCPA prosecutions at the U.S. Justice Department from 2005 until earlier this year. Mr. Mendelsohn is now a partner at corporate-defense firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Legal experts say it isn't clear how vigorously the law will be enforced or what resources Britain will commit to investigating or prosecuting suspected violations. But that point has done little to reduce the trepidation among corporate counsels.
The British law, however, is more sweeping than its American counterpart, and corporate legal advisers are uncertain how extensive the fallout might be.
"There are a lot of people saying this is the FCPA on steroids," says Mark Mendelsohn, a Washington lawyer who oversaw FCPA prosecutions at the U.S. Justice Department from 2005 until earlier this year. Mr. Mendelsohn is now a partner at corporate-defense firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Legal experts say it isn't clear how vigorously the law will be enforced or what resources Britain will commit to investigating or prosecuting suspected violations. But that point has done little to reduce the trepidation among corporate counsels.
Richard Alderman, head of Britain's Serious Fraud Office, the law's enforcer, recently told the Sunday Telegraph newspaper that "sensible and proportionate expenditure on hospitality will remain perfectly lawful."
Mr. Alderman has called the new law "a model of clarity," and said that it was carefully reviewed during the legislative process.
An SFO spokesman said Mr. Alderman was overseas for the holidays and couldn't be reached for comment.
SFO officials have publicly mentioned the pharmaceutical industry as a potential target of the law, citing U.S. Justice Department investigations into bribery allegations against drug and medical-device makers, but other industries that operate in regions where corruption is rampant will also face scrutiny.
The Bribery Act comes as more nations are taking a tougher stance against corruption. China, which some antibribery groups rank high on the corruption scale, has prosecuted corporate-bribery cases recently, and many European nations have bolstered anticorruption laws.
The moves follow tighter enforcement of the FCPA in recent years by the U.S. Justice Department and Securities and Exchange Commission. So far this year, the Justice Department alone has prosecuted 22 FCPA cases and collected hundreds of millions of dollars in fines.
Most multinational companies have put elaborate programs in place to avoid running afoul of the FCPA. These programs typically establish a channel through which employees can report suspected bribery and companies can investigate the complaints internally. Some companies also are hiring compliance consultants or offering books and seminars to help prepare employees for the ethical minefields they might face in some countries.
In the past few months, however, companies have started to worry that their compliance programs could be undermined by a U.S. law that entitles whistle-blowers to share in money collected by the SEC in fraud and corruption cases. They fear the measure, part of the Dodd-Frank financial-reform bill, gives employees little incentive to report suspected bribery internally when they could ultimately reap a windfall by taking their complaints directly to the SEC.
The Bribery Act is expected to further complicate compliance.
The law allows companies under scrutiny to avoid trouble by having an adequate compliance program. But British authorities haven't defined what constitutes an adequate program.
"The people who run compliance at all the major U.S. public companies have a lot more on their plate," says George Terwilliger III, a partner at White & Case LLP in Washington who works on FCPA cases. "It is sort of a double whammy."
The Bribery Act, which replaces a jumble of British bribery laws and rulings, boosts the maximum penalty for bribery to 10 years in prison from seven, and sets no limits on fines.
The law's scope is murky, legal experts say, leaving some companies to fear they may fall under its jurisdiction if they merely sell products in Britain. It says that a company can be liable if anyone associated with it pays a bribe. But it isn't clear whether that applies to agents, consultants, vendors, joint ventures and the like, attorneys say.
The law prohibits facilitation payments, or "grease payments," small bribes common in some countries to get mail service, phone hook-ups or other services that otherwise would be significantly delayed.
Those types of payments are legal under the FCPA as long as they are recorded. The U.S. Chamber of Commerce has called the British law's criminalization of the payments "troubling."
"Lots of clients are very worried, confused, uncertain," said Tim Coleman, a Washington-based global investigations partner at Freshfields Bruckhaus Deringer LLP. "Some are in denial."
Source: The Wall Street Journal
http://online.wsj.com
The new law, called the Bribery Act, takes effect in April. It resembles the U.S. Foreign Corrupt Practices Act, which bars companies that trade on U.S. exchanges from bribing foreign government officials to gain a business advantage.
The British law, however, is more sweeping than its American counterpart, and corporate legal advisers are uncertain how extensive the fallout might be.
"There are a lot of people saying this is the FCPA on steroids," says Mark Mendelsohn, a Washington lawyer who oversaw FCPA prosecutions at the U.S. Justice Department from 2005 until earlier this year. Mr. Mendelsohn is now a partner at corporate-defense firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Legal experts say it isn't clear how vigorously the law will be enforced or what resources Britain will commit to investigating or prosecuting suspected violations. But that point has done little to reduce the trepidation among corporate counsels.
The British law, however, is more sweeping than its American counterpart, and corporate legal advisers are uncertain how extensive the fallout might be.
"There are a lot of people saying this is the FCPA on steroids," says Mark Mendelsohn, a Washington lawyer who oversaw FCPA prosecutions at the U.S. Justice Department from 2005 until earlier this year. Mr. Mendelsohn is now a partner at corporate-defense firm Paul, Weiss, Rifkind, Wharton & Garrison LLP.
Legal experts say it isn't clear how vigorously the law will be enforced or what resources Britain will commit to investigating or prosecuting suspected violations. But that point has done little to reduce the trepidation among corporate counsels.
Richard Alderman, head of Britain's Serious Fraud Office, the law's enforcer, recently told the Sunday Telegraph newspaper that "sensible and proportionate expenditure on hospitality will remain perfectly lawful."
Mr. Alderman has called the new law "a model of clarity," and said that it was carefully reviewed during the legislative process.
An SFO spokesman said Mr. Alderman was overseas for the holidays and couldn't be reached for comment.
SFO officials have publicly mentioned the pharmaceutical industry as a potential target of the law, citing U.S. Justice Department investigations into bribery allegations against drug and medical-device makers, but other industries that operate in regions where corruption is rampant will also face scrutiny.
The Bribery Act comes as more nations are taking a tougher stance against corruption. China, which some antibribery groups rank high on the corruption scale, has prosecuted corporate-bribery cases recently, and many European nations have bolstered anticorruption laws.
The moves follow tighter enforcement of the FCPA in recent years by the U.S. Justice Department and Securities and Exchange Commission. So far this year, the Justice Department alone has prosecuted 22 FCPA cases and collected hundreds of millions of dollars in fines.
Most multinational companies have put elaborate programs in place to avoid running afoul of the FCPA. These programs typically establish a channel through which employees can report suspected bribery and companies can investigate the complaints internally. Some companies also are hiring compliance consultants or offering books and seminars to help prepare employees for the ethical minefields they might face in some countries.
In the past few months, however, companies have started to worry that their compliance programs could be undermined by a U.S. law that entitles whistle-blowers to share in money collected by the SEC in fraud and corruption cases. They fear the measure, part of the Dodd-Frank financial-reform bill, gives employees little incentive to report suspected bribery internally when they could ultimately reap a windfall by taking their complaints directly to the SEC.
The Bribery Act is expected to further complicate compliance.
The law allows companies under scrutiny to avoid trouble by having an adequate compliance program. But British authorities haven't defined what constitutes an adequate program.
"The people who run compliance at all the major U.S. public companies have a lot more on their plate," says George Terwilliger III, a partner at White & Case LLP in Washington who works on FCPA cases. "It is sort of a double whammy."
The Bribery Act, which replaces a jumble of British bribery laws and rulings, boosts the maximum penalty for bribery to 10 years in prison from seven, and sets no limits on fines.
The law's scope is murky, legal experts say, leaving some companies to fear they may fall under its jurisdiction if they merely sell products in Britain. It says that a company can be liable if anyone associated with it pays a bribe. But it isn't clear whether that applies to agents, consultants, vendors, joint ventures and the like, attorneys say.
The law prohibits facilitation payments, or "grease payments," small bribes common in some countries to get mail service, phone hook-ups or other services that otherwise would be significantly delayed.
Those types of payments are legal under the FCPA as long as they are recorded. The U.S. Chamber of Commerce has called the British law's criminalization of the payments "troubling."
"Lots of clients are very worried, confused, uncertain," said Tim Coleman, a Washington-based global investigations partner at Freshfields Bruckhaus Deringer LLP. "Some are in denial."
Source: The Wall Street Journal
http://online.wsj.com
December 27, 2010
Facebook world: What's missing from this picture?
Hong Kong, China (CNN) – There is something plainly fascinating about Paul Butler's map of the world. The Facebook intern used data from the social networking site to create a map of people's friendships across the globe and to see how they related to geographical and political boundaries. After experimenting with different techniques, he ended up using arced, weighted lines to connect cities based on the volume of the Facebook friendships between them.
In Butler's words, the result is "a surprisingly detailed map of the world. Not only were continents visible, certain international borders were apparent as well. What really struck me, though, was knowing that the lines didn't represent coasts or rivers or political borders, but real human relationships."
The lines also map out, to a large extent, Facebook's global penetration. One is struck by the fluorescent clusters in the United States and Europe, where Facebook is widely used; the clear contours of Indonesia, home of the most Facebook users in Asia; and the giant hole where China should be.
Blocked by the Great Firewall, Facebook can boast few active users in China. Local social networks like Renren, Xiaonei and Kaixin001 dominate the market. Instead of connecting through Facebook Chat, millions upon millions of users chat away their work days on Tencent's QQ and MSN Messenger.
The absence of China on Facebook's Visualizing Friends Map did not go unnoticed among China's microbloggers, as Wang Xiaojie and Jo Ling Kent from CNN's Beijing bureau found when they combed the Chinese web.
"At first sight I wonder why China is not on the map; but after seeing the Facebook logo at the bottom, I know why," says one user.
Another asks: "When can China shine on this map that includes 500 million other people?"
One savvy netizen even spots an additional reason for China's absence from the map. Chinese users who circumvent the country's internet restrictions by using a VPN server appear as users in foreign cities. "So even if we use Facebook in China, we still can not be seen on the map. Haha!, " he writes.
Also under discussion online: Facebook CEO Mark Zuckerberg's first visit to China. It may be a personal vacation, but he appears to be making the rounds at the country's top Internet companies. He toured Baidu headquarters with Robin Li, founder of China's dominant search engine, and has since been reportedly spotted at the offices of leading web portal Sina.com.
Employees at the Chinese companies have been snapping pictures of Zuckerberg and posting them online. It's the closest they'll get to the Internet Wunderkind.
After all, they can't friend him on Facebook.
Source: CNN
http://business.blogs.cnn.com/
In Butler's words, the result is "a surprisingly detailed map of the world. Not only were continents visible, certain international borders were apparent as well. What really struck me, though, was knowing that the lines didn't represent coasts or rivers or political borders, but real human relationships."
The lines also map out, to a large extent, Facebook's global penetration. One is struck by the fluorescent clusters in the United States and Europe, where Facebook is widely used; the clear contours of Indonesia, home of the most Facebook users in Asia; and the giant hole where China should be.
Blocked by the Great Firewall, Facebook can boast few active users in China. Local social networks like Renren, Xiaonei and Kaixin001 dominate the market. Instead of connecting through Facebook Chat, millions upon millions of users chat away their work days on Tencent's QQ and MSN Messenger.
The absence of China on Facebook's Visualizing Friends Map did not go unnoticed among China's microbloggers, as Wang Xiaojie and Jo Ling Kent from CNN's Beijing bureau found when they combed the Chinese web.
"At first sight I wonder why China is not on the map; but after seeing the Facebook logo at the bottom, I know why," says one user.
Another asks: "When can China shine on this map that includes 500 million other people?"
One savvy netizen even spots an additional reason for China's absence from the map. Chinese users who circumvent the country's internet restrictions by using a VPN server appear as users in foreign cities. "So even if we use Facebook in China, we still can not be seen on the map. Haha!, " he writes.
Also under discussion online: Facebook CEO Mark Zuckerberg's first visit to China. It may be a personal vacation, but he appears to be making the rounds at the country's top Internet companies. He toured Baidu headquarters with Robin Li, founder of China's dominant search engine, and has since been reportedly spotted at the offices of leading web portal Sina.com.
Employees at the Chinese companies have been snapping pictures of Zuckerberg and posting them online. It's the closest they'll get to the Internet Wunderkind.
After all, they can't friend him on Facebook.
Source: CNN
http://business.blogs.cnn.com/
December 24, 2010
KPPU: Multinational Companies More Compliant
TEMPO Interactive, Jakarta:Tresna Soemardi, chief of the Business Competition Oversight Commission (KPPU), said he had received notification of six future acquisitions, four of which involved multinational companies.
“Multinational companies pay attention to acquisition reports because in advanced countries such reports are the norm,” Tresna said in a seminar on business competition in Jakarta yesterday.
The six reports included PT Komatsu Indonesia’s plans to acquire PT Pandu Dayatama Patria, the Meadown Asia Company Limited’s planned acquisition of PT Matahari, Prudential Plc’s plans to buy AIA Group Limited, and Unilever Indonesia’s plans to acquire BV Sara Lee Body Care.
Local companies that reported their acquisition plans included PT Tuah Turangga Agung in relation to PT Agung Bara Prima, and PT Bank Rakyat Indonesia’s plans to acquire PT Bank Agroniaga.
The KPPU said there were no problems with any of the acquisition plans.
Source: http://www.tempointeractive.com
“Multinational companies pay attention to acquisition reports because in advanced countries such reports are the norm,” Tresna said in a seminar on business competition in Jakarta yesterday.
The six reports included PT Komatsu Indonesia’s plans to acquire PT Pandu Dayatama Patria, the Meadown Asia Company Limited’s planned acquisition of PT Matahari, Prudential Plc’s plans to buy AIA Group Limited, and Unilever Indonesia’s plans to acquire BV Sara Lee Body Care.
Local companies that reported their acquisition plans included PT Tuah Turangga Agung in relation to PT Agung Bara Prima, and PT Bank Rakyat Indonesia’s plans to acquire PT Bank Agroniaga.
The KPPU said there were no problems with any of the acquisition plans.
Source: http://www.tempointeractive.com
December 23, 2010
Apple Shares Hit Life-Time High, What Next?
By Balasubramanyam Seshan
Shares of iPhone maker Apple Inc. (AAPL) reached an all-time high of $325.72 on Wednesday's regular trading session, after it said shipments of the second-generation version of Apple TV to exceed 1 million units this week.
Apple stock finished Wednesday up 0.29 percent at $325.16 with an average volume of 17.71 million shares. In the pre-market hours Thursday, Apple shares were trading down 0.05 percent to $325.00 on the NASDAQ stock market.
Apple's market cap hit $298.27 billion on Wednesday, leaving it ahead of rival Microsoft Corp. (MSFT), which has market cap of $241.16 billion, as the largest technology company in the world and second largest company in market capitalization.
In September, Apple overtook PetroChina Co. (PTR) to become the world's second largest company by market value. However, it still has to go a long way to surpass Exxon Mobil Corp. (XOM) in the market capitalization where oil giant retains the top spot with a whooping $367.10 billion.
On the other hand, Apple's price-to-earnings (P/E) ratio of 21.46 is ahead of software giant Microsoft's 12.15, and Exxon's 12.89. P/E ratio is a valuation ratio of a company's current share price compared to its per-share earnings over the last twelve months.
In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. The P/E is sometimes referred to as the "multiple", because it shows how much investors are willing to pay per dollar of earnings.
On October 13, Apple shares blew past the $300-mark for the first time in the company's history on the back of growing popularity of the iPhone 4, the iPod and especially the iPad.
Jobs Doing Job For Apple
Apple's success has been largely credited to its co-founder Steve Jobs, who was named the world's best performing CEO last year, according to January 2010 issue of Harvard Business Review.
Recently, the U.S. President Barack Obama during a speech on Wednesday referred to Steve Jobs as an example of the "American dream" and one whose wealth should be celebrated, according to Cnet.
On Dec. 23, British international business paper the Financial Times named Steve Jobs as its "Person of the Year" this week.
Jobs also recently made in to Forbes magazine's annual list of the wealthiest Americans, climbing to 42nd place with net worth of $6.1 billion as on September 2010.
"Insanely creative Apple co-founder transforms multibillion-dollar industry every few years. First, personal computers with Apple II, Macintosh; then film with Pixar; music (iTunes), mobile (iPhone). Now iPad is treated as messiah tablet, savior for publishing industry. Apple still sells computers, but twice as much revenue now comes from music distribution and hand-held devices," Forbes stated in the profile of Steve Jobs.
Apple TV -- A Game Changer in TV Space
"We believe the Apple TV is now positioned to become a more material contributor and game changer in the TV space. But we believe a major catalyst for the set-top box would be the addition of an App Store, allowing users to download new applications for the Apple TV," said Shaw Wu, an analyst at Kaufman Bros said in a report to clients.
"While the new Apple TV has definitely generated greater consumer interest, it is still too small to really impact estimates. We view the Apple TV as part of AAPL's longer-term living room ambitions, of which its new North Carolina data center is also a part," said Peter Misek, an analyst at Jefferies in a note to clients.
Apple releaesd the second-generation version of Apple TV on September 1, 2010. The new Apple TV offers the simplest way to watch your favorite HD movies and TV shows, stream content from Netflix, YouTube, Flickr and MobileMe, for just $99. iTunes users are now renting and purchasing over 400,000 TV episodes and over 150,000 movies per day.
Apple TV has Apple's A4 (ARM Cortex-A8) chip processor and graphics processing of PowerVR SGX535 with a memory of 256 MB. The new version has no hard drive; however, it does have 8 gigabytes of flash storage for caching purposes. All content is drawn from online or locally connected sources.
The latest TV has connectivity port for Micro-USB, HDMI, infrared receiver, and optical audio with networking capacity of Wi-Fi (802.11a/b/g/n), 10/100 Ethernet. About a quarter of the size and one-third of the price of the original Apple TV, the new device can stream rented content from iTunes and video from computers or iOS devices via AirPlay.
The second generation Apple TV runs a version of iOS (known as iPhone OS prior to June 2010), rather than the modified Mac OS X of the previous model. The interface is similar to that of the previous generation, with only slight modifications. The second generation sold 250,000 units in the first two weeks it was available.
Apple's operating system iOS 4.2.1 was released on November 22 with support for all Apple A4 devices, 3rd, and 2nd generation devices, with the exclusion of the Apple TV. It brings initial support of iOS 4.x to iPad, plus AirPlay and AirPrint to all compatible devices. It also contains minor changes to the YouTube app and alters the multitasking animation.
On December 14, Apple released a new version of Apple TV (version 4.1.1), with features such as enhanced TV resolution. As the second generation Apple TV is iOS based, developers have used the traditional Jailbreaking techniques to install additional software on the Apple TV.
Apple on Wednesday updated its Remote application for iOS devices, adding the ability to remotely stream a video from a computer's iTunes library to the new Apple TV via AirPlay. Remote version 2.1 (iTunes link) is now available on the App Store as a free download. It is compatible with the iPhone, iPod touch and iPad, and requires iOS 3.1.2 or later.
Source: www.ibtimes.com
Shares of iPhone maker Apple Inc. (AAPL) reached an all-time high of $325.72 on Wednesday's regular trading session, after it said shipments of the second-generation version of Apple TV to exceed 1 million units this week.
Apple stock finished Wednesday up 0.29 percent at $325.16 with an average volume of 17.71 million shares. In the pre-market hours Thursday, Apple shares were trading down 0.05 percent to $325.00 on the NASDAQ stock market.
Apple's market cap hit $298.27 billion on Wednesday, leaving it ahead of rival Microsoft Corp. (MSFT), which has market cap of $241.16 billion, as the largest technology company in the world and second largest company in market capitalization.
In September, Apple overtook PetroChina Co. (PTR) to become the world's second largest company by market value. However, it still has to go a long way to surpass Exxon Mobil Corp. (XOM) in the market capitalization where oil giant retains the top spot with a whooping $367.10 billion.
On the other hand, Apple's price-to-earnings (P/E) ratio of 21.46 is ahead of software giant Microsoft's 12.15, and Exxon's 12.89. P/E ratio is a valuation ratio of a company's current share price compared to its per-share earnings over the last twelve months.
In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. The P/E is sometimes referred to as the "multiple", because it shows how much investors are willing to pay per dollar of earnings.
On October 13, Apple shares blew past the $300-mark for the first time in the company's history on the back of growing popularity of the iPhone 4, the iPod and especially the iPad.
Jobs Doing Job For Apple
Apple's success has been largely credited to its co-founder Steve Jobs, who was named the world's best performing CEO last year, according to January 2010 issue of Harvard Business Review.
Recently, the U.S. President Barack Obama during a speech on Wednesday referred to Steve Jobs as an example of the "American dream" and one whose wealth should be celebrated, according to Cnet.
On Dec. 23, British international business paper the Financial Times named Steve Jobs as its "Person of the Year" this week.
Jobs also recently made in to Forbes magazine's annual list of the wealthiest Americans, climbing to 42nd place with net worth of $6.1 billion as on September 2010.
"Insanely creative Apple co-founder transforms multibillion-dollar industry every few years. First, personal computers with Apple II, Macintosh; then film with Pixar; music (iTunes), mobile (iPhone). Now iPad is treated as messiah tablet, savior for publishing industry. Apple still sells computers, but twice as much revenue now comes from music distribution and hand-held devices," Forbes stated in the profile of Steve Jobs.
Apple TV -- A Game Changer in TV Space
"We believe the Apple TV is now positioned to become a more material contributor and game changer in the TV space. But we believe a major catalyst for the set-top box would be the addition of an App Store, allowing users to download new applications for the Apple TV," said Shaw Wu, an analyst at Kaufman Bros said in a report to clients.
"While the new Apple TV has definitely generated greater consumer interest, it is still too small to really impact estimates. We view the Apple TV as part of AAPL's longer-term living room ambitions, of which its new North Carolina data center is also a part," said Peter Misek, an analyst at Jefferies in a note to clients.
Apple releaesd the second-generation version of Apple TV on September 1, 2010. The new Apple TV offers the simplest way to watch your favorite HD movies and TV shows, stream content from Netflix, YouTube, Flickr and MobileMe, for just $99. iTunes users are now renting and purchasing over 400,000 TV episodes and over 150,000 movies per day.
Apple TV has Apple's A4 (ARM Cortex-A8) chip processor and graphics processing of PowerVR SGX535 with a memory of 256 MB. The new version has no hard drive; however, it does have 8 gigabytes of flash storage for caching purposes. All content is drawn from online or locally connected sources.
The latest TV has connectivity port for Micro-USB, HDMI, infrared receiver, and optical audio with networking capacity of Wi-Fi (802.11a/b/g/n), 10/100 Ethernet. About a quarter of the size and one-third of the price of the original Apple TV, the new device can stream rented content from iTunes and video from computers or iOS devices via AirPlay.
The second generation Apple TV runs a version of iOS (known as iPhone OS prior to June 2010), rather than the modified Mac OS X of the previous model. The interface is similar to that of the previous generation, with only slight modifications. The second generation sold 250,000 units in the first two weeks it was available.
Apple's operating system iOS 4.2.1 was released on November 22 with support for all Apple A4 devices, 3rd, and 2nd generation devices, with the exclusion of the Apple TV. It brings initial support of iOS 4.x to iPad, plus AirPlay and AirPrint to all compatible devices. It also contains minor changes to the YouTube app and alters the multitasking animation.
On December 14, Apple released a new version of Apple TV (version 4.1.1), with features such as enhanced TV resolution. As the second generation Apple TV is iOS based, developers have used the traditional Jailbreaking techniques to install additional software on the Apple TV.
Apple on Wednesday updated its Remote application for iOS devices, adding the ability to remotely stream a video from a computer's iTunes library to the new Apple TV via AirPlay. Remote version 2.1 (iTunes link) is now available on the App Store as a free download. It is compatible with the iPhone, iPod touch and iPad, and requires iOS 3.1.2 or later.
Source: www.ibtimes.com
December 22, 2010
Skype apologises for losing half of daily call traffic
By Maggie Shiels
Millions of people around the globe have been hit by an outage at the popular internet phone service Skype.
Users as far afield as Japan, Europe and the US have all reported problems.
The company which prides itself on providing relatively reliable service last suffered a major outage in 2007.
"We take outages like this really seriously and apologise for the inconvenience users are having," Tony Bates, Skype chief executive officer told BBC News.
"Right now it looks like clients are coming on and offline and sometimes they are crashing in the middle of calls. We are deep in the middle of investigating the cause of the problem and have teams working hard to remedy the situation," Mr Bates said.
On Skype's Twitter account, the company said their "engineers and site operations team are working non-stop to get things back to normal".
The news blog ReadWriteWeb said they have monitored complaints from users who reported that they are unable to log into the service and that the programme is crashing across all platforms, whether on their mobile device or PC.
Mr Bates did not rule in or rule out the possibility of a malicious attack and said "all avenues" were being explored.
He estimated that as a result of the outage, Skype has lost around 10 million calls.
Mr Bates told the BBC that normal call volume for the time of day would be 20m.
Om Malik, an industry commentator and editor of the Gigaom.com website, is not impressed.
"Skype is one of the key applications of the modern web," he said.
"It is already a hit with consumers, and over the past few years it has become part of the economic fabric for startups and small businesses around the world. I am not sure we can comprehend the productivity cost of this outage.
"The outage comes at a time when Skype is starting to ask larger corporations for their business. If I am a big business, I would be extremely cautious about adopting Skype for business, especially in light of this current outage," added Mr Malik.
Source: BBC
www.bbc.co.uk
Millions of people around the globe have been hit by an outage at the popular internet phone service Skype.
Users as far afield as Japan, Europe and the US have all reported problems.
The company which prides itself on providing relatively reliable service last suffered a major outage in 2007.
"We take outages like this really seriously and apologise for the inconvenience users are having," Tony Bates, Skype chief executive officer told BBC News.
"Right now it looks like clients are coming on and offline and sometimes they are crashing in the middle of calls. We are deep in the middle of investigating the cause of the problem and have teams working hard to remedy the situation," Mr Bates said.
On Skype's Twitter account, the company said their "engineers and site operations team are working non-stop to get things back to normal".
The news blog ReadWriteWeb said they have monitored complaints from users who reported that they are unable to log into the service and that the programme is crashing across all platforms, whether on their mobile device or PC.
Mr Bates did not rule in or rule out the possibility of a malicious attack and said "all avenues" were being explored.
He estimated that as a result of the outage, Skype has lost around 10 million calls.
Mr Bates told the BBC that normal call volume for the time of day would be 20m.
Om Malik, an industry commentator and editor of the Gigaom.com website, is not impressed.
"Skype is one of the key applications of the modern web," he said.
"It is already a hit with consumers, and over the past few years it has become part of the economic fabric for startups and small businesses around the world. I am not sure we can comprehend the productivity cost of this outage.
"The outage comes at a time when Skype is starting to ask larger corporations for their business. If I am a big business, I would be extremely cautious about adopting Skype for business, especially in light of this current outage," added Mr Malik.
Source: BBC
www.bbc.co.uk
December 21, 2010
Report: Google TV devices delayed as Google tweaks software
(Mashable) -- We won't be seeing too many Google TV-powered devices at the next CES, which takes place in Las Vegas in January, because Google needs more time to work on the software, reports the New York Times citing unnamed sources.
Right now, Google's original partners for Google TV -- Sony and Logitech -- are the only ones actually selling the devices.
Samsung and Vizio are still supposed to reveal their Google TV devices at CES, but we'll have to wait a little longer for devices from Toshiba, Sharp and LG.
We can expect more Google TV devices after the software is updated, which will probably mean the addition of the Android Market. It should happen sometime next year, NYT's sources claim.
This is another in a series of obstacles for Google's foray into TV space; after receiving some lackluster initial reviews, Google TV suffered another blow when it got blocked by several U.S. major broadcast and cable networks.
By Stan Schroeder, Mashable
Source: CNN
http://edition.cnn.com
Right now, Google's original partners for Google TV -- Sony and Logitech -- are the only ones actually selling the devices.
Samsung and Vizio are still supposed to reveal their Google TV devices at CES, but we'll have to wait a little longer for devices from Toshiba, Sharp and LG.
We can expect more Google TV devices after the software is updated, which will probably mean the addition of the Android Market. It should happen sometime next year, NYT's sources claim.
This is another in a series of obstacles for Google's foray into TV space; after receiving some lackluster initial reviews, Google TV suffered another blow when it got blocked by several U.S. major broadcast and cable networks.
By Stan Schroeder, Mashable
Source: CNN
http://edition.cnn.com
December 20, 2010
Mark Zuckerberg of Facebook named Time's person of 2010
Time magazine has picked Facebook CEO Mark Zuckerberg as its annual Person of the Year, the figure it believes had the most influence on events in 2010.
December 16, 2010
Yahoo cutting its workforce by 4%
Yahoo has confirmed that it is cutting its workforce by 4% or 600 people.
The internet firm has now announced redundancies four times in three years, as it cuts costs to try to lift profits that trail bigger rival Google.
The redundancies also follow after Google recently announced a 10% pay increase for every member of staff.
In 2008 Yahoo rejected a $47.5bn (£30bn) bid from Microsoft. Today its market capitalisation - the combined value of its shares - totals $21.68bn.
Yahoo said in a statement: "Today's personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion, and to support our strategy to deliver differentiated products to the marketplace."
The company's revenues have risen by less than 2% so far this year, compared with growth of 23% at Google.
Maggie Shiels, the BBC's technology reporter in Silicon Valley, said: "The Yahoo job cuts come in stark contrast to what is happening in Silicon Valley as a whole, where companies like Google and Facebook have embarked on an aggressive hiring spree.
"Undoubtedly some of those employees who have been given pink slips are likely to see job offers landing in their email boxes amid a fierce battle for talent in the Valley.
"As for the prospects of Yahoo's CEO Carol Bartz, these cuts are only likely to intensify pressure on her and increase criticism of her role in failing to improve the fortunes of the once mighty internet company."
Yahoo had 14,100 employees at the end of September.
The internet firm has now announced redundancies four times in three years, as it cuts costs to try to lift profits that trail bigger rival Google.
The redundancies also follow after Google recently announced a 10% pay increase for every member of staff.
In 2008 Yahoo rejected a $47.5bn (£30bn) bid from Microsoft. Today its market capitalisation - the combined value of its shares - totals $21.68bn.
Yahoo said in a statement: "Today's personnel changes are part of our ongoing strategy to best position Yahoo for revenue growth and margin expansion, and to support our strategy to deliver differentiated products to the marketplace."
The company's revenues have risen by less than 2% so far this year, compared with growth of 23% at Google.
Maggie Shiels, the BBC's technology reporter in Silicon Valley, said: "The Yahoo job cuts come in stark contrast to what is happening in Silicon Valley as a whole, where companies like Google and Facebook have embarked on an aggressive hiring spree.
"Undoubtedly some of those employees who have been given pink slips are likely to see job offers landing in their email boxes amid a fierce battle for talent in the Valley.
"As for the prospects of Yahoo's CEO Carol Bartz, these cuts are only likely to intensify pressure on her and increase criticism of her role in failing to improve the fortunes of the once mighty internet company."
Yahoo had 14,100 employees at the end of September.
Was BP grossly negligent?
Robert Peston
The significance of the Obama administration's decision to sue BP and four other business over the Deepwater Horizon explosion and oil spill is that the US Justice Department may try to prove gross negligence on the part of BP.
Because if BP were found to be grossly negligent, the costs for BP of the debacle could rise very significantly indeed, for two reasons.
First, it could potentially add almost $16bn or more than £10bn to the civil penalties BP would have to pay under the US Clean Water Act.
Second, it would make it much harder (perhaps impossible) for BP to recover costs it is incurring in the clean up and restitution from its co-owners of the Macondo Well, Anadarko and Mitsui.
BP says it remains confident that it was not guilty of gross negligence. But if it is wrong, the $39.9bn or £25bn it has set aside to cover the costs stemming from the disaster will prove to be too little.
A further source of uneasiness for BP's shareholders is the statement by the US Attorney General Eric Holder that under the Oil Pollution Act he is intending to prove "that these defendants are responsible for government removal costs, economic losses and environmental damages without limitation."
For once, the verdict of the market in a few minutes may be instructive.
Update 0838: Investors plainly believe that the nature of the Department of Justice's case against BP hasn't increased potential liabilities for the company in a fundamental way.
BP's shares have fallen 2.5% this morning to 465p - which takes the edge off a recent strong run in BP shares.
Source: BBC
www.bbc.co.uk
The significance of the Obama administration's decision to sue BP and four other business over the Deepwater Horizon explosion and oil spill is that the US Justice Department may try to prove gross negligence on the part of BP.
Because if BP were found to be grossly negligent, the costs for BP of the debacle could rise very significantly indeed, for two reasons.
First, it could potentially add almost $16bn or more than £10bn to the civil penalties BP would have to pay under the US Clean Water Act.
Second, it would make it much harder (perhaps impossible) for BP to recover costs it is incurring in the clean up and restitution from its co-owners of the Macondo Well, Anadarko and Mitsui.
BP says it remains confident that it was not guilty of gross negligence. But if it is wrong, the $39.9bn or £25bn it has set aside to cover the costs stemming from the disaster will prove to be too little.
A further source of uneasiness for BP's shareholders is the statement by the US Attorney General Eric Holder that under the Oil Pollution Act he is intending to prove "that these defendants are responsible for government removal costs, economic losses and environmental damages without limitation."
For once, the verdict of the market in a few minutes may be instructive.
Update 0838: Investors plainly believe that the nature of the Department of Justice's case against BP hasn't increased potential liabilities for the company in a fundamental way.
BP's shares have fallen 2.5% this morning to 465p - which takes the edge off a recent strong run in BP shares.
Source: BBC
www.bbc.co.uk
December 11, 2010
Npower to raise gas and electricity prices by 5%
Customers of energy company Npower will see their gas and electricity bills rise by 5.1% from 4 January.
The change will mean the typical dual-fuel customer with Npower will see their annual bill rise by £54, the firm said.
The announcement comes on the day that British Gas customers started paying more for their energy.
Meanwhile, E.On said it was still monitoring the market but would not raise prices before January.
Wholesale costs
Npower, which said it would leave its social tariff for vulnerable customers unchanged until April 2011, blamed a 50% rise in wholesale prices in the past 12 months for the increase - its first for domestic customers in two years.
"When wholesale costs are driving prices up it is a good time to review the way you manage your energy," said Kevin Miles, chief executive of Npower retail.
The move is the latest in a string of price rise announcements made by the major energy suppliers in the UK.
In the last week of November, Scottish Power increased electricity bills by an average of 8.9% and prices for gas customers increased by an average of 2%.
Scottish and Southern Energy followed by putting up its domestic gas tariffs by 9.4% at the start of December. The 7% rise in gas and electricity bills for British Gas customers has now also kicked in.
EDF Energy said that it was keeping its prices on hold during the winter, with no change before March 2011.
E.On said it was monitoring the wholesale markets before making any decision, but would not raise prices before January.
Future
Earlier this week, the bosses of five of the big six energy companies told a committee of MPs that bills were likely to rise in years to come.
They told the Energy Committee that the "inevitable direction of wholesale prices" meant domestic bills would get more expensive over the next decade.
Prices quoted when bills are changed are an average for customers across the UK. However, issues such as transportation costs mean a different amount can be charged depending on where customers live.
Figures from watchdog Consumer Focus show that people in different parts of the UK - with the same energy supplier - have bills that vary by up to £59 a year.
Reacting to the latest price rises, Audrey Gallacher, head of energy at Consumer Focus, said: "Npower customers will have been bracing themselves for this bad news after the increases from other firms, but that will not make them any less worried about affording their bills this winter.
"With four of the big six suppliers having now announced price rises averaging 6%, the focus on [regulator] Ofgem's review of whether energy prices are justified will be even sharper."
In November, Ofgem announced that it would conduct a review into the domestic energy market after figures showed a sharp rise in suppliers' profit margins to £90 per typical customer.
The change will mean the typical dual-fuel customer with Npower will see their annual bill rise by £54, the firm said.
The announcement comes on the day that British Gas customers started paying more for their energy.
Meanwhile, E.On said it was still monitoring the market but would not raise prices before January.
Wholesale costs
Npower, which said it would leave its social tariff for vulnerable customers unchanged until April 2011, blamed a 50% rise in wholesale prices in the past 12 months for the increase - its first for domestic customers in two years.
"When wholesale costs are driving prices up it is a good time to review the way you manage your energy," said Kevin Miles, chief executive of Npower retail.
The move is the latest in a string of price rise announcements made by the major energy suppliers in the UK.
In the last week of November, Scottish Power increased electricity bills by an average of 8.9% and prices for gas customers increased by an average of 2%.
Scottish and Southern Energy followed by putting up its domestic gas tariffs by 9.4% at the start of December. The 7% rise in gas and electricity bills for British Gas customers has now also kicked in.
EDF Energy said that it was keeping its prices on hold during the winter, with no change before March 2011.
E.On said it was monitoring the wholesale markets before making any decision, but would not raise prices before January.
Future
Earlier this week, the bosses of five of the big six energy companies told a committee of MPs that bills were likely to rise in years to come.
They told the Energy Committee that the "inevitable direction of wholesale prices" meant domestic bills would get more expensive over the next decade.
Prices quoted when bills are changed are an average for customers across the UK. However, issues such as transportation costs mean a different amount can be charged depending on where customers live.
Figures from watchdog Consumer Focus show that people in different parts of the UK - with the same energy supplier - have bills that vary by up to £59 a year.
Reacting to the latest price rises, Audrey Gallacher, head of energy at Consumer Focus, said: "Npower customers will have been bracing themselves for this bad news after the increases from other firms, but that will not make them any less worried about affording their bills this winter.
"With four of the big six suppliers having now announced price rises averaging 6%, the focus on [regulator] Ofgem's review of whether energy prices are justified will be even sharper."
In November, Ofgem announced that it would conduct a review into the domestic energy market after figures showed a sharp rise in suppliers' profit margins to £90 per typical customer.
November 20, 2010
Dell profits more than double on company upgrades
Dell has reported a 144% rise in third quarter net income to $822m (£511m), thanks to falling costs and a post-recession wave of IT upgrades.
Revenues in the three months to September rose 19% from a year ago, driven by corporate orders.
In contrast, the computer manufacturer reported only a 4% rise in takings from consumer clients, as household spending on laptops and PCs remained weak.
The US firm also said profit margins widened on a drop in component prices.
'Muted' consumer demand
"Dell is growing in the right areas, and I'm very excited about out momentum," said the company's founder, chairman and chief executive, Michael Dell, commenting on the company's third quarter results.
Regionally, revenue growth was strongest in the big emerging markets of Brazil, Russia, India and China, which together rose 30% on a year ago, led by India which was up 55%.
Dell said revenues had also been helped partly by its refusal to be drawn into price wars, claiming to have turned down some contracts that would have been insufficiently profitable.
Sales to public sector clients were buoyant - up 20% - despite a recent warning from peer Cisco that its sales to the US government sector would suffer because of fiscal cutbacks.
Dell said that it expected "to see continued strength from the ongoing client refresh among large corporate accounts and strong growth in enterprise products and services".
However, it thought that demand from consumer clients would remain "muted", and expected its full year profits to remain in the mid-range of its previously indicated 14%-19% growth forecast.
Fatter margins
The company's share price rose 4.8% on the results in trading after the official close of the New York markets, reversing much of a 6% drop in the share price following Cisco's warning last week.
While the strong revenue growth was actually slightly weaker than bullish market expectations, Dell also reported a surprisingly strong improvement in its operating profit margins.
The company attributed its stronger margins to lower component costs, as well as improvements in its supply chain.
Dell makes more than half of its revenues from the relatively low-margin PC sales business.
However, this area of business is expected to continue to do well as corporate clients upgrade their IT systems for Microsoft's newest operating system, Windows 7.
Source:
BBC
www.bbc.co.uk
Revenues in the three months to September rose 19% from a year ago, driven by corporate orders.
In contrast, the computer manufacturer reported only a 4% rise in takings from consumer clients, as household spending on laptops and PCs remained weak.
The US firm also said profit margins widened on a drop in component prices.
'Muted' consumer demand
"Dell is growing in the right areas, and I'm very excited about out momentum," said the company's founder, chairman and chief executive, Michael Dell, commenting on the company's third quarter results.
Regionally, revenue growth was strongest in the big emerging markets of Brazil, Russia, India and China, which together rose 30% on a year ago, led by India which was up 55%.
Dell said revenues had also been helped partly by its refusal to be drawn into price wars, claiming to have turned down some contracts that would have been insufficiently profitable.
Sales to public sector clients were buoyant - up 20% - despite a recent warning from peer Cisco that its sales to the US government sector would suffer because of fiscal cutbacks.
Dell said that it expected "to see continued strength from the ongoing client refresh among large corporate accounts and strong growth in enterprise products and services".
However, it thought that demand from consumer clients would remain "muted", and expected its full year profits to remain in the mid-range of its previously indicated 14%-19% growth forecast.
Fatter margins
The company's share price rose 4.8% on the results in trading after the official close of the New York markets, reversing much of a 6% drop in the share price following Cisco's warning last week.
While the strong revenue growth was actually slightly weaker than bullish market expectations, Dell also reported a surprisingly strong improvement in its operating profit margins.
The company attributed its stronger margins to lower component costs, as well as improvements in its supply chain.
Dell makes more than half of its revenues from the relatively low-margin PC sales business.
However, this area of business is expected to continue to do well as corporate clients upgrade their IT systems for Microsoft's newest operating system, Windows 7.
Source:
BBC
www.bbc.co.uk
November 19, 2010
Heinz grows in developing world
Heinz has reported higher-than-expected quarterly profits thanks to strong demand for ketchup and sales growth in developing countries.
The US food manufacturer's net income was $251m (£157m) in the three months to October, up 9% from a year ago.
Sales in developing countries - which represent 15% of the company's business - were up 10%, led by Latin America, while global ketchup sales rose 3.3%.
But revenues fell as the strong dollar depressed the value of foreign sales.
Total revenues were down 1.2% to $2.61bn. But stripping out the effect of the dollar, so-called organic sales were up 0.9%, the company said in its results announcement.
Although the revenue figure fell slightly short of expectations, Heinz's profits still surprised analysts, delivering 78 cents earnings per share, versus expectations of 76 cents.
Heinz is concentrating on growing its developing markets business, and wants the unit to account for 20% of the company's overall sales by 2013.
Meanwhile, its sales in other markets continue to struggle, with sales volumes in North America up 1.6%, while in Europe they rose just 0.7%.
The company was reporting the results for the second quarter of its operating year. It said it was still targeting revenue growth of 3-4% and earnings growth of 7-10% for the year as a whole.
Source: BBC
www.bbc.co.uk
The US food manufacturer's net income was $251m (£157m) in the three months to October, up 9% from a year ago.
Sales in developing countries - which represent 15% of the company's business - were up 10%, led by Latin America, while global ketchup sales rose 3.3%.
But revenues fell as the strong dollar depressed the value of foreign sales.
Total revenues were down 1.2% to $2.61bn. But stripping out the effect of the dollar, so-called organic sales were up 0.9%, the company said in its results announcement.
Although the revenue figure fell slightly short of expectations, Heinz's profits still surprised analysts, delivering 78 cents earnings per share, versus expectations of 76 cents.
Heinz is concentrating on growing its developing markets business, and wants the unit to account for 20% of the company's overall sales by 2013.
Meanwhile, its sales in other markets continue to struggle, with sales volumes in North America up 1.6%, while in Europe they rose just 0.7%.
The company was reporting the results for the second quarter of its operating year. It said it was still targeting revenue growth of 3-4% and earnings growth of 7-10% for the year as a whole.
Source: BBC
www.bbc.co.uk
November 18, 2010
BP board to exert tougher control
(FT) -- BP's board will tighten its oversight of the company's day-to-day operations in the wake of the Gulf of Mexico oil spill, its chairman has said in his first big interview since the accident.
Carl-Henric Svanberg, appointed chairman in January, said he did not consider resigning following the oil spill in April, in spite of criticism from some investors for not taking a more public role at the height of the crisis.
He said he had formed an early impression, "coming from the outside . . . how much was delegated to the executive" at BP.
"One of the key changes after the tragedy is that this is a time when logically you can review that delegation," he told the Financial Times. "We will have a higher degree of disclosure and a higher degree of discussion going forward than we have seen in the past between the executive and the board."
BP's executive team was seen as extremely powerful within the organisation, according to other industry executives. Shareholders also believe the company needed to strengthen the board in the wake of the disaster.
"If the view is that [former chief executive] Tony [Hayward] has borne the responsibility that the safety culture had not improved sufficiently, then the board was perhaps not probing enough and further change is probably still required," one UK investor in BP said.
Mr Svanberg said he and Bob Dudley, who took over as chief executive from Mr Hayward in October, were "eager to see if the board can be even more effective".
"We need to ensure that the checks and balances remain good with strong oversight and disclosure, particularly in safety," he said.
Mr Svanberg has appointed two new non-executive directors in recent weeks, Brendan Nelson and Frank L. "Skip" Bowman. Mr Nelson will succeed Douglas Flint as chairman of BP's audit committee when Mr Flint retires next year. Mr Bowman will replace DeAnne Julius, who is due to step down next year as well. BP is looking for one or two additional directors. Byron Grote, its long-serving finance director, has agreed to stay on "for a little bit longer", Mr Svanberg said.
The accident on April 20 has battered BP's reputation. One of Mr Svanberg's few moments of public exposure was an unfortunate gaffe when he said "we care about the small people" following a deal to set up a $20bn compensation fund.
Mr Svanberg defended his mostly behind-the-scenes role, saying having two spokesmen would not have helped resolve the crisis.
The focus of the board is now on "rebuilding trust and safeguarding our licence to operate -- that is what this is all about", he said.
Source: CNN
www.cnn.com
Carl-Henric Svanberg, appointed chairman in January, said he did not consider resigning following the oil spill in April, in spite of criticism from some investors for not taking a more public role at the height of the crisis.
He said he had formed an early impression, "coming from the outside . . . how much was delegated to the executive" at BP.
"One of the key changes after the tragedy is that this is a time when logically you can review that delegation," he told the Financial Times. "We will have a higher degree of disclosure and a higher degree of discussion going forward than we have seen in the past between the executive and the board."
BP's executive team was seen as extremely powerful within the organisation, according to other industry executives. Shareholders also believe the company needed to strengthen the board in the wake of the disaster.
"If the view is that [former chief executive] Tony [Hayward] has borne the responsibility that the safety culture had not improved sufficiently, then the board was perhaps not probing enough and further change is probably still required," one UK investor in BP said.
Mr Svanberg said he and Bob Dudley, who took over as chief executive from Mr Hayward in October, were "eager to see if the board can be even more effective".
"We need to ensure that the checks and balances remain good with strong oversight and disclosure, particularly in safety," he said.
Mr Svanberg has appointed two new non-executive directors in recent weeks, Brendan Nelson and Frank L. "Skip" Bowman. Mr Nelson will succeed Douglas Flint as chairman of BP's audit committee when Mr Flint retires next year. Mr Bowman will replace DeAnne Julius, who is due to step down next year as well. BP is looking for one or two additional directors. Byron Grote, its long-serving finance director, has agreed to stay on "for a little bit longer", Mr Svanberg said.
The accident on April 20 has battered BP's reputation. One of Mr Svanberg's few moments of public exposure was an unfortunate gaffe when he said "we care about the small people" following a deal to set up a $20bn compensation fund.
Mr Svanberg defended his mostly behind-the-scenes role, saying having two spokesmen would not have helped resolve the crisis.
The focus of the board is now on "rebuilding trust and safeguarding our licence to operate -- that is what this is all about", he said.
Source: CNN
www.cnn.com
November 14, 2010
Holiday camp firm Pontin's goes into administration
Holiday camp company Pontin's has been placed into administration, the accountancy firm KPMG has said.
The company runs five parks, all of which will keep trading as normal, KPMG added. No redundancies have been made among Pontin's 850 staff.
In February 2009 Pontin's announced a £50m plan to redevelop its centres and create 2,000 jobs but eventually closed Blackpool Park, in Lancashire.
KPMG said it was optimistic the "iconic British brand" still had a future.
'Strong business'
Pontin's chairman Graham Parr said the business was profitable but had been a victim of the credit crunch and had gone into administration because its bank had withdrawn its support.
"The business is strong, it's going really well - we have 3,000 holidaymakers staying with us this weekend," he said.
"But the bank has simply said it is not prepared to support our credit facilities any more. It's very annoying and the most nonsensical business situation I have ever been involved in."
Mr Parr, who has been involved with Pontin's on and off since the 1960s, said he and his partners fully intended to "get back in [to the business] and get it sorted."
Meanwhile, sources have told the BBC that it was the owners of Pontin's and not its bank which placed the company into administration.
BBC business correspondent Joe Lynam said it is understood that Santander had provided a year-long credit facility to Pontin's to allow it time to find a new buyer or further sources of money.
The company had suffered in a very competitive market place, with operators such as Butlins and Havens more successful in taking advantage of UK holidaymakers' desire for budget getaways during the downturn, he said.
Former Pontin's employee Warren Cooper, from Lowestoft, Suffolk, said he was not surprised the company had been placed into administration because there were "less and less customers" over the period he worked at the centre in Pakefield.
Mrs Janette Sellick, from East Ham, London, told the BBC she was worried because she had just paid for her family's Christmas holiday.
"I've been going every Christmas for 32 years and all my family goes too.
"My sister's panicking. I am upset because the cheque has only just cleared from the bank for around £2,200," she said.
But the administrators say they are planning to find an "experienced leisure operator" to help them run the company until a buyer can be found and all reservations will be honoured.
Joint administrator Jane Moriarty said: "Pontin's is an iconic British brand which forms the backdrop to thousands of treasured family holiday memories.
"It has unfortunately struggled in the current economic environment but, with some support from new management, we are optimistic that it will be part of thousands of family memories in the years to come."
Pontin's, known for its Bluecoats entertainers, was established in 1946 and at its height owned more than 30 parks. It was founded by Fred Pontin, who was well ahead of his rivals when he spotted the trend for self-catering holiday villages.
It was bought by Oceans Park for £46m in 2008.
The five sites left are at Brean Sands, in Somerset; Camber Sands, in Sussex; Pakefield, in Suffolk; Prestatyn Sands, in Denbighshire; and Southport, in Merseyside.
Source: BBC
www.bbc.co.uk
The company runs five parks, all of which will keep trading as normal, KPMG added. No redundancies have been made among Pontin's 850 staff.
In February 2009 Pontin's announced a £50m plan to redevelop its centres and create 2,000 jobs but eventually closed Blackpool Park, in Lancashire.
KPMG said it was optimistic the "iconic British brand" still had a future.
'Strong business'
Pontin's chairman Graham Parr said the business was profitable but had been a victim of the credit crunch and had gone into administration because its bank had withdrawn its support.
"The business is strong, it's going really well - we have 3,000 holidaymakers staying with us this weekend," he said.
"But the bank has simply said it is not prepared to support our credit facilities any more. It's very annoying and the most nonsensical business situation I have ever been involved in."
Mr Parr, who has been involved with Pontin's on and off since the 1960s, said he and his partners fully intended to "get back in [to the business] and get it sorted."
Meanwhile, sources have told the BBC that it was the owners of Pontin's and not its bank which placed the company into administration.
BBC business correspondent Joe Lynam said it is understood that Santander had provided a year-long credit facility to Pontin's to allow it time to find a new buyer or further sources of money.
The company had suffered in a very competitive market place, with operators such as Butlins and Havens more successful in taking advantage of UK holidaymakers' desire for budget getaways during the downturn, he said.
Former Pontin's employee Warren Cooper, from Lowestoft, Suffolk, said he was not surprised the company had been placed into administration because there were "less and less customers" over the period he worked at the centre in Pakefield.
Mrs Janette Sellick, from East Ham, London, told the BBC she was worried because she had just paid for her family's Christmas holiday.
"I've been going every Christmas for 32 years and all my family goes too.
"My sister's panicking. I am upset because the cheque has only just cleared from the bank for around £2,200," she said.
But the administrators say they are planning to find an "experienced leisure operator" to help them run the company until a buyer can be found and all reservations will be honoured.
Joint administrator Jane Moriarty said: "Pontin's is an iconic British brand which forms the backdrop to thousands of treasured family holiday memories.
"It has unfortunately struggled in the current economic environment but, with some support from new management, we are optimistic that it will be part of thousands of family memories in the years to come."
Pontin's, known for its Bluecoats entertainers, was established in 1946 and at its height owned more than 30 parks. It was founded by Fred Pontin, who was well ahead of his rivals when he spotted the trend for self-catering holiday villages.
It was bought by Oceans Park for £46m in 2008.
The five sites left are at Brean Sands, in Somerset; Camber Sands, in Sussex; Pakefield, in Suffolk; Prestatyn Sands, in Denbighshire; and Southport, in Merseyside.
Source: BBC
www.bbc.co.uk
November 12, 2010
Rolls-Royce: Plane engine failed because of oil fire
(CNN) -- Rolls-Royce said Friday that the failure of a specific component of its Trent 900 engine caused an oil fire that then forced a Qantas A380 to make an emergency landing.
"The failure was confined to a specific component in the turbine area of the engine," the engine maker said. "This caused an oil fire, which led to the release of the intermediate pressure turbine disc. "
The incident will cause the company's full year profit growth to be slightly lower than "guided," Rolls-Royce said Friday. In July, the company had predicted its underlying profits would grow between four and five percent compared to 2009.
On Monday, Qantas CEO Alan Joyce told reporters the planes will not return to service until the airline is "100 percent sure" about their safety.
Oil leaks have been discovered in engines on three planes, and investigations continue, Joyce added. The leaks were beyond normal tolerances, he said.
On November 4, a Qantas flight was forced to return to Singapore's Changi Airport after one of its engines shut down and the engine's covering, or cowling, tore off above the western Indonesian island of Batam.
The Australia-bound flight was carrying 440 passengers and 26 crew members.
By the CNN Wire Staff
Source: CNN
www.cnn.com
"The failure was confined to a specific component in the turbine area of the engine," the engine maker said. "This caused an oil fire, which led to the release of the intermediate pressure turbine disc. "
The incident will cause the company's full year profit growth to be slightly lower than "guided," Rolls-Royce said Friday. In July, the company had predicted its underlying profits would grow between four and five percent compared to 2009.
On Monday, Qantas CEO Alan Joyce told reporters the planes will not return to service until the airline is "100 percent sure" about their safety.
Oil leaks have been discovered in engines on three planes, and investigations continue, Joyce added. The leaks were beyond normal tolerances, he said.
On November 4, a Qantas flight was forced to return to Singapore's Changi Airport after one of its engines shut down and the engine's covering, or cowling, tore off above the western Indonesian island of Batam.
The Australia-bound flight was carrying 440 passengers and 26 crew members.
By the CNN Wire Staff
Source: CNN
www.cnn.com
November 08, 2010
Chrysler ups profit forecast as market share recovers
US carmaker Chrysler has raised its annual profit forecast to $700m (£435m), after third-quarter results showed market share recovering.
The US carmaker previously expected to make only $200m in the current year.
Chrysler made a loss of $84m during the past three months, down by half from a $172m loss in the previous quarter.
Total revenues rose 5% to $11bn, helped by a 40% jump in sales for its new Jeep Grand Cherokee, pushing its US market share up to 9.6%.
At the time of its bankruptcy its market shares had been 7%.
"We are committed to ensuring that every new vehicle this company launches has the same high quality and technological advances as the Jeep Grand Cherokee," said the company's chief executive, Sergio Marchionne, commenting on the financial results.
Management of Chrysler was taken over by Fiat of Italy last year after the US company entered government-sponsored bankruptcy.
Fiat is helping the US company to bring a range of new cars to the US market over the coming months.
"Our 2010 accomplishments are just the beginning of building Chrysler Group into a vibrant and competitive automaker," added Mr Marchionne.
Source:BBC
www.bbc.com
The US carmaker previously expected to make only $200m in the current year.
Chrysler made a loss of $84m during the past three months, down by half from a $172m loss in the previous quarter.
Total revenues rose 5% to $11bn, helped by a 40% jump in sales for its new Jeep Grand Cherokee, pushing its US market share up to 9.6%.
At the time of its bankruptcy its market shares had been 7%.
"We are committed to ensuring that every new vehicle this company launches has the same high quality and technological advances as the Jeep Grand Cherokee," said the company's chief executive, Sergio Marchionne, commenting on the financial results.
Management of Chrysler was taken over by Fiat of Italy last year after the US company entered government-sponsored bankruptcy.
Fiat is helping the US company to bring a range of new cars to the US market over the coming months.
"Our 2010 accomplishments are just the beginning of building Chrysler Group into a vibrant and competitive automaker," added Mr Marchionne.
Source:BBC
www.bbc.com
November 07, 2010
Microsoft boss Steve Ballmer in sale of shares
Microsoft chief executive Steve Ballmer has sold $1.3bn (£800m) worth of shares in the firm, the first time he has sold its stock in seven years.
"Even though this is a personal financial matter, I want to be clear about this to avoid any confusion," Mr Ballmer said in a statement.
Mr Ballmer said he was "fully committed to Microsoft and its success".
According to SEC filings he sold 49.3 million Microsoft shares at prices between $26 and $28 per share.
Sell-off continues
Mr Ballmer still holds 359 million shares, worth $9.6bn at Microsoft's current share price, which closed down 1.36% at $26.77 in US trading on Friday.
He said the sale of shares was made to diversify his investments and help his year-end tax planning.
His statement, published on Microsoft's website, also says that he hopes to "sell up to 75 million shares by year-end".
Microsoft's share price has been hit this year as investors worry about its ability to adapt to new ways of computing.
However, last month the firm announced a 51% rise in first-quarter profit, thanks to higher sales of its flagship Windows and Office software.
"Even though this is a personal financial matter, I want to be clear about this to avoid any confusion," Mr Ballmer said in a statement.
Mr Ballmer said he was "fully committed to Microsoft and its success".
According to SEC filings he sold 49.3 million Microsoft shares at prices between $26 and $28 per share.
Sell-off continues
Mr Ballmer still holds 359 million shares, worth $9.6bn at Microsoft's current share price, which closed down 1.36% at $26.77 in US trading on Friday.
He said the sale of shares was made to diversify his investments and help his year-end tax planning.
His statement, published on Microsoft's website, also says that he hopes to "sell up to 75 million shares by year-end".
Microsoft's share price has been hit this year as investors worry about its ability to adapt to new ways of computing.
However, last month the firm announced a 51% rise in first-quarter profit, thanks to higher sales of its flagship Windows and Office software.
November 05, 2010
Toyota profits continue to soar despite the strong yen
Profits at Japanese carmaker Toyota have continued to soar, with second quarter earnings nearly doubling to 98.7bn yen.
The company raised its profit forecast again, predicting earnings of 380bn yen ($4.7bn, £2.9bn) for the full year.
Executive vice president Satoshi Ozawa warned the strong yen was putting "production levels" in Japan at risk.
Sales were also boosted by green car subsidies in Japan, but these have now come to an end.
Mr Ozawa spoke of a continued "very tough business environment, characterised by the radically and seriously appreciated yen in recent months, the risk of slowdown in demand recovery in the United States and Europe, and falling demand following the end of the eco-car subsidies in Japan."
Source:BBC
www.bbc.com
The company raised its profit forecast again, predicting earnings of 380bn yen ($4.7bn, £2.9bn) for the full year.
Executive vice president Satoshi Ozawa warned the strong yen was putting "production levels" in Japan at risk.
Sales were also boosted by green car subsidies in Japan, but these have now come to an end.
Mr Ozawa spoke of a continued "very tough business environment, characterised by the radically and seriously appreciated yen in recent months, the risk of slowdown in demand recovery in the United States and Europe, and falling demand following the end of the eco-car subsidies in Japan."
Source:BBC
www.bbc.com
November 04, 2010
Nissan profits boosted by strong sales
Japanese carmaker Nissan has announced a fourfold rise in quarterly profits and raised its full-year forecasts.
Nissan reported a second-quarter net profit of 101.73bn yen ($1.26bn; £775m), up from 25.53bn yen a year ago, with sales up 21.4%.
It also raised its full-year profit forecast to 270bn yen from 150bn yen.
"Our first-half results demonstrate that Nissan's recovery efforts are working effectively," said Nissan chief executive Carlos Ghosn.
Nissan announced 20,000 job cuts at the height of the financial crisis.
The increase in sales outweighed the impact of the strengthening yen, which has dented the post financial crisis revival for some Japanese companies.
Source: BBC
www.bbc.co.uk
Nissan reported a second-quarter net profit of 101.73bn yen ($1.26bn; £775m), up from 25.53bn yen a year ago, with sales up 21.4%.
It also raised its full-year profit forecast to 270bn yen from 150bn yen.
"Our first-half results demonstrate that Nissan's recovery efforts are working effectively," said Nissan chief executive Carlos Ghosn.
Nissan announced 20,000 job cuts at the height of the financial crisis.
The increase in sales outweighed the impact of the strengthening yen, which has dented the post financial crisis revival for some Japanese companies.
Source: BBC
www.bbc.co.uk
November 03, 2010
Google in 'significant breach' of UK data laws
There was a "significant breach" of the Data Protection Act when Google collected personal data via its Street View cars, the UK's Information Commissioner has ruled.
But Google will not face a fine or any punishment, Christopher Graham added.
But Google will not face a fine or any punishment, Christopher Graham added.
BMW's profits boosted by strong Chinese sales
BMW's third quarter profits have risen 11-fold as it continues to benefit from a big increase in sales in China.
The German carmaker made a net profit of 874m euros ($1.2bn; £765m) in the three months to the end of September, up from just 78m euros a year earlier.
Its revenues rose 36% to 15.9bn euros, as global quarterly sales of its BMW, Rolls-Royce and Mini cars increased by 13% to 366,190 vehicles.
BMW said its Chinese sales almost doubled compared with a year earlier.
Its sales across mainland China, Hong Kong and Taiwan were 91% higher.
Sales in Western Europe added 1.8%, while those in the UK gained 13%.
In the US BMW saw quarterly sales advance by 9%.
BMW did not release a specific figure for India, only saying that the wider Indian car market had grown by 30% so far this year.
It added that its global profits had also been helped by higher retail prices.
The German carmaker made a net profit of 874m euros ($1.2bn; £765m) in the three months to the end of September, up from just 78m euros a year earlier.
Its revenues rose 36% to 15.9bn euros, as global quarterly sales of its BMW, Rolls-Royce and Mini cars increased by 13% to 366,190 vehicles.
BMW said its Chinese sales almost doubled compared with a year earlier.
Its sales across mainland China, Hong Kong and Taiwan were 91% higher.
Sales in Western Europe added 1.8%, while those in the UK gained 13%.
In the US BMW saw quarterly sales advance by 9%.
BMW did not release a specific figure for India, only saying that the wider Indian car market had grown by 30% so far this year.
It added that its global profits had also been helped by higher retail prices.
Toyota unveils a sporty Prius
NEW YORK -- Performance and fuel-efficiency are not usually words you hear in the same sentence. But who says hybrids can't be sporty?
Toyota said Tuesday that it will unveil the Prius PLUS Performance Package, a hybrid performance line developed by the automaker's racing division, at a car show in Las Vegas this week.
The tricked-out version of Toyota's popular gasoline-electric powered car will be available in limited production starting in April 2011. Toyota expects to have more information on pricing closer to the official launch date, according to spokesman Greg Thome.
While there are no changes to the car's powertrain, the package comes with a number of external features designed to make the Prius look more sleek and speedy.
Drivers will be able to have their Prius outfitted with a seven-piece body kit that has a "uniquely styled rear diffuser," as well as front and rear bumper spoilers and a side skirt.
The Prius PLUS is also lower than the standard version, with "sport-tuned lowering springs" and a rear "sway bar" to improve handling. In addition, the performance Prius has 17-inch forged wheels with low profile tires.
Toyota (TM) said the car will come replete with "exclusive floormats" and an exterior badge with the "PLUS" logo.
The package was developed to meet the "evolving demands of the growing hybrid segment," Toyota said in a press release. But it may also be designed to lure drivers that are wary of hybrid cars, which are often seen as less muscular than gas powered ones.
Toyota announces 6 new hybrids, electric cars
Despite the added weight from the body kit and other features, Toyota said the modifications will not impact the Prius' gas mileage.
"The end result is a more fun-to-drive, performance-enhanced Prius that maintains its industry-leading fuel efficiency," the automaker said.
Source: CNNMoney.com
Toyota said Tuesday that it will unveil the Prius PLUS Performance Package, a hybrid performance line developed by the automaker's racing division, at a car show in Las Vegas this week.
The tricked-out version of Toyota's popular gasoline-electric powered car will be available in limited production starting in April 2011. Toyota expects to have more information on pricing closer to the official launch date, according to spokesman Greg Thome.
While there are no changes to the car's powertrain, the package comes with a number of external features designed to make the Prius look more sleek and speedy.
Drivers will be able to have their Prius outfitted with a seven-piece body kit that has a "uniquely styled rear diffuser," as well as front and rear bumper spoilers and a side skirt.
The Prius PLUS is also lower than the standard version, with "sport-tuned lowering springs" and a rear "sway bar" to improve handling. In addition, the performance Prius has 17-inch forged wheels with low profile tires.
Toyota (TM) said the car will come replete with "exclusive floormats" and an exterior badge with the "PLUS" logo.
The package was developed to meet the "evolving demands of the growing hybrid segment," Toyota said in a press release. But it may also be designed to lure drivers that are wary of hybrid cars, which are often seen as less muscular than gas powered ones.
Toyota announces 6 new hybrids, electric cars
Despite the added weight from the body kit and other features, Toyota said the modifications will not impact the Prius' gas mileage.
"The end result is a more fun-to-drive, performance-enhanced Prius that maintains its industry-leading fuel efficiency," the automaker said.
Source: CNNMoney.com
October 26, 2010
Ford posts record profit
NEW YORK (CNNMoney.com) -- Ford Motor reported record third-quarter net income Tuesday, far exceeding analyst expectations and continuing a surge in momentum for the recovering automaker.
Dearborn, Mich.-based Ford (F, Fortune 500) posted net income of $1.7 billion, or 43 cents per share, up from $997 million, or 29 cents a share, a year earlier. Analysts surveyed by Thomson Reuters expected Ford to report a 38-cent-a-share profit.
Ford's previous best third-quarter net income was $1.1 billion reported in 1997.
The automaker cited a strong product line, momentum in North America and continued success at Ford Credit as areas of growth.
"It's been the same story all year long," said David Whiston, an automotive analyst at Morningstar. "Better pricing in North America, and that offsets the small losses in Europe. The North American market is a real earnings driver."
Ford also announced plans to further strengthen its balance sheet by paying down its revolving credit line by $2 billion and prepay the remaining $3.6 billion in debt owed to a retiree health care trust.
"Ford sales continue to surge due to a stronger product lineup and improved consumer image," said Jesse Toprak, vice president of auto trends at TrueCar.com, in a statement. "Their retail sales are strong and transaction prices have been increasing this year, contributing to an improved bottom-line for the automaker."
Shares of Ford were flat in Tuesday trading, rebounding from a loss of about 1% earlier in the session. The automaker's stock has soared seven fold since February 2009 when it fell below $2 a share.
At the time, there were serious fears that it could follow General Motors and Chrysler down the road to bankruptcy and restructuring.
Ford avoided that fate, but its success left it with far more debt on its balance sheet than either GM or Chrysler, which used their bankruptcies and bailout billions to shed debt.
Now that Ford is once again turning a profit, it is using the surplus cash to pay down its debt, which will result in lower interest payments and eventually an improved credit rating.
"We are clearly ahead of where we thought we could be on improving our balance sheet, repaying our loans, and it's a very positive development," CEO Alan Mulally said during a conference call for investors.
Ford's debt will be reduced by $10.8 billion this year, Mulally said, which should result in savings of $800 million in annualized interest payments.
Ford's profitability has been accompanied by gains in market share. In the third quarter, Ford gained 1.4% in U.S. sales market share, while GM lost ground. And for the year, Ford is ahead of rival Toyota in U.S. sales.
The third quarter is typically weak for automakers as they discount and clear old inventory to make room for new models.
Ford expressed belief that the winning streak will continue, expecting increases in both cash flow and profitability in 2011.
"The key drivers for improvement in 2011 will be our growing product strength, a gradually strengthening economy and an unrelenting focus on improving the competitiveness of all our operations," Mulally said in a statement.
But the automaker noted that fourth-quarter profit expectations are lower than previous quarters due to depreciation expenses on leased vehicles and smaller improvements in the provision for credit losses.
On Monday, Ford said it will create up to 1,200 jobs in the distressed state of Michigan as it ramps up engineering and manufacturing operations to produce more fuel-efficient cars.
Source: www.cnn.com
Dearborn, Mich.-based Ford (F, Fortune 500) posted net income of $1.7 billion, or 43 cents per share, up from $997 million, or 29 cents a share, a year earlier. Analysts surveyed by Thomson Reuters expected Ford to report a 38-cent-a-share profit.
Ford's previous best third-quarter net income was $1.1 billion reported in 1997.
The automaker cited a strong product line, momentum in North America and continued success at Ford Credit as areas of growth.
"It's been the same story all year long," said David Whiston, an automotive analyst at Morningstar. "Better pricing in North America, and that offsets the small losses in Europe. The North American market is a real earnings driver."
Ford also announced plans to further strengthen its balance sheet by paying down its revolving credit line by $2 billion and prepay the remaining $3.6 billion in debt owed to a retiree health care trust.
"Ford sales continue to surge due to a stronger product lineup and improved consumer image," said Jesse Toprak, vice president of auto trends at TrueCar.com, in a statement. "Their retail sales are strong and transaction prices have been increasing this year, contributing to an improved bottom-line for the automaker."
Shares of Ford were flat in Tuesday trading, rebounding from a loss of about 1% earlier in the session. The automaker's stock has soared seven fold since February 2009 when it fell below $2 a share.
At the time, there were serious fears that it could follow General Motors and Chrysler down the road to bankruptcy and restructuring.
Ford avoided that fate, but its success left it with far more debt on its balance sheet than either GM or Chrysler, which used their bankruptcies and bailout billions to shed debt.
Now that Ford is once again turning a profit, it is using the surplus cash to pay down its debt, which will result in lower interest payments and eventually an improved credit rating.
"We are clearly ahead of where we thought we could be on improving our balance sheet, repaying our loans, and it's a very positive development," CEO Alan Mulally said during a conference call for investors.
Ford's debt will be reduced by $10.8 billion this year, Mulally said, which should result in savings of $800 million in annualized interest payments.
Ford's profitability has been accompanied by gains in market share. In the third quarter, Ford gained 1.4% in U.S. sales market share, while GM lost ground. And for the year, Ford is ahead of rival Toyota in U.S. sales.
The third quarter is typically weak for automakers as they discount and clear old inventory to make room for new models.
Ford expressed belief that the winning streak will continue, expecting increases in both cash flow and profitability in 2011.
"The key drivers for improvement in 2011 will be our growing product strength, a gradually strengthening economy and an unrelenting focus on improving the competitiveness of all our operations," Mulally said in a statement.
But the automaker noted that fourth-quarter profit expectations are lower than previous quarters due to depreciation expenses on leased vehicles and smaller improvements in the provision for credit losses.
On Monday, Ford said it will create up to 1,200 jobs in the distressed state of Michigan as it ramps up engineering and manufacturing operations to produce more fuel-efficient cars.
Source: www.cnn.com
BP sets out to rebuild reputation
By Jorn Madslien
Business reporter, BBC News, CBI annual conference
UK energy giant BP has outlined a strategy to revive the public's belief in its ability to operate in a responsible manner.
"We will earn back trust in BP and begin to restore the company's battered reputation," chief executive Bob Dudley told business leaders in London.
His comments came in his first external speech since taking the helm of BP.
Six months ago, the Deepwater Horizon rig exploded, causing a massive oil spill in the Gulf of Mexico.
Action taken
Central to attempts to rebuild BP's reputation is the story about its efforts following the leak, Mr Dudley believes.
"The first thing to say is that we have stopped the leak and made huge progress in cleaning up the spill," Mr Dudley said.
"Second, our containment and clean-up efforts have gotten results.
"Third, we are meeting our commitments as a responsible party of this accident."
Mr Dudley insisted BP was "committed to learning the lessons from these shattering events at all levels".
Some of the new knowledge would come from "other hazardous industries, including nuclear and chemicals industries", he said.
The lessons learned, which also included new ways of managing third-party contractors, would be applied across the group's global business, aided by a new safety division that will oversee these efforts.
Deepwater drilling
Mr Dudley was also eager to stress that BP was "part of the American community", and that rather than pull out of the US, the company would get more deeply involved.
After all, he said, BP was the largest producer of oil and gas in the US as well as a major employer, with 23,000 people on its payroll.
"I did not become chief executive of BP in order to walk away from the US. BP will not be quitting America," he said.
BP could soon be back drilling in deep waters off the US coast, after Washington lifted a temporary moratorium, not least because the world will need more oil and gas, he reasoned.
"The deep waters are becoming an increasingly important source of energy to fuel the global economy," Mr Dudley said.
"And we are one of only a handful of companies with the financial and technological strength to undertake development projects in these difficult geographies."
BP's return may be controversial in the US, where many are still angry about the Gulf accident, but Mr Dudley is eager to reassure the American people.
"It can be done safely," Mr Dudley said.
"A silver lining of the event is the significant and sustained advance in industry preparedness that will now exist going forward, [including] the learnings and the equipment and techniques invested by necessity under pressure to contain the oil and stop the well."
Source: bc.co.uk
Business reporter, BBC News, CBI annual conference
UK energy giant BP has outlined a strategy to revive the public's belief in its ability to operate in a responsible manner.
"We will earn back trust in BP and begin to restore the company's battered reputation," chief executive Bob Dudley told business leaders in London.
His comments came in his first external speech since taking the helm of BP.
Six months ago, the Deepwater Horizon rig exploded, causing a massive oil spill in the Gulf of Mexico.
Action taken
Central to attempts to rebuild BP's reputation is the story about its efforts following the leak, Mr Dudley believes.
"The first thing to say is that we have stopped the leak and made huge progress in cleaning up the spill," Mr Dudley said.
"Second, our containment and clean-up efforts have gotten results.
"Third, we are meeting our commitments as a responsible party of this accident."
Mr Dudley insisted BP was "committed to learning the lessons from these shattering events at all levels".
Some of the new knowledge would come from "other hazardous industries, including nuclear and chemicals industries", he said.
The lessons learned, which also included new ways of managing third-party contractors, would be applied across the group's global business, aided by a new safety division that will oversee these efforts.
Deepwater drilling
Mr Dudley was also eager to stress that BP was "part of the American community", and that rather than pull out of the US, the company would get more deeply involved.
After all, he said, BP was the largest producer of oil and gas in the US as well as a major employer, with 23,000 people on its payroll.
"I did not become chief executive of BP in order to walk away from the US. BP will not be quitting America," he said.
BP could soon be back drilling in deep waters off the US coast, after Washington lifted a temporary moratorium, not least because the world will need more oil and gas, he reasoned.
"The deep waters are becoming an increasingly important source of energy to fuel the global economy," Mr Dudley said.
"And we are one of only a handful of companies with the financial and technological strength to undertake development projects in these difficult geographies."
BP's return may be controversial in the US, where many are still angry about the Gulf accident, but Mr Dudley is eager to reassure the American people.
"It can be done safely," Mr Dudley said.
"A silver lining of the event is the significant and sustained advance in industry preparedness that will now exist going forward, [including] the learnings and the equipment and techniques invested by necessity under pressure to contain the oil and stop the well."
Source: bc.co.uk
October 25, 2010
Honda recalling nearly half a million cars
By Aaron Smith, staff writer
NEW YORK (CNNMoney.com) -- Honda has announced a recall of nearly half a million vehicles with brake problems, just days after Toyota announced a similar recall.
The U.S. division of the Japanese automaker Honda Motor Co (HMC). said it was recalling 471,820 Odysseys and Acura RLs, made from 2005 to 2007, due to concerns of possible degradation to the brake systems.
The automaker said it was concerned about the use of non-Honda branded brake fluid. Honda said that its own brake fluid contains polymers that act as lubricants. The use of non-Honda brake fluid could cause a rubber seal in the brake master cylinder to dry out, possibly resulting in a fluid leak, the company said.
"A leak of brake fluid could lead to a change in brake fluid feel and, overtime, a degradation in braking performance, increasing the risk of a crash," said Honda, in its recall notice.
On Oct. 21, Toyota Motor Sales, the U.S. division of Toyota Motor Corp (TM)., said that it is recalling 740,000 vehicles with potentially unsafe brakes. Toyota's description of the problem was very similar to Honda's. Last week, Honda said it would be making a recall announcement similar to Toyota's.
The Toyota recall applied to Avalon models built from 2005 through 2006, non-hybrid Highlanders from 2004 through 2006, the Lexus RX330, and 2006 models of the Lexus GS300, IS250 and IS350.
Source: cnn.com
NEW YORK (CNNMoney.com) -- Honda has announced a recall of nearly half a million vehicles with brake problems, just days after Toyota announced a similar recall.
The U.S. division of the Japanese automaker Honda Motor Co (HMC). said it was recalling 471,820 Odysseys and Acura RLs, made from 2005 to 2007, due to concerns of possible degradation to the brake systems.
The automaker said it was concerned about the use of non-Honda branded brake fluid. Honda said that its own brake fluid contains polymers that act as lubricants. The use of non-Honda brake fluid could cause a rubber seal in the brake master cylinder to dry out, possibly resulting in a fluid leak, the company said.
"A leak of brake fluid could lead to a change in brake fluid feel and, overtime, a degradation in braking performance, increasing the risk of a crash," said Honda, in its recall notice.
On Oct. 21, Toyota Motor Sales, the U.S. division of Toyota Motor Corp (TM)., said that it is recalling 740,000 vehicles with potentially unsafe brakes. Toyota's description of the problem was very similar to Honda's. Last week, Honda said it would be making a recall announcement similar to Toyota's.
The Toyota recall applied to Avalon models built from 2005 through 2006, non-hybrid Highlanders from 2004 through 2006, the Lexus RX330, and 2006 models of the Lexus GS300, IS250 and IS350.
Source: cnn.com
October 22, 2010
How safe are Chile's copper mines?
The accident at the San Jose mine, where 33 men remained trapped underground, is a reminder that digging for copper in Chile can be a dangerous business, particularly when the price of the metal is high.
Chile produces a third of all the copper in the world. The country's economic welfare is heavily dependent on exports of the metal to Europe, the US and, increasingly, India and China.
When the copper price is low, multi-national companies like BHP Billiton, Anglo American and Xstrata - along with Chile's state-owned mining giant Codelco - account for the lion's share of production, because they are big enough to ride out the depressed prices.
But when the price is high, as it has been in recent years, smaller companies enter the market too. Speculative part-time miners - some with only limited experience - head out into the Atacama Desert and the foothills of the Andes.
Mines that had long since closed because they could no longer turn a profit suddenly find that they can. They reopen, often with no better safety standards than those in place on the day they closed.
The mine at San Jose is owned by San Esteban, a medium-sized mining company which is now being sued by families of some of the miners trapped underground, who claim the company failed to make safety improvements despite three deaths at its mines over six years, and dozens of accidents.
They are also suing Sernageomin, the state regulator of mines, for allowing the company to reopen in 2008 following its closure a year earlier over a death.
"There is undoubtedly a link between the price of metal and the number of people operating in the business, particularly in the small and medium-sized mines," said Miguel Angel Duran, president of Chile's Mining Council, which represents 16 of the biggest mining companies operating in Chile.
In 2007 and 2008, at the height of the boom in copper prices, there were more deaths in Chilean mines than in any other years during the decade. In 2007, when the copper price averaged a record $3.24 per lb, 40 miners died in accidents. In 2008, when copper was at $2.88 per lb, the death toll hit 43. The average for the decade was 34.
In contrast, the safest year in the history of Chilean mining was 1999, when the average copper price fell to just 72 cents, its lowest level in over 10 years, a consequence of the Asian crisis.
For the industry's smaller players, whose safety standards tend to be the poorest, there was simply no incentive to mine copper.
"It shouldn't be the case that when the price rises, the number of accidents rises too," said Andy King, national co-ordinator for health and safety at the massive North American trade union, United Steelworkers.
"In fact, the opposite should be the case," said Mr King, who visited the San Jose mine last month and has been deeply critical of safety standards at Chilean mines. "The higher the price of the metal, the safer the mine should be, because the company has more funds to improve safety."
Despite the fluctuations in both the price of copper and the number of accidents, the long-term trend is positive. There are far fewer serious accidents at Chilean mines than in the past.
The National Geology and Mining Service (Sernageomin), the state body tasked with regulating the industry, says there was an average of 0.41 deaths in Chilean mines for every one million hours worked during the 1980s. By the 1990s that figure had dropped to 0.28 and by the past decade to 0.13.
Figures from Chile's Department of Social Security suggest that mining is among the safest industries in the country.
Last year, there were 2.2 accidents in Chile's mines for every 100 workers, compared to 5.7 in the construction industry and 7.2 in agriculture and fishing. That is largely because mining is dominated by foreign companies with stringent internal safety procedures.
In the wake of the San Jose accident, the government has said it will more than double the number of mine inspectors in Chile, ensuring that on average, the country's mines are inspected every eight months. Until now, there were just 18 inspectors at Sernageomin charged with overseeing an industry which employs 175,000 people.
In addition, President Sebastian Pinera has established a commission to look into safety standards at Chilean workplaces across the economy. The commission has 90 days to come up with proposals to make Chile a safer place in which to work. It is due to report its findings on 22 November.
Whatever the commission proposes, mining in Chile will remain a risky business. In the first eight months of this year, 31 Chilean miners died in accidents caused by cave-ins, electrocution, explosions, asphyxiation and falls from heights.
If all goes to plan in the next few days and weeks, the names of the 33 men trapped at the San Jose mine will not be added to that lamentable death toll.
By Gideon Long BBC News, San Jose mine, Copiapo
www.bbc.co.uk
Chile produces a third of all the copper in the world. The country's economic welfare is heavily dependent on exports of the metal to Europe, the US and, increasingly, India and China.
When the copper price is low, multi-national companies like BHP Billiton, Anglo American and Xstrata - along with Chile's state-owned mining giant Codelco - account for the lion's share of production, because they are big enough to ride out the depressed prices.
But when the price is high, as it has been in recent years, smaller companies enter the market too. Speculative part-time miners - some with only limited experience - head out into the Atacama Desert and the foothills of the Andes.
Mines that had long since closed because they could no longer turn a profit suddenly find that they can. They reopen, often with no better safety standards than those in place on the day they closed.
The mine at San Jose is owned by San Esteban, a medium-sized mining company which is now being sued by families of some of the miners trapped underground, who claim the company failed to make safety improvements despite three deaths at its mines over six years, and dozens of accidents.
They are also suing Sernageomin, the state regulator of mines, for allowing the company to reopen in 2008 following its closure a year earlier over a death.
"There is undoubtedly a link between the price of metal and the number of people operating in the business, particularly in the small and medium-sized mines," said Miguel Angel Duran, president of Chile's Mining Council, which represents 16 of the biggest mining companies operating in Chile.
In 2007 and 2008, at the height of the boom in copper prices, there were more deaths in Chilean mines than in any other years during the decade. In 2007, when the copper price averaged a record $3.24 per lb, 40 miners died in accidents. In 2008, when copper was at $2.88 per lb, the death toll hit 43. The average for the decade was 34.
In contrast, the safest year in the history of Chilean mining was 1999, when the average copper price fell to just 72 cents, its lowest level in over 10 years, a consequence of the Asian crisis.
For the industry's smaller players, whose safety standards tend to be the poorest, there was simply no incentive to mine copper.
"It shouldn't be the case that when the price rises, the number of accidents rises too," said Andy King, national co-ordinator for health and safety at the massive North American trade union, United Steelworkers.
"In fact, the opposite should be the case," said Mr King, who visited the San Jose mine last month and has been deeply critical of safety standards at Chilean mines. "The higher the price of the metal, the safer the mine should be, because the company has more funds to improve safety."
Despite the fluctuations in both the price of copper and the number of accidents, the long-term trend is positive. There are far fewer serious accidents at Chilean mines than in the past.
The National Geology and Mining Service (Sernageomin), the state body tasked with regulating the industry, says there was an average of 0.41 deaths in Chilean mines for every one million hours worked during the 1980s. By the 1990s that figure had dropped to 0.28 and by the past decade to 0.13.
Figures from Chile's Department of Social Security suggest that mining is among the safest industries in the country.
Last year, there were 2.2 accidents in Chile's mines for every 100 workers, compared to 5.7 in the construction industry and 7.2 in agriculture and fishing. That is largely because mining is dominated by foreign companies with stringent internal safety procedures.
In the wake of the San Jose accident, the government has said it will more than double the number of mine inspectors in Chile, ensuring that on average, the country's mines are inspected every eight months. Until now, there were just 18 inspectors at Sernageomin charged with overseeing an industry which employs 175,000 people.
In addition, President Sebastian Pinera has established a commission to look into safety standards at Chilean workplaces across the economy. The commission has 90 days to come up with proposals to make Chile a safer place in which to work. It is due to report its findings on 22 November.
Whatever the commission proposes, mining in Chile will remain a risky business. In the first eight months of this year, 31 Chilean miners died in accidents caused by cave-ins, electrocution, explosions, asphyxiation and falls from heights.
If all goes to plan in the next few days and weeks, the names of the 33 men trapped at the San Jose mine will not be added to that lamentable death toll.
By Gideon Long BBC News, San Jose mine, Copiapo
www.bbc.co.uk
October 21, 2010
Hyundai: We're more American than Detroit
NEW YORK (CNNMoney.com) -- By next year about 80% of the vehicles Korean automaker Hyundai sells in the United States will be built here, the CEO of the automaker's U.S. arm told CNNMoney.
That percentage would likely put Hyundai at the top of the "Made in the USA" rankings among all automakers operating in the U.S., including Ford, Chrysler and General Motors.
Hyundai has been on a tear lately. The 2011 Sonata earned a top safety rating earlier this month, its vehicles have been getting rave reviews and its U.S. sales are booming.
Hyundai was one of the very few automakers to manage a sales increase in 2009, and last month they were up again by nearly half from the year before.
Considering its fast-moving success in the American market, CNNMoney asked Hyundai Motor America chief John Krafcik if he feared a "buy American" backlash.
Krafcik pointed out that Hyundai plans to move production of its popular Elantra from Korea to the automaker's Montgomery, Ala., plant later this year.
"I'm going to build my three best selling cars in the U.S.," Krafcik said. "Ford builds its best selling car in Mexico."
Test your knowledge: Which car is more American?
The Elantra is Hyundai's second most popular model. The Hyundai Sonata mid-sized sedan, Hyundai's biggest seller, and the Santa Fe SUV, which together make up half of Hyundai's U.S. sales, are already built here.
Ford Motor Co. builds the Fusion mid-sized sedan in Mexico. Ford was not able to say what percentage of the cars it sells in the U.S. are built here.
Popular Ford models, such as the Edge SUV and the Fiesta sub-compact, are built in Mexico and Canada. Even though the top sellers are built elsewhere, the bulk of Ford cars sold in the U.S. are built here. Still, they tally up to less than 80%.
Ford's not terribly bothered by the comparison, though.
"I think we're encouraged that, overall, American manufacturing is competitive," said Ford spokesman John Stoll.
Ford has also "in-sourced" a number of manufacturing jobs recently, bringing thousands of jobs back to the U.S. as it works with the United Autoworkers Union to make its older plants more competitive, he said.
Chrysler also didn't provide an exact figure, but some of Chrysler's most popular models, including its minivans and large sedans such as the Chrysler 300 and Dodge Charger, are built in Canada. That would put their U.S. production below 80%.
General Motors said between 60% and 70% of the cars it sells in the U.S. are assembled here.
Automakers generally don't break out the percentage of cars they sell that are built in the U.S. because, with free trade agreements, cars built in Canada, Mexico and the U.S. are counted together as "North American production."
Playing with numbers. Although Hyundai's 80% goal sounds impressive, the actual number of vehicles it builds domestically pales in comparison to major U.S. automakers.
For example: If GM only built about 66% of the vehicles it sold in the U.S. domestically in 2009 that would mean that GM would have more than tripled the 400,000 cars Hyundai expects to build in the U.S. next year.
Also, production figures like these deal only with "final assembly." In the case of Chrysler, for instance, engines and transmissions for many of the cars it assembles in Canada are built in U.S. factories and shipped north. With most major automakers, various components and parts move back and forth among Canada, Mexico and the United States, making it difficult to point to one place where a car is "built."
Analysts at J.D. Power and Associates don't quite share Krafcik's expectations for U.S. production.
"I don't have it at 80%," said J.D. Power analyst Jeff Schuster. "I have it closer to 70%."
Making Krafcik's "80%" prediction come true would require a big increase in Elantra and Santa Fe sales, similar to the boost that Sonata sales got after that model's recent redesign.
Schuster says sales of the Elantra and Santa Fe should rise significantly with their coming redesigns. The question is: By how much?
It's not about PR, it's about the dollar. Krafcik boasted of Hyundai's commitment to local market production. While it may offer some public relations benefit, that isn't the main reason for such a move, said auto analyst Todd Turner of Car Concepts.
"This corporation doesn't really make decisions based on PR," he said.
For foreign automakers, making cars in the U.S. provides two big benefits. For one, it protects them against changes in the value of their own currency relative to the dollar. Paying to build cars in South Korean Won then selling them in U.S. dollars can be difficult if the dollar loses value against the Won.
Second, it makes it easier to adjust to rapid shifts in consumer demands. If U.S. gas prices shoot up and car buyers start demanding more Elantra's and fewer Sonatas, production can be shifted and deliveries to dealers can start almost immediately. Not so when factories are an ocean away.
By Peter Valdes-Dapena, senior writer
Source: www.cnn.com
That percentage would likely put Hyundai at the top of the "Made in the USA" rankings among all automakers operating in the U.S., including Ford, Chrysler and General Motors.
Hyundai has been on a tear lately. The 2011 Sonata earned a top safety rating earlier this month, its vehicles have been getting rave reviews and its U.S. sales are booming.
Hyundai was one of the very few automakers to manage a sales increase in 2009, and last month they were up again by nearly half from the year before.
Considering its fast-moving success in the American market, CNNMoney asked Hyundai Motor America chief John Krafcik if he feared a "buy American" backlash.
Krafcik pointed out that Hyundai plans to move production of its popular Elantra from Korea to the automaker's Montgomery, Ala., plant later this year.
"I'm going to build my three best selling cars in the U.S.," Krafcik said. "Ford builds its best selling car in Mexico."
Test your knowledge: Which car is more American?
The Elantra is Hyundai's second most popular model. The Hyundai Sonata mid-sized sedan, Hyundai's biggest seller, and the Santa Fe SUV, which together make up half of Hyundai's U.S. sales, are already built here.
Ford Motor Co. builds the Fusion mid-sized sedan in Mexico. Ford was not able to say what percentage of the cars it sells in the U.S. are built here.
Popular Ford models, such as the Edge SUV and the Fiesta sub-compact, are built in Mexico and Canada. Even though the top sellers are built elsewhere, the bulk of Ford cars sold in the U.S. are built here. Still, they tally up to less than 80%.
Ford's not terribly bothered by the comparison, though.
"I think we're encouraged that, overall, American manufacturing is competitive," said Ford spokesman John Stoll.
Ford has also "in-sourced" a number of manufacturing jobs recently, bringing thousands of jobs back to the U.S. as it works with the United Autoworkers Union to make its older plants more competitive, he said.
Chrysler also didn't provide an exact figure, but some of Chrysler's most popular models, including its minivans and large sedans such as the Chrysler 300 and Dodge Charger, are built in Canada. That would put their U.S. production below 80%.
General Motors said between 60% and 70% of the cars it sells in the U.S. are assembled here.
Automakers generally don't break out the percentage of cars they sell that are built in the U.S. because, with free trade agreements, cars built in Canada, Mexico and the U.S. are counted together as "North American production."
Playing with numbers. Although Hyundai's 80% goal sounds impressive, the actual number of vehicles it builds domestically pales in comparison to major U.S. automakers.
For example: If GM only built about 66% of the vehicles it sold in the U.S. domestically in 2009 that would mean that GM would have more than tripled the 400,000 cars Hyundai expects to build in the U.S. next year.
Also, production figures like these deal only with "final assembly." In the case of Chrysler, for instance, engines and transmissions for many of the cars it assembles in Canada are built in U.S. factories and shipped north. With most major automakers, various components and parts move back and forth among Canada, Mexico and the United States, making it difficult to point to one place where a car is "built."
Analysts at J.D. Power and Associates don't quite share Krafcik's expectations for U.S. production.
"I don't have it at 80%," said J.D. Power analyst Jeff Schuster. "I have it closer to 70%."
Making Krafcik's "80%" prediction come true would require a big increase in Elantra and Santa Fe sales, similar to the boost that Sonata sales got after that model's recent redesign.
Schuster says sales of the Elantra and Santa Fe should rise significantly with their coming redesigns. The question is: By how much?
It's not about PR, it's about the dollar. Krafcik boasted of Hyundai's commitment to local market production. While it may offer some public relations benefit, that isn't the main reason for such a move, said auto analyst Todd Turner of Car Concepts.
"This corporation doesn't really make decisions based on PR," he said.
For foreign automakers, making cars in the U.S. provides two big benefits. For one, it protects them against changes in the value of their own currency relative to the dollar. Paying to build cars in South Korean Won then selling them in U.S. dollars can be difficult if the dollar loses value against the Won.
Second, it makes it easier to adjust to rapid shifts in consumer demands. If U.S. gas prices shoot up and car buyers start demanding more Elantra's and fewer Sonatas, production can be shifted and deliveries to dealers can start almost immediately. Not so when factories are an ocean away.
By Peter Valdes-Dapena, senior writer
Source: www.cnn.com
October 16, 2010
More details surface on Apple's next-generation MacBook Airs
By Kasper Jade
Published: 11:00 AM EST
A few more alleged details on Apple's forthcoming revamp of the MacBook Air line continue to trickle in, with one data point likely providing an explanation for the photo of a unreleased 13.3-inch MacBook Air design that surfaced overnight.
One of the people who helped flesh out some of the specifics in AppleInsider's report friday on the 11.6-inch MacBook Air has added a bit more color to story. According to this person:
* The 11.6-inch MacBook Air won't replace the 13.3-inch model, but will instead complement it as a more aggressively-priced option.
* Both the new 11.6- and 13.3-inch models sport matching outfits in the form of new, all-unibody designs and single button trackpads.
* The port door found on the existing MacBook Air is gone from the new designs, which feature a port layout similar to the existing MacBook Pros.
* The new "SSD card" storage is based off an SATA connection.
* The base component of both models is just slightly thicker than a standard USB port at its thickest point.
As such, AppleInsider believes the photo of the mysterious 13.3-inch MacBook Air that appeared on Engadget last night is indeed a prototype (from back in April) of the new 13.3-inch MacBook Air and is architecturally very close to what Apple plans to release next week alongside the new 11.6-inch model.
From that image, along with one also published of the machine's system profile, it appears that:
* The new SSD card-based storage sits above and to the left of the new battery chamber, which appears to include 4 separate battery components.
* The unit has dual USB ports, one on each side
* Other I/O include a MagSafe power adapter, mini DisplayPort, and SD card reader
* The prototype from April is running the same 1.86GHz Core 2 Duo SL9400 processor found in the current generation MacBook Air
* It also has 2GB of memory as standard
* Bus speed clocks in at 1.07GHz
* The unit identifies itself as MacBook Air 3,1
Published: 11:00 AM EST
A few more alleged details on Apple's forthcoming revamp of the MacBook Air line continue to trickle in, with one data point likely providing an explanation for the photo of a unreleased 13.3-inch MacBook Air design that surfaced overnight.
One of the people who helped flesh out some of the specifics in AppleInsider's report friday on the 11.6-inch MacBook Air has added a bit more color to story. According to this person:
* The 11.6-inch MacBook Air won't replace the 13.3-inch model, but will instead complement it as a more aggressively-priced option.
* Both the new 11.6- and 13.3-inch models sport matching outfits in the form of new, all-unibody designs and single button trackpads.
* The port door found on the existing MacBook Air is gone from the new designs, which feature a port layout similar to the existing MacBook Pros.
* The new "SSD card" storage is based off an SATA connection.
* The base component of both models is just slightly thicker than a standard USB port at its thickest point.
As such, AppleInsider believes the photo of the mysterious 13.3-inch MacBook Air that appeared on Engadget last night is indeed a prototype (from back in April) of the new 13.3-inch MacBook Air and is architecturally very close to what Apple plans to release next week alongside the new 11.6-inch model.
From that image, along with one also published of the machine's system profile, it appears that:
* The new SSD card-based storage sits above and to the left of the new battery chamber, which appears to include 4 separate battery components.
* The unit has dual USB ports, one on each side
* Other I/O include a MagSafe power adapter, mini DisplayPort, and SD card reader
* The prototype from April is running the same 1.86GHz Core 2 Duo SL9400 processor found in the current generation MacBook Air
* It also has 2GB of memory as standard
* Bus speed clocks in at 1.07GHz
* The unit identifies itself as MacBook Air 3,1
Faegre & Benson Unveils International Business Trends Report
A survey by international law firm Faegre & Benson LLP suggests many leading U.S. multinational companies are focused on overseas investment and expansion as a means of driving growth. More than half of survey respondents view China as the most promising country in which to grow sales and add production capacity over the next three years.
Drawing on information provided by nearly 400 C-level executives and general counsel, Faegre & Benson compiled the International Business Trends 2010 report. The report looks at a variety of trends, including markets in which these companies have operations or plan to establish operations, recent transaction activity and outlook, challenges to doing business across borders, and international revenue expectations.
Survey respondents represent global companies such as Target, 3M, General Mills, Ecolab, Best Buy, Boston Scientific, International Dairy Queen, and Cargill, as well as smaller public and private enterprises.
Other notable findings in the report include:
* More than 70 percent of survey respondents consider international investment and expansion to be a “primary” or “significant” focus of their company’s long-term growth strategy.
* Nearly half (46 percent) of companies participating in the survey derive 25 percent or more of their revenue from outside the U.S.
* Fifty two percent of respondents expect to grow non-U.S. revenue by 10 percent to 30 percent over the next three years, and 22 percent of respondents expect to grow non-U.S. revenue by more than 30 percent.
* Among respondents from large companies (revenues of more than $1 billion per year), 54 percent anticipate completing four or more acquisitions outside the U.S. over the next three years.
* A majority of respondents are looking at joint ventures with non-U.S. companies as a means of expansion—with 53 percent of companies anticipating one to three such transactions, and 16 percent of companies anticipating four or more—over the next three years.
* More than half (54 percent) of respondents indicate that “difficulty finding suitable targets” is their company’s most significant challenge in completing international acquisitions.
* Fifty nine percent of respondents plan to expand manufacturing capacity outside of the U.S. over the next three years. Reasons include facilitating sales in a key international market (56 percent), lowering the cost of production (23 percent), establishing technical expertise in the region (11 percent), or to accommodating a customer who requires local production (10 percent).
Source: www.kansascity.com
Sestak jockeys for jobs authority
MIDDLETOWN — With Keystone State payrolls smaller than they were in 1999, Pennsylvania’s candidates for U.S.
Senate worked Friday to control the debate over where the jobs went, and why they’re not coming back.
Republican Pat Toomey, echoing business leaders, has seized on Obama administration policies supported by Democrat Joe Sestak, such as the new federal health care law. Toomey says such policies are slowing the recovery; worries over the cost of new regulations and taxes have rendered companies unwilling to hire, he has said.
But Sestak, struggling to gain ground in independent polls, is targeting policies supported by Toomey that, he maintains, are friendly to multinational companies and give them incentives to move operations to foreign countries.
Toomey approves of China dumping cheap, government-subsidized goods on American consumers and supports a loophole that allows American companies to earn profits overseas without paying taxes on them at home, Sestak said.
In comparison, Sestak said he has pushed for tax breaks and guaranteed bank loans to small businesses, which do the
most hiring in the nation’s economy.
“This is the engine of our economy, this is it, small businesses. Congressman Toomey says it’s ‘an unfortunate tendency’ to buy American,” Sestak told about two dozen employees of a Harrisburg- area manufacturer of exercise and rehabilitation pools.
Sestak is a second-term U.S. House member from the Philadelphia suburbs and a former Navy admiral whose credentials during a 31-year career include commanding an aircraft battle group in support of the wars in Afghanistan and Iraq.
Toomey is a former investment banker and restaurant owner who also represented the Allentown area in Congress from 1999 to 2005. He more recently headed up the Washington, D.C.-based free-market advocacy group, Club for Growth.
Two weeks ago, the U.S. House overwhelmingly approved a measure that would allow the federal government to seek trade sanctions against China and other nations for manipulating their currency to gain trade advantages. Every U.S. House member from Pennsylvania voted for it, including Sestak.
Toomey said he would have voted against it, calling it bad economic policy.
Slapping tariffs on goods is tantamount to imposing a tax on consumers, Toomey said, even though he sees some merit to pressuring China to allow the value of its currency to rise. And he said taxing the foreign profits of American companies would simply create a stronger incentive for them to move their headquarters overseas.
“What we have to do is strengthen our own businesses in the United States so that we can compete,” Toomey said during a conference call with reporters Friday.
The recession wasn’t as severe in Pennsylvania as elsewhere in the country. However, Pennsylvanians who lost their jobs might not know it’s over. Payrolls have dropped by 230,000 jobs — or one in every 25 — since April 2008, when job loses hit the high mark of 5.8 million.
The number of unemployed people seeking first-time benefits is down substantially from the recession, but higher than normal.
More than 22,000 unemployed Pennsylvanians applied for first-time benefits during the week ending Oct. 2. That’s down from more than 30,000 a year ago. However, it remains above the September weekly average of 17,000 from 2001 to 2007, according to labor economist Mark Price, of the Harrisburg-based Keystone Research Center.
The race between Sestak and Toomey is ultra-competitive. New TV ads by the campaigns and outside groups are emerging at a rate of one per-day in October.
So far, Toomey leads in independent polls, fundraising and assistance from allies that buy TV ads, such as the U.S. Chamber of Commerce. However, Sestak entered October with a slight cash advantage over Toomey, according to information released by the campaigns Friday.
Source: http://www.centredaily.com/
October 15, 2010
The Philippines: Shell in tax probe
The Philippine unit of Royal Dutch Shell probably never expected to be called “a sacred cow” even though it is one of the country’s best-known companies. But neither did Pilipinas Shell Petroleum think that it might be accused of tax dodging or “technical” smuggling.
But that’s what’s happened. The company has become the first multinational to be hit by President Benigno Aquino III’s high-profile campaign against alleged tax-dodgers. And it may not be the last.The country’s bureau of customs announced on Thursday that its “campaign against tax dodgers shifted to a much higher gear with the filing of a 24-billion peso technical smuggling complaint against the multinational Pilipinas Shell Petroleum Corp.
Angelito Alvarez, the customs chief, said the criminal complaint against Shell “should prove to everyone that President Aquino’s campaign against smuggling, corruption and other economic crimes respect no sacred cows.”
The complaint against Shell, which runs one of two petroleum refineries in the Philippines, is part of a public assault on suspected tax evaders and smugglers launched shortly after Aquino’s inauguration on June 30. He vowed not to impose new taxes during the election campaign. Instead, he is doing all he can to curb tax evasion that swallows as much as 250bn pesos a year. The budget deficit this year is seen to grow to a record 325bn pesos.
At least once a week since July, tax and customs authorities have been filing complaints against companies and wealthy individuals suspected of failing to pay the correct taxes. Shell is the first multinational company caught in the drive that has so far targeted a wealthy pawnshop operator, a waste management company and other medium-scale businesses.
The customs bureau alleged that Pilipinas Shell evaded 2.7bn pesos in excise taxes and value added taxes by misclassifying or misdeclaring unleaded gasoline imports as tax-exempt substances to escape tax payments. It is seeking additional penalties of 21.8bn pesos.
The complaint has been submitted to the Department of Justice, which will decide whether or not to file a suit before a court after an investigation. The company’s spokesman did not reply to a request for comment. One of Shell’s external counsels downplayed the complaint, saying it was a desperate move by the customs bureau to boost collections that have been falling short of target.
The customs bureau has a separate case against Shell seeking to collect 7.3bn pesos in unpaid excise taxes on imports of petroleum products used for the production of unleaded premium gasoline. The bureau tried to seize some of Shell imports in December to enforce the collection but was blocked by an injunction from a court.
Ironically, Shell’s tax troubles partly stem from a decision to make petrol products in the country rather than import them like most others do. It brings in tax-exempt intermediate products, which authorities are keen treat as a finished product, thus, subject to tax. Of the three oil majors in the country that set up shop in the country after World War II, Shell is the only one still operating a refinery. Chevron closed its manufacturing facility in 2003 while Exxon sold its refinery in the early 1970s to Petron Corp, a Philippine state oil company that was later privatised. It runs the country’s other oil refinery.
On September 6, the Philippine energy secretary said one of the country’s two remaining petrol refineries will likely shut down because it is becoming less and less viable. No prizes for guessing which.
Source: blogs.ft.com
But that’s what’s happened. The company has become the first multinational to be hit by President Benigno Aquino III’s high-profile campaign against alleged tax-dodgers. And it may not be the last.The country’s bureau of customs announced on Thursday that its “campaign against tax dodgers shifted to a much higher gear with the filing of a 24-billion peso technical smuggling complaint against the multinational Pilipinas Shell Petroleum Corp.
Angelito Alvarez, the customs chief, said the criminal complaint against Shell “should prove to everyone that President Aquino’s campaign against smuggling, corruption and other economic crimes respect no sacred cows.”
The complaint against Shell, which runs one of two petroleum refineries in the Philippines, is part of a public assault on suspected tax evaders and smugglers launched shortly after Aquino’s inauguration on June 30. He vowed not to impose new taxes during the election campaign. Instead, he is doing all he can to curb tax evasion that swallows as much as 250bn pesos a year. The budget deficit this year is seen to grow to a record 325bn pesos.
At least once a week since July, tax and customs authorities have been filing complaints against companies and wealthy individuals suspected of failing to pay the correct taxes. Shell is the first multinational company caught in the drive that has so far targeted a wealthy pawnshop operator, a waste management company and other medium-scale businesses.
The customs bureau alleged that Pilipinas Shell evaded 2.7bn pesos in excise taxes and value added taxes by misclassifying or misdeclaring unleaded gasoline imports as tax-exempt substances to escape tax payments. It is seeking additional penalties of 21.8bn pesos.
The complaint has been submitted to the Department of Justice, which will decide whether or not to file a suit before a court after an investigation. The company’s spokesman did not reply to a request for comment. One of Shell’s external counsels downplayed the complaint, saying it was a desperate move by the customs bureau to boost collections that have been falling short of target.
The customs bureau has a separate case against Shell seeking to collect 7.3bn pesos in unpaid excise taxes on imports of petroleum products used for the production of unleaded premium gasoline. The bureau tried to seize some of Shell imports in December to enforce the collection but was blocked by an injunction from a court.
Ironically, Shell’s tax troubles partly stem from a decision to make petrol products in the country rather than import them like most others do. It brings in tax-exempt intermediate products, which authorities are keen treat as a finished product, thus, subject to tax. Of the three oil majors in the country that set up shop in the country after World War II, Shell is the only one still operating a refinery. Chevron closed its manufacturing facility in 2003 while Exxon sold its refinery in the early 1970s to Petron Corp, a Philippine state oil company that was later privatised. It runs the country’s other oil refinery.
On September 6, the Philippine energy secretary said one of the country’s two remaining petrol refineries will likely shut down because it is becoming less and less viable. No prizes for guessing which.
Source: blogs.ft.com
October 14, 2010
Offshoring No Longer Just for Big Companies
Much of the anger over offshoring is aimed at big multinational companies like IBM, which have been shifting a growing number of jobs overseas, and their clients, many of which are also large global companies. But a Contra Costa Times article spotlights an interesting trend: startups that hire contract workers in low-cost countries through online job sites like oDesk and Elance.
Article author Scott Duke Harris offers several Silicon Valley examples, including data storage service Box.net, which outsourced software development work to folks in Siberia, and RockYou, a development company that creates applications for Facebook and MySpace that supplemented its local production capabilities with Romanian and Japanese workers.
Harris notes some startups are called "micro-multinationals" due to their prowess in hiring global employees.
As I noted in a recent blog post, hiring temporary contractors like those who plug their services on oDesk and Elance is an appealing option for companies, not just startups, in a rocky economy. As I mentioned then, contractors employed through oDesk worked more than 1 million hours in August, an all-time high for the 7-year-old site. Just a year ago, workers on oDesk logged less than half of that, about 400,000 hours per month. Online hiring is up 129 percent since last year, pretty impressive considering the flat employment growth in the larger economy. The number of temporary IT jobs appears to be growing.
oDesk itself uses a global model. As Harris writes, the company was founded by partners in California and Greece. It has 38 full-time employees in California and the equivalent of 106 other full-time jobs elsewhere around the world. An example of an oDesk team: A stay-at-home mother in Tennessee manages a customer-support staff primarily based in the Philippines.
According to oDesk CEO Gary Swart, Silicon Valley companies that use oDesk can typically hire six workers overseas for the cost of a single California-based employee.
source: http://www.itbusinessedge.com/
September 24, 2010
Diageo in tax warning to Treasury
Companies will move their headquarters out of London if the Westminster tax regime becomes unattractive, the chief executive of Diageo has warned.
Paul Walsh has reminded ministers not to impose tax on a multi-national company such as his, which makes much of its profit outside its home country.
He said his threat had been withdrawn since he issued it earlier in the year.
But he said many governments did not appreciate how migratory companies could be in the technological age.
"Prior to the change of government in London, there were certain tax ideas suggested that would have been very problematic for a company such as ours, with global brands, that makes money around the world," he said.
"They would have made us very uncompetitive."
He added the suggestions were now off the table, so there was no need to look at other options. However, he said few governments understood how mobile companies could be.
"It doesn't matter where we're based, and governments can forget that," he said.
So if they start to think they can be cute on tax, they'll force us to consider other options."
Mr Walsh, who has been at the helm of Diageo for ten years, was briefing Scottish media ahead of the opening of a major new whisky distillery on Speyside. As the world's largest drinks company, Diageo dominates the Scotch whisky business with brands led by Johnnie Walker.
He said whisky was growing well, particularly in emerging markets, and that continued growth could see Diageo moving to a decision to build another large distillery within as few as five years.
He said the company's cash reserves built up over the past year could be used for acquisitions if unexpected opportunities arose, such as the sale of the Arnault family interest in LVMH Moet Hennessey or the controlling family interest in Jose Cuervo.
But acquisitions are more likely to focus on buying smaller businesses in emerging markets, including a share in a Chinese spirits business and Serengeti Brewery in Tanzania.
Diageo faced strong criticism in Scotland last year for its decision to close a bottling plant in Kilmarnock, with the loss of 700 jobs, as well as Port Dundas distillery in Glasgow, while investing in expanded capacity in Fife but with fewer jobs on offer.
With the distillery closed, and Kilmarnock being wound down until closure in 2012, the company gave an update on jobs, saying 300 of the Kilmarnock workforce had opted to accept redundancy terms. To date, 17 had moved to other Diageo sites, and 117 were considering roles they had been offered, more than half of them in Fife.
Of 145 workers at Port Dundas, 55 had taken up permanent roles elsewhere.
Reflecting on the controversy around the Kilmarnock closure, Mr Walsh said: "We don't take these decisions easily. What we will have coming out of his decision is a footprint of Scottish operations that is absolutely best in class, world-leading, which can sustain the industry and our business through the next ten or more years.
"It was a tough decision but it was a reaction to the long term opportunity rather than short-term pressures."
Paul Walsh has reminded ministers not to impose tax on a multi-national company such as his, which makes much of its profit outside its home country.
He said his threat had been withdrawn since he issued it earlier in the year.
But he said many governments did not appreciate how migratory companies could be in the technological age.
"Prior to the change of government in London, there were certain tax ideas suggested that would have been very problematic for a company such as ours, with global brands, that makes money around the world," he said.
"They would have made us very uncompetitive."
He added the suggestions were now off the table, so there was no need to look at other options. However, he said few governments understood how mobile companies could be.
"It doesn't matter where we're based, and governments can forget that," he said.
So if they start to think they can be cute on tax, they'll force us to consider other options."
Mr Walsh, who has been at the helm of Diageo for ten years, was briefing Scottish media ahead of the opening of a major new whisky distillery on Speyside. As the world's largest drinks company, Diageo dominates the Scotch whisky business with brands led by Johnnie Walker.
He said whisky was growing well, particularly in emerging markets, and that continued growth could see Diageo moving to a decision to build another large distillery within as few as five years.
He said the company's cash reserves built up over the past year could be used for acquisitions if unexpected opportunities arose, such as the sale of the Arnault family interest in LVMH Moet Hennessey or the controlling family interest in Jose Cuervo.
But acquisitions are more likely to focus on buying smaller businesses in emerging markets, including a share in a Chinese spirits business and Serengeti Brewery in Tanzania.
Diageo faced strong criticism in Scotland last year for its decision to close a bottling plant in Kilmarnock, with the loss of 700 jobs, as well as Port Dundas distillery in Glasgow, while investing in expanded capacity in Fife but with fewer jobs on offer.
With the distillery closed, and Kilmarnock being wound down until closure in 2012, the company gave an update on jobs, saying 300 of the Kilmarnock workforce had opted to accept redundancy terms. To date, 17 had moved to other Diageo sites, and 117 were considering roles they had been offered, more than half of them in Fife.
Of 145 workers at Port Dundas, 55 had taken up permanent roles elsewhere.
Reflecting on the controversy around the Kilmarnock closure, Mr Walsh said: "We don't take these decisions easily. What we will have coming out of his decision is a footprint of Scottish operations that is absolutely best in class, world-leading, which can sustain the industry and our business through the next ten or more years.
"It was a tough decision but it was a reaction to the long term opportunity rather than short-term pressures."
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