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Bellway confirmed further deterioration in demand for housing, saying it expects a 10-15% drop in the number of houses sold this year.
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Email friends del.icio.us Newsvine Digg Furl The group said there was no sign of the traditional Spring selling surge and that net reservations were down 31%. It had expected a fall of 5-10% in the number of homes sold, but had revised that down as consumer confidence and restricted mortgage supply impacted demand.
The Midlands, Yorkshire and the North West have been hit hardest, while the Thames Gateway and Scotland have proved resilient.
Bellway also expects a fall in margins as it introduces greater incentives to sell houses. This will bring margins of 18.7% last year down by 1-1.5&. The order book is also down from £845m at the same time last year to £706m today.
The group will have some support from its exposure to social housing. This is expected to continue to grow on the back of increased Government incentives.
Gearing will remain at its current level of around 30% and the group is not actively seeking out new opportunities for development.
The market had clearly been expecting worse and sent the shares up 23p to 617p. The housebuilding sector has seen huge drops over the past nine months and has seen an even more dramatic sell-off in recent weeks since Barrett Developments first exposed the extent of the drop in demand.
Bellway now trades on just 7x earnings and its share price is around 35% of its level a year ago. In the long-term, there is still a housing shortage in the UK, so the environment should be ripe for housebuilders, but the news flow is likely to be extremely poor until the credit crunch works itself out. It would be a brave investor who waded into the housebuilders at the moment.
engelsk førende husbygger faldet 25% i dag uden nyheder siden den her den 14 maj
den er faldet mere end 90%, så det er efterhånden nogle billige husbygningsaktier man har at vælge imellem
men risikoen for konkurs er nok stor, men alligevel synes jeg nu de virker rimeligt seriøse, så det er lidt vanskeligt at forestille sig at de ikke overlever
pippen spørger om de også laver fuglebure
jeg tror de kan lave et lyddæmpet hundehus, så man ikke kan høre når hunden gør inde i hundehuset
men jeg tror aldrig de kan lave et lyddæmpet fuglebur så man ikke kan høre pippen, når hun kæfter op derinde
http://finance.yahoo.com/q/bc?s=BDEV.L&t=my&l=on&z=m&q=l&c=
Barratt says 19-week housebuilding revenues down UPDATE
(Adds detail on reservations, cancellations)
LONDON (Thomson Financial) - Barratt Developments Plc said total housebuilding revenues in the 19-week period to May 11 fell 7.6 percent as market conditions have deteriorated significantly since the end of March.
The group added it has short-term financing in place, ruling out a rumoured rights issue, after agreeing to convert 400 million pounds of a facility into a new two-year facility.
Barratt said the facility, 'combined with the expected fall in land spend over the next financial year, effectively deals with the group's short term re-financing requirements'.
Total housebuilding revenues for the 19-week period was 825 million pounds compared to 893 million pounds in the prior year, while completions were down 5.5 percent.
Barrratt said its forward order book currently stands at 1.56 billion pounds, down from 2.1 billion pounds a year ago, reflecting the lower sales rates currently being delivered.
There has been a significant fall in net private reservations per week since the end of March, and cancellations also increased over the last six weeks, the company said.
In the 19 weeks to May 11, net private reservations per week averaged 276, up 13.1 pct from the first half of the financial year, but down 33.6 pct against the prior year. However, since the end of March, average net private reservations per week have dropped to 2006.
The company said it is experiencing greater pricing pressure across all regions, which will have a small negative impact on operating margins in the current year.
New sites are only being started on a highly selective basis where it has clear visibility of demand, and the number of sites is expected to decline in the next
financial year, Barratt said.
But the group sees a satisfactory outcome to the current year.
'Despite the deterioration in current trading conditions, we expect to deliver a satisfactory outcome for the current financial year,' said chief executive Mark Clare. lorraine.turner@thomsonreuters.com lht/ms1/bsu/ak
hvor finder man grafer på gasprisen rundt omkring i verden
i usa er den på vej mod 13
men jeg har set en del gange at den lå på 17-18 i resten af verden for flere måneder siden da den kun var omkring 10 i usa
pippen synes det er et mærkeligt bullmarked
når aktierne falder samtidigt
uanset recessionen i usa, stiger importen ufortrødent videre, også importen af biler som jeg har beskrevet det før at man skifter fra store trucks produceret i usa til personbiler,der skal importeres fra japan, korea og europa mm
så recessionen i usa har ingen negativ virkning på den globale økonomi
og iøvrigt giver jeg ingenting for IEA's prognoser og data, de har ikke styr på de data, der er de rigtige rundt omkring i verden
Trade deficit jumps to highest level in 13 months
Tuesday June 10, 8:56 am ET
By Martin Crutsinger, AP Economics Writer
Trade deficit jumps to $60.9 billion in April, highest level in 13 months reflecting oil surge
WASHINGTON (AP) -- The trade deficit jumped to the highest level in 13 months in April as America's bill for foreign crude oil soared to an all-time high.
The Commerce Department reported Tuesday that the gap between what the nation imports and what it sells abroad rose by 7.8 percent to $60.9 billion, the largest imbalance since March 2007. The April deficit was $4.4 billion higher than the March imbalance of $56.5 billion.
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The deterioration in the deficit was driven by a $4.3 billion increase in crude oil imports which jumped to a record $29.3 billion in April, as the average per barrel price rose to an all-time high of $96.81.
Oil imports are expected to climb further in coming months given that crude oil has continued its relentless rise and is now trading above $130 per barrel.
U.S. export sales totaled $155.5 billion in April, up 3.3 percent to an all-time high, reflecting big gains in sales of commercial aircraft, farm machinery, medical equipment and computers. But this increase was swamped by a 4.5 percent rise in imports, which also set a record at $216.4 billion, reflecting the huge increase in oil as well as big gains in imports of autos and consumer goods.
The deficit through the first four months of this year is running at an annual rate of $707.5 billion, up slightly from last year's deficit of $700.3 billion, which was a 7 percent drop from 2006. The improvement last year came after the trade imbalance set records for five consecutive years.
Many economists are looking for the deficit to shrink again this year as a sharp economic slowdown in the United States cuts into consumer demand for imports and the weak dollar helps to boost U.S. exports.
The Bush administration after tacitly accepting the decline in the dollar for years as a necessary ingredient to boost U.S. exports has switched signals. Officials are now talking about the need for a stronger dollar, a reflection of the pain being inflicted on Americans by high gasoline prices. While a weak dollar makes U.S. exports more competitive on overseas markets, oil producers demand higher prices for crude oil, which is priced in dollars.
Heading to a weeklong visit to Europe on Monday, President Bush said the administration would like to see the dollar strengthen in value. Treasury Secretary Henry Paulson pointedly said in a separate interview that the administration was taking no tools off the table that it might use to manage the dollar's value, including the use of government intervention to push the dollar's value higher. This administration has never intervened in currency markets in its seven years in office.
The politically sensitive deficit with China, which had fallen sharply in March, rose by 25.9 percent in April to $20.2 billion, reflecting higher imports of a wide range of Chinese products from cell phones to toys and games to televisions and other electrical appliances and clothing.
The United States and China will hold a fourth round of high-level talks on economic issues next week in Annapolis, Md., although there is little expectation of any breakthroughs on any of the various trade tensions that have been spawned by the surge in the deficit with China to all-time highs over the past several years.
The trade tensions with China have led to calls in Congress for adoption of punitive measures that would punish China for what critics see as unfair trade practices which have contributed to the loss of more than 3 million U.S. manufacturing jobs since 2001.
For April, the U.S. trade deficit with Canada, America's biggest trading partner, jumped by 18.6 percent to $7.6 billion, the highest level since January 2006.
The deficit with Mexico rose by 14.2 percent to $6.8 billion while the imbalance with the European Union increased 14 percent to $8.5 billion. The deficit with the Organization of Petroleum Exporting Countries rose 10.5 percent to an all-time high of $15.6 billion.
Japan machinery orders rise 5.5 percent
Tuesday June 10, 5:05 am ET
By Tomoko A. Hosaka, Associated Press Writer
Japan core machinery orders rebound in April, but economic outlook remains murky
TOKYO (AP) -- Japanese machinery orders -- a key barometer of capital spending -- rebounded in April after falling for two straight months, but the boost did little to alleviate concerns over the outlook for the world's second-largest economy.
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Core machinery orders, which exclude often volatile orders from electric power firms and those for ships, rose 5.5 percent in April from the previous month, the government said Tuesday.
That's after an 8.3 percent drop in March and a 12.3 percent plunge in February.
Compared with a year earlier and without seasonal adjustments, core orders rose 0.5 percent in April, the data from the Cabinet Office showed.
The indicator is considered an important gauge of business investment in the coming months, providing a window into corporate sentiment amid global economic uncertainties and weakening profits. The April bounce, while beating market expectations for a 3 percent increase, looks like a temporary bump than a reversal in the overall decline in machinery orders, economists said.
The Cabinet Office left unchanged its March assessment of the indicator, describing orders as "weakening."
One-time orders for power-generation machinery as well as railroad cars drove up April's numbers, said UBS economist Akira Maekawa.
Without those factors, he said, April core orders would have declined moderately from a year earlier instead of posting a slight gain.
"We're not in a situation where companies are aggressively making capital investments," Maekawa said.
The machinery orders data came a day after the release of a business activity index, which the government said signaled a "possible turning point" in country's economy.
Japanese Economy Minister Hiroko Ota on Tuesday downplayed the data's implications, saying that it was too early to declare the end of Japan's six-year economic expansion.
Still, she acknowledged that soaring crude oil prices and the U.S. economic slowdown are battering the country, and said Japanese capital spending remains weak.
"The orders for April rose higher than expected, but they are just a rebound from a consecutive fall in the two previous months. (The investment situation) needs careful monitoring," she said at a regular press conference Tuesday.
The Cabinet Office predicted last month that machinery orders in the April-June quarter would fall 10.3 percent from the previous quarter and decline 6.6 percent on year.
Ota, however, said she doesn't expect machinery orders to remain stagnant in the future.
"While the U.S. economy is slowing down, the Asian economies remain healthy, which is a plus (for machinery orders)."
det ser ikke godt ud i europa og asien, selvom usa var nogenlunde stabil i aftes
så jeg kan godt forstår man tror at resten af verdens aktier følger usa, men de falder stort set både når usa falder og stiger i øjeblikket
så pippen er blevet søsyg og ligger inde i fugleburet og snakker i søvne
Bernanke: Danger of downturn appears to have faded
Monday June 9, 9:26 pm ET
By Jeannine Aversa, AP Economics Writer
Bernanke: Danger of 'substantial downturn' has faded despite big jump in jobless rate
WASHINGTON (AP) -- Despite a recent spike in the nation's unemployment rate, the danger that the economy has fallen into a "substantial downturn" appears to have waned, Federal Reserve Chairman Ben Bernanke said Monday.
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Addressing a Fed conference in Chatham, Mass., on Monday night, Bernanke said a government report last week showing the unemployment rate rising from 5 percent in April to 5.5 percent in May -- the biggest one-month jump in two decades -- was "unwelcome." However, the Fed chief said other forces should "provide some offset to the headwinds that still face the economy."
The Fed's powerful doses of interest rate cuts, the government's $168 billion stimulus package, further progress in the repair of problems in financial and credit markets, a gradual ebbing of the drag from the deep housing slump and still solid demand from abroad for U.S. exports should help the economy over the remainder of this year, he said.
Although economic activity is "likely to be weak" during the current April-to-June quarter, Bernanke said "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."
Last Friday fears were rekindled that the country could be headed for a deep recession after the unemployment rate zoomed and oil prices registered their biggest single-day leap.
However, Bernanke said, "Recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly."
Still, soaring energy prices are a double-edged sword for the country. Oil prices closed Monday at $134.35 a barrel, down from last week's high of $139.12 a barrel. They risk putting a further damper on growth as well as spreading inflation through the economy, Bernanke said.
"Inflation has remained high," largely reflecting sharp increases in the prices of globally traded commodities, Bernanke said. "The latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations," he said.
The Fed is paying close attention to the extent to which consumers, investors and businesses believe prices will rise in the future, he said. If consumers, investors and businesses believe inflation will continue to go up, they will change their behavior in ways that aggravate inflation, turning it into a self-fulfilling prophecy.
The Fed "will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as for inflation," Bernanke said.
Bernanke spoke Monday evening to a conference on understanding inflation and the implications for Fed policymakers in setting interest rates. The forum was sponsored by the Federal Reserve Bank of Boston. His comments on the economy's outlook were fairly brief and were part of a larger, mostly academic speech.
Last week, Bernanke sent his strongest signal yet that the Fed's rate-cutting campaign was probably over for now because of growing concerns that soaring oil and other commodity prices -- along with a weakened dollar -- are aggravating inflation.
To help brace the economy, the Fed dropped rates in late April to 2 percent, a nearly four-year low, continuing a rate-cutting campaign that started last September.
Many economists believe the Fed will hold rates steady at its next meeting on June 24-25 and probably through much, if not all, of this year. However, some believe inflation could flare up and force the Fed to begin boosting rates later this year or next year.
Inflation forecasting is important to Fed policymakers when determining the best course on interest rates. Even with extensive research over the years, much remains to be learned about both inflation forecasting and inflation control, Bernanke said. And there are areas where additional research could prove helpful.
Policymakers and analysts often have relied on information from commodity futures markets to help shape inflation forecasts, Bernanke said. In recent years, though, information from futures markets has "underpredicted commodity price increases ... leading to corresponding underpredictions of overall inflation," he said. The "poor recent record" on that front raises the question of whether policymakers should continue to use this source of information and, if so, how, Bernanke said.
Despite the recent record, Bernanke said he didn't think it was reasonable to ignore information about supply and demand culled by futures markets. However, it does seem reasonable, he said, to treat such information as highly uncertain.
Working to make economic data timelier and more accurate also would be useful to policymakers trying to divine inflation's direction. Moreover, it would also be helpful for policymakers to know more about how people's inflation expectations are influenced by Fed interest rate actions, Fed communications and economic developments such as oil price shocks.
"Much evidence suggests that expectations have become better anchored than they were a few decades ago, but that they nonetheless remain imperfectly anchored," Bernanke said.
Federal Reserve: http://www.federalreserve.gov/
den her guldaktie er billig på pe og kursen har ikke gjort ret meget
de er unhedged og får derfor en fortsat stærk stigning i indtjening samtidig med at de ekspanderer
et godt play på fortat stigende guldpriser fordi de tjener penge med en pe på omkring 15-20, i halvåret frem til 07 3q uden gæld så man skal ikke sidde og vente på et udviklingsselskab, der først producerer i overmorgen og med en guldpis på 900-1000 kan de sagtens trykke pe ned på 7-8 på nuværende kurs i 2008/09
http://finance.yahoo.com/q/bc?s=AVM.L&t=5y
pippen regner med at vi får et bull marked idag
det er bare alle de her pessimister, der tror at når det falder en dag bliver det ved med at falde
sådan er det slet ikke, man skal altid regne med små tilbagefald undervejs når man er på vej ind i et bullmarked
selv gumsen kan se det og lille pip er slet ikke i tvivl, sådan har det altid været, siger hun selvsikkert selvom hun lige er blevet født
Engineering Giant Fluor Smashes Views, Ups Outlook On Energy Sector Demand
Monday May 12, 7:01 pm ET
Marilyn Alva
Strong demand from oil and gas companies lifted earnings at infrastructure giant Fluor (NYSE:FLR - News) by 60% from last year, smashing Wall Street forecasts.
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Fluor earned $1.50 a share in the first quarter, the company said after Monday's market close. Analysts expected just $1.27.
"We underestimated the strength of the oil and gas end markets," said analyst Andy Kaplowitz of Lehman Bros.
What's more, the firm raised its full-year EPS outlook to $6.25 to $6.55 -- 21% higher at the mid-point 20han its $5.10 to $5.50 forecast on Feb. 28.
"The Street likes that the best," Kaplowitz said. Shares jumped 7% in after-hours trading.
Revenue in the quarter grew 32% to $4.8 billion, also above forecasts.
Fluor won $5.7 billion in new project awards. That was down slightly from the fourth quarter but 28% higher than a year earlier.
Though Irving, Texas-based Fluor is one of the more diversified engineering and construction firms in the world, oil and gas projects made up the lion's share of new-project awards, some $4.3 billion.
The rest came from industrial, power, global services and government contracts. Total backlog at the end of the quarter stood at a record $31.5 billion.
McDermott International (NYSE:MDR - News), another energy-related infrastructure firm that reported late Monday, didn't fare as well. Its first-quarter earnings fell 22% to 54 cents, meeting views. Revenue rose 6% to $1.45 billion, just missing forecasts.
The firm had said that bad weather in Asia-Pacific and the Mideast would affect offshore work.
McDermott focuses mostly in the offshore oil and gas markets. Fluor mostly works onshore.
With oil topping $125 a barrel, energy firms are willing to keep the spending spigot open, analysts say.
"A lot of Fluor's customers have raised forecasts for capital expenditures over the next several years," said Kaplowitz, citing Exxon Mobil (NYSE:XOM - News) as one.
Fluor's client roster features major and national oil companies, including Chevron (NYSE:CVX - News), Marathon Oil, ConocoPhillips (NYSE:COP - News), Irving Oil and the Kuwait National Petroleum Co.
Though more than half of Fluor's revenue stems from the U.S., one exec said during yesterday's conference call that it has seen "very little effect from tightening credit and recessionary pressures."
Kaplowitz says customers aren't looking at a slower U.S. economy this year but are making projections on what they think will happen three to five years from now.
In the U.S., a lot of growth will continue to come from oil refinery expansion and upgrades, especially to handle more high-sulfur heavy crude, which is cheaper and more plentiful than sweet crude.
Growth in the Mideast and China tends toward brand-new refineries and chemical plants.
Emerging-market demand and inadequate output from non-OPEC areas likely will keep oil prices high for some time, analysts have said.
New awards Fluor booked included work on a major refinery upgrade by Total Petrochemical in Port Arthur, Texas, and a massive new solar-energy polysilicon plant in China for LDK Solar (NYSE:LDK - News).
Alternative-energy projects are a small portion of overall sales, but they are expected to grow in tandem with rising demand for renewable energy sources.
Fluor's power-segment revenue jumped 104% to $422 million, while global services saw an 11% uptick to $706 million. Industrial revenue was flat, while government sales dropped a bit.
Farm crisis spooks Argentine economy
Sunday June 8, 8:27 pm ET
By Jeannette Neumann, Associated Press Writer
Argentina misses out on grain bonanza as farm crisis sparks fears of economic downturn
BUENOS AIRES, Argentina (AP) -- Argentina, one of the world's biggest breadbaskets, should be rolling in cash as world food prices soar.
Instead, soy, wheat and corn have sat for weeks in silos as farmers protesting new export taxes suspended sales.
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Farmers were lifting their strike Sunday night in a last-ditch effort at a third round of talks. But their three-month standoff with the government has already paralyzed the rural economy, caused scattered food shortages and tanked the new president's popularity.
And continued stalemate could spike global grain prices at a time when food costs are already high.
Still, experts say grain prices won't rise forever, and many warn that Argentina may be missing its shot at that record revenue -- and headed for economic crisis.
"They are killing the goose that lays the golden eggs," said Claudio Loser, a former Latin America director at the International Monetary Fund.
Farmers meet Monday with a national ombudsman who has offered to broker the crisis, but the government has not yet agreed to join talks.
Argentina is one of the world's top four providers of soy, corn, beef and wheat, and rising farm exports -- up 48.2 percent since 2003 -- helped the country rebound from economic meltdown in 2002, driving five years of more than 8 percent annual growth.
Exports stood to climb even higher this year, as international soybean prices jumped about 26 percent and corn prices about 34 percent between January and June.
To tap those gains, President Cristina Fernandez decreed a new sliding-scale tax on March 11, boosting rates on grain exports as prices rise. Current export taxes on soy, for example, jumped to 46 percent from 35 percent, and would top 50 percent if prices swelled above $600 a metric ton.
The move was meant to tame inflation by trapping exports in Argentina, driving down local prices and encouraging cultivation of stocks like wheat and cattle, which have been abandoned for more lucrative soy.
But objecting farmers have suspended grain shipments for 89 days in protest, crippling rural towns with roadblocks and layoffs and causing food shortages in cities including Buenos Aires. Cattle ranchers affected by separate export restrictions also halted sales.
Ships at Rosario, one of the country's main ports, now drift idly awaiting cargo at a cost to exporters of as much as $70,000 a day. Last week, thousands of truck drivers idled by the strike blocked highways, demanding that farmers and the government negotiate.
About 75 percent of Argentines agree that talks are needed, while 14.5 percent support continued protests, according to a May 25-26 poll by Ricardo Rouvier and Associates. The survey of 550 people in Greater Buenos Aires had a sampling error margin of 4 percentage points.
Past negotiations have failed. The country's four biggest farm groups rejected the government's May 29 move to trim only the highest tax rates, which applied only if prices significantly soared.
U.N. Secretary General Ban Ki-moon criticized measures similar to Argentina's at a summit last week in Rome, calling on world leaders to end export bans, tariffs and taxes that he said impede trade and inflate food prices. Argentina argued that subsidies, not taxes, are responsible.
So far, the strikes have cost Argentine farmers $2.3 billion in missed soy, wheat, corn and sunflower seed sales, said Pablo Adreani, an economic analyst with AgriPAC Consultores, a Buenos Aires consulting firm.
Yet even with those sales suspended, high prices ensured that farm earnings still beat last year's for the first five months of the year, according to Argentina's Grain Exporters' Center.
That paradox leaves many lamenting a lost bonanza.
"The fact that we're even considering a crisis amid this historical commodities boom makes no sense," said Gabriel Torres, a senior analyst at Moody's Investor Services in New York. "It tells you how incredibly self-inflicted this is."
Had the government taxed rising farm income at its previous rate, the windfall could have financed needed utilities and energy sector infrastructure or funded programs for the country's 10 million poor, analysts said.
"The opportunity cost of this paralyzed economy is huge," said Ricardo Baccarin, chief analyst at Paniagricola S.A., a Buenos Aires grain brokerage. "There's practically a complete paralysis of commercial activity."
Buenos Aires accountant Juan Kennedy sees that new reticence in his corporate clients. They're no longer looking to grow or invest, but "just waiting to see what happens and keeping their assets as safe as possible," he said.
For many, safety means fleeing the peso. Inflation -- officially reported at 8.9 percent in April, but thought by economists to top 25 percent -- has further fueled the trend, prompting the Central Bank to sell about $1.5 billion in reserves since May 9 to keep the currency stable.
At Banco Piano, a foreign exchange in downtown Buenos Aires, the number of Argentines swapping pesos for U.S. dollars and euros has increased 20 percent since the strikes began, bank president Alfredo Piano said.
"We're uncertain what this government has in store for us, and we don't have a lot of confidence," said Maria Cristina Mongelos, a 42-year-old dressmaker who waited in a lunchtime line to buy U.S. dollars last week.
Those doubts are fueled by the specter of 2001-02, when a depression and massive run on banks caused Argentina to default on $95 billion in bonds -- the largest default in history.
Now, Moody's ranks Argentina as one of a few countries most likely to default again -- on par with neighbors Paraguay, Bolivia and Ecuador, where per capita GDP is much lower.
"These are countries that are one large shock away from default," Torres said.
World grain markets have responded to the farm strike with some restraint, as investors see too much at stake for both the government and farmers to bet that they will let the crisis continue, said Anne Frick, a senior oilseed analyst for Prudential Financial in New York.
But as the standoff grows increasingly political, solutions become more complicated, said Daniel Kerner, an analyst for the Eurasia Group in New York.
Several rural state leaders have rallied behind farmers, along with 300,000 supporters who attended a May 25 demonstration -- a show of force that makes farmers less likely to accept government terms, Kerner said.
Approval ratings for Fernandez, who took office Dec. 10, have meanwhile slipped to 26 percent from 56 percent in January, according to a May 3-11 poll of 1,000 Argentines by the Buenos Aires consultancy Poliarquia. The survey has an error margin of 3.5 percentage points.
Her government "remains more concerned about winning this battle than about putting an end to the conflict," Kerner wrote in a note to investors.
It "fails to realize that it has already lost, and that the conflict is generating uncertainty that is not only affecting its popularity, but is also affecting the economy."
aldrig før har der været så godt et grundlag for at aktierne stiger nu reccesionen i usa snart er overstået og usa får et mægtigt stærkt skub pga boomet i resten af verden
og så siger de gudhjælpemig at det aldrig har været værre
det siger de faktisk hver gang, 'this is the worst seen ever' selvom det kun er en mus de kigger på og der har været mange elefanter tidligere
There's nothing like a recession to get investors' juices flowing, for history suggests that stock-market rallies start during recessions.
But broad and sustainable rallies rest on a combination of factors -- the earnings outlook, interest rates and economic prospects -- all going in stocks' favor. That's hardly the case right now -- and that's what makes even seasoned pros nervous.
Investors who bought the S&P 500-stock index at the end of the fourth quarter of 1990 -- roughly the middle of the 1990-91 recession -- would have booked a nifty 26% return by the end of 1991. Three factors supported that rally: Corporate earnings didn't fall off a cliff after the end of 1990; stocks weren't particularly expensive then; and the Federal Reserve slashed interest rates to 4% from 7% through 1991.
Compare that with now. Merrill Lynch economist David Rosenberg wrote in a research note Friday that the unemployment numbers suggest "we are barely half-way through this downturn."
If so, this economic rough patch has at least another five to six months left -- and could extend into 2009. Sluggishness persisting that long would jeopardize the big increases in corporate earnings that Wall Street analysts are expecting, which would weigh on stocks.
For instance, analysts expect the companies in the S&P 500 to report operating earnings in the first quarter of next year that are 50% higher than in this year's first quarter, according to data from S&P. Investors would be hard pressed to find many companies that could produce that sort of earnings growth, even off the depressed profits reported in the first quarter.
And if earnings disappoint though this year, stocks' current lofty valuations make them all the more vulnerable to a fall.
At Friday's close of 1360.7, the S&P 500 was trading at 17.7 times operating earnings for the 12 months to the end of March.
That's substantially higher than at the end of 1990, when the index was trading at 14.6 times operating earnings, according to S&P. Apply that 1990 multiple to the S&P 500's 12 months of operating earnings through March and the index would be trading 1121, which is 17.6% below Friday's close.
Of course, in recessions, investors will pay up in the belief that earnings will grow into a stock's high valuation when the economic rebound occurs.
That hope in turn rests on the belief that the Federal Reserve can engineer a recovery by slashing interest rates. Perhaps because of the sick financial sector, that tactic is taking a lot longer to work. Since its most recent cuts started in September, the Fed has taken rates down to 2% without jump-starting the economy, so the impact of 1% rates, if the Fed takes them there, may not be large.
This is why one shouldn't be too surprised if the stock market doesn't rebound sharply this week after Friday's plunge. Even sophisticated investors have been burned repeatedly. What looked like golden opportunities in companies ranging from Citigroup to Washington Mutual to Merrill Lynch have ended up being lumps of coal. Multinationals that have held up on the back of a weaker dollar now look vulnerable on high commodity costs and slower global growth. Revenue at large tech companies may not come under severe pressure, but stock valuations in the sector may still be too optimistic.
No recession is pleasant, but this one is no friend to stock pickers.
Banks' Woes May Lead to More Dividend Cuts
As banks' troubles keep piling up -- the latest: souring construction and commercial real-estate loans -- look for some of the largest lenders to once again take a hatchet to their dividends.
Under pressure from regulators, banks have been scrambling to shore up capital levels, which provide a cushion against sudden losses. They have raised new funds from outside investors. They have reined in share buybacks. They have put expansion plans on hold. And, in many cases, they have chopped their dividends.
But payouts at some struggling banks remain remarkably generous. Wachovia, for example, still sports a 7% dividend yield even after axing its payout by 41% in April. At Citigroup, which shrank its dividend in January, the yield remains above 6%.
In fairness, those ratios are inflated by the fact that banks' share prices have been pummeled. But Wall Street is increasingly questioning the logic of doling out billions of dollars even as rising defaults sap bank reserves.
Bank analysts at Goldman Sachs said Wednesday that Wachovia's board, in the wake of forcing out its chief executive, could save $1.6 billion a year by halving its payout.
So, why not just suspend dividends altogether? Bankers worry that it would be seen as an act of desperation. But six months ago, they were arguing the same thing about trimming their payouts. The stigma faded after a couple of banks bit the bullet.
Font Size: PrintEmail Floyd Norris notes that the S&P financials have sunk back to their mid-March lows. But although the index as a whole is back at its mid-March level, its components generally aren't. What we're seeing is pretty much what Mohamed El-Erian predicted in April: the second shoe dropping, and the bad news moving from the world of financial engineering into a much more real world of struggling businesses.
During the next few months there will be a reversal in the direction of causality: the unusual adverse contamination by the financial sector of the real economy is now morphing into the more common phenomenon of recessionary forces threatening to undermine the financial system...
While the financial system has taken steps to enhance balance sheets, they speak essentially to addressing the consequences of excessive leveraging and imprudent financial alchemy. As such, the nasty turn in the real economy may fuel another wave of disruptions that, this time around, would also have an impact on mid-size and smaller banks.
So far, Wall Street still looks noticeably healthier than it did during the worst days of the Bear Stearns crisis. But Main Street, as exemplified by lenders in places like Ohio, looks much worse. Here are the biggest financial stock-price losers in the banking industry, from Norris:
First Horizon (FHN), down 43 percent. (It is the parent of First Tennessee Bank.)
National City (NCC), down 34 percent. Ohio's largest bank is under increased regulatory scrutiny.
Wachovia (WB), down 21 percent. Its CEO was fired for losses.
Huntington Bank (HBAN), down 21 percent. Also from Ohio.
Regions Financial (RF), down 21 percent. It is based in Birmingham, Ala., where the county government may have to declare bankruptcy after getting caught in the derivatives mess.
Fifth Third Bank (FITB), down 21 percent. Another Ohio bank.
KeyCorp (KEY), down 19 percent. Another Ohio bank.
These aren't institutions which came unstuck when their leveraged super-senior trades imploded; these aren't banks which were lending billions of dollars to private-equity firms in the form of PIK-toggle bonds. Yes, they have real-estate exposure, but look at the states here: Tennessee, Ohio, Alabama. Not California or Florida, where the real-estate bubble burst most spectacularly.
Commercial banks are in many ways a leveraged play on the strength of their local economy. So while the March dip in the S&P financials was symptomatic of Wall Street's troubles, the June dip indicates something much broader.
Chile's Inflation Accelerates to 13-Year High in May (Update2)
By Sebastian Boyd
June 5 (Bloomberg) -- Chilean inflation accelerated more than economists expected in May to the highest in more than 13 years, raising speculation the central bank will lift interest rates this month. The peso rose.
Consumer prices climbed 8.9 percent in the 12 months to May, more than any of the 20 economists surveyed by had forecast. Last month alone prices rose 1.2 percent, the National Statistics Institute said today in Santiago.
Faster inflation will probably lead the central bank to raise interest rates at its June 10 meeting after a five-month pause, according to analysts such as Luis Arcentales at Morgan Stanley. Policy makers pondered raising rates by 25 basis points at their last meeting, according to minutes published yesterday.
``Today's data justify the central bank's growing discomfort with inflation dynamics,'' said Arcentales, who is based in New York. ``A hike is likely.''
Economists, including Rodrigo Valdes at Barclays Capital, who used to head research at the Chilean Central Bank, raised their interest rate forecasts. Barclays now expects two interest-rate increases, including one at the next meeting.
Chile's currency advanced the most since March 11, jumping 1.7 percent to 480.25 per dollar at 12:52 p.m. New York time.
Bertrand Delgado, a senior economist at IDEAGlobal in New York, and Cristian Gardeweg, an economist at Celfin Capital in Santiago, also raised their projections for interest rates.
Rate Outlook
The bank will ``very probably'' hike at this meeting or the next and may lift rates to 6.75 percent later in the year, Gardeweg wrote today in a note to clients. He expects the peso to strengthen to 470 per dollar as the market prices in the likelihood of higher rates, falling to 480 per dollar by the end of the year.
``The probability of a rate rise has increased -- the inflation figures from today confirm it,'' Gardeweg said in a telephone interview.
Central bank vice president Jorge Desormeaux warned in a June 1 interview with La Tercera newspaper that the bank may need to raise rates if the price of oil doesn't fall.
The possibility of a rate increase is causing the peso to rally again after intervention announced April 10 by the central bank to stem its appreciation.
A 25 basis-point rate increase may strengthen the currency to about 450 pesos per dollar, said Goldman Sachs Group Inc. economist Alberto Ramos. ``It will help them,'' Ramos said. ``If the peso were not to strengthen they should hike by 50'' basis points.
Economic Expansion
The economy expanded 4.8 percent in April from a year earlier, the central bank said today. That was more than the 3.5 percent median estimate of 21 economists surveyed by Bloomberg. Economic growth accelerated from 0.7 percent in March, partly because April had two more working days this year than last year, the central bank said.
Rising food and fuel prices are stoking inflation, the bank's president Jose De Gregorio said on June 2.`` Controlling inflation has costs,'' De Gregorio said. ``Ignoring the risk of inflation would be much more costly.''
A 6.2 percent monthly increase in the cost of unleaded gasoline helped push up transport costs, and the price of grade 2 rice rose 32 percent, the National Statistics Institute said today in Santiago. Core inflation was 0.7 percent in May, the statistics institute said.
Wholesale gasoline prices rose a further 6.3 percent today, according to state-owned oil company Empresa Nacional de Petroleo. Kerosene rose 7.3 percent and diesel 6.4 percent. The government this week promised to increase subsidies for pump prices by $1 billion in a move Finance Minister Andres Velasco said would help slow inflation.
Meirelles Signals More Brazil Rate Increases Coming (Update1)
By Andre Soliani and Heloiza Canassa
June 5 (Bloomberg) -- Brazil's central bank President Henrique Meirelles signaled policy makers will raise the benchmark lending rate further to bring inflation down from a two-year high in Latin America's largest economy.
The eight-member board increased the rate to 12.25 percent from 11.75 percent late yesterday, matching the expectations of economists surveyed by Bloomberg. It was the second rate increase in three years in Brazil.
The central bank is making borrowing more expensive to head off inflation spurred by higher food prices and growing consumer demand for cars and other big-ticket items. Brazil's economy grew 6.2 percent in last year's fourth quarter, more than twice the pace of the past decade. Bank lending has almost doubled in the past three years.
``The Brazilian central bank recognizes the real problem of inflation,'' Fitch Ratings senior director Shelly Shetty said at a presentation in New York today. ``They have a game plan and they are executing it.''
Inflation in Brazil climbed from an eight-year low of 3 percent in March 2007 to 5.25 percent through mid-May, above policy makers' 4.5 percent year-end target for a fifth month.
``The rate adjustment cycle has just started,'' Hugo Penteado, chief economist for Banco Real Administradora de Recursos, said in an interview.
Penteado expects the central bank will raise rates another 2 percentage points by the end of the year, a move that he believes will control inflationary pressure.
Statement Change
``Continuing the adjustment process of the benchmark interest rate, which was initiated at the April meeting, the Copom decided unanimously to raise the Selic rate to 12.25 percent,'' the bank said in a statement last night.
The bank removed language from its April 16 statement saying it had carried out a ``significant part'' of the tightening process. Marcelo Carvalho, chief economist for Brazil at Morgan Stanley, said the most recent statement is more ``open-ended.''
``The tightening cycle may be longer than the previous statement indicated,'' Carvalho said in an interview. ``The central bank signaled they will increase the rate as much as needed.''
The bank's half-point increase met the expectations of 28 of 40 economists surveyed by Bloomberg. Eleven analysts forecast a three-quarter-point increase and one expected no change.
Real Trading
The Brazilian real was little changed at 1.6293 per dollar at 11:38 a.m. New York time. The currency has surged 19 percent in the past 12 months, the biggest gain among the 16 most- actively traded currencies versus the dollar.
The central bank will raise interest rates to 13.75 percent by the end of the year, a central bank survey of economists shows. Last night's half-point rate increase pushes the real interest rate, which is the rate after adjusting for inflation, to 7 percent, the highest among 52 leading economies tracked by Bloomberg.
The bank in October held the benchmark rate at 11.25 percent, ending the longest cycle of cuts since Brazil adopted inflation targets in 1999.
Meirelles told Brazilian lawmakers May 28 that bank policy makers will act to prevent rising wholesale industrial and agricultural costs from spreading to consumers as household demand expands at a record pace. The IGP-M inflation index, which has a 60 percent weighting in wholesale prices, surged to a three-year high of 11.53 percent in May.
Bank Lending
Lending by banks has climbed at least 20 percent in each of the past three years. Retail sales jumped 11.4 percent in March, capping the strongest quarter on record. Industrial production jumped 10.1 percent in April from a year earlier, the highest in six months.
Brazilian President Luiz Inacio Lula da Silva and his predecessor, Fernando Henrique Cardoso, have bolstered investor confidence in the country by underscoring the government's commitment to battling inflation.
Lula's moves to cut the budget deficit and allow the central bank to operate independently helped win Brazil an investment grade credit rating. Last week Lula ignored calls from his party to boost spending and instead ordered an $8 billion budget cut.
Annual inflation, as measured by the benchmark IPCA index, reached a record 4,922 percent in mid-1994. The index, which averaged 400 percent a year between 1980 and 2007, fell below 10 percent for the first time in 1996.
10th-Biggest Economy
Under Lula, Brazil has become the world's 10th-biggest economy, up from 14th biggest when he took office in 2003, according to International Monetary Fund data.
Brazil is the only major economy in Latin America with an investment grade rating on its debt that has managed to keep inflation within its target. Chile's annual inflation is at 8.5 percent, more than double the upper end of the 2 percent to 4 percent target range. In Mexico, consumer prices jumped to 4.55 percent in April, more than half a point above the top of the target range.
HONG KONG, May 15 (Reuters) - LG Display (034220.KS: Quote, Profile, Research) plans to spend 1 trillion won ($952 million) on a sixth generation production line that will likely begin operations in the second quarter of 2009, a Lehman Brothers analyst quoted the flat-panel maker's chief executive as saying in an analyst meeting.
LG Display Chief Executive Kwon Young-soo also expressed confidence that by strengthening the technology panel business, the company would withstand potential oversupply in 2009, and cited that as a reason why it is adding the sixth generation (6G) line.
Comments from Kwon's meeting with around 70 analysts on Thursday were included in an email Lehman analyst James Kim sent to clients.
Lehman on Thursday cut its ratings on the Asian flat-panel display sector to neutral from positive, noting profitability had likely peaked in the first quarter, with margins seen weakening in the subsequent two quarters.
As part of its move, Lehman cut ratings on LG Display, and Taiwanese rivals AU Optronics (2409.TW: Quote, Profile, Research) and Chi Mei Optoelectronics (3009.TW: Quote, Profile, Research) to equal-weight from overweight.
LG Display, the world's second-largest maker of liquid crystal display (LCD) panels, posted a record quarterly operating profit of 717 billion won last month on a consolidated basis.
But falling TV prices have been cited by some analysts as a concern. LG Display shares are still down 14 percent since hitting a record in November 2007.
Kwon told analysts that overall TV panel shipment volume was decreasing, and cited LG Display customers, including former joint venture partner Philips Electronics (PHG.AS: Quote, Profile, Research), as experiencing weakening demand, according to the Lehman analyst.
"The CEO is confident that by strengthening its IT panel business, LGD would be able to stand well against potential oversupply in 2009. This is why LGD (LG Display) is adding a new 6G line," Kim wrote to clients. (Reporting by Rafael Nam; Editing by xxx)
Out of the Gate: LG Display slumps after downgrade
Friday May 16, 10:25 am ET
LG Display shares slump after Credit Suisse downgrades on stock price, new LCD production line
NEW YORK (AP) -- Shares of LG Display Co. fell sharply in morning trading Friday after Credit Suisse analysts cut their rating on the world's No. 2 maker of liquid crystal displays, citing a recent price rally and supply concerns.
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John Sung and Sang Hoon Kim cut LG Display to "Neutral" from "Outperform" in a note to investors Friday. The stock lost $1.69, or 7.1 percent, to $22.01.
The analysts said they are concerned about the stock's recent price rally, noting that it now outperforms its regional peers. Shares have jumped more than 18 percent since trading at a year-to-date low of 19.98 Feb. 5.
Furthermore, they said the company's plans to build a massive new liquid display production line could lead to a supply glut for the sector, as its competitors seek to preemptively defend or expand their market share.
"As we know, it often takes just one player to change the overall industry dynamics in a deeply cyclical commodity," Sung said.
On Friday, the South Korean company said it plans to spend 1 trillion Korean won, or $960 million, for a sixth-generation production line that will likely begin operations in the second quarter of 2009.
Shares of LG Display have lost nearly a quarter of their value from a 52-week high of $31.29 in November.
Boom times wane in oil-rich Venezuela - et af de fattige lande, der er ved at få problemer
Sunday June 8, 7:03 pm ET
By Rachel Jones, Associated Press Writer
Despite oil wealth, Venezuelan economy cools as inflation rises, growth slows
CARACAS, Venezuela (AP) -- Mirina Kakalanos has been forced to double prices at her family's shoe store in the last year. Customers turn away after browsing the pumps and sandals, but Kakalanos says she has no choice.
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"There is less money coming in, and more costs to cover," said the 40-year-old mother of three, whose Greek immigrant father opened the shop after moving to Venezuela in search of a better life. Now she barely makes enough to get by.
Boom times are waning in oil-rich Venezuela, even as world crude prices soar. Inflation is nearing 30 percent, the highest in Latin America, and annual economic growth slowed to 4.8 percent in the first quarter, a four-year low.
Analysts say President Hugo Chavez's economic policies are hindering private investment and growth just as he hopes to boost support ahead of November's regional elections. Many point to the economy as his Achilles' heel.
Already complaining of inflation and food shortages, voters last December rejected constitutional changes that would have allowed Chavez to run for re-election indefinitely -- his first blow at the ballot box, where he had enjoyed four straight electoral and referendum wins.
Inflation has been a familiar problem, but a newly slowing growth rate is making it a more urgent concern.
Chavez plans to announce a package of economic measures to boost growth in coming days -- and to name a new finance minister to lead the strategy, Information Minister Andres Izarra said.
Venezuela, the world's 10th-largest producer of crude, has seen its annual budget triple to US$63.9 billion (euro41 billion) since 2004 as oil prices soared. State oil monopoly Petroleos de Venezuela SA provides about half of the government's income.
Chavez pumped huge amounts of that revenue into social programs for the poor, flooding the economy with cash and fueling a consumer spending boom while banks increased lending.
Stanford University political scientist Terry Karl says oil booms always send growth soaring -- until an economy reaches what she calls an "absorption crunch."
"You just can't absorb that huge influx of money properly," Karl said. "You get problems with your prices, you get problems of supply. ... All those bottlenecks slow down growth and eventually create inflation."
Like many oil-producing nations, Venezuela has a history of inflation, which reached 103 percent in 1996, two years before Chavez was first elected.
As prices now climb again, Chavez's government has tried to tame the trend -- issuing US$4 billion (euro2.6 billion) in bonds in April to absorb excess cash, enforcing price controls on basic foods and holding the currency to a fixed exchange rate. It introduced a new monetary unit in January to boost confidence in its sagging "bolivar," and changed the way inflation is measured, incorporating data from smaller cities with less cash on hand.
The Central Bank embraced a more traditional anti-inflationary measure in March, raising interest rates on credit cards to 32 percent and on savings deposits to 10 percent to slow consumer spending.
But inflation is galloping, with rates of roughly 30 percent after running at nearly 20 percent a year earlier. And some of Chavez's tactics have backfired.
Price caps have caused sporadic shortages, as some food producers sought other, more profitable work. And foreign exchange controls make it harder for businesses to get dollars to buy imports, driving them to buy the U.S. currency on the black market, where it has sold at times for twice the official rate -- further inflating prices.
Investors complain that these restrictions -- not to mention the fear that their lands or companies could be taken over by the government -- are making it harder to do business in Venezuela.
Antonio Borguno has run a successful paint solvent plant in northern Carabobo state for 30 years. But when it came time to expand last year, he decided to build the US$4 million (euro2.6 million) plant in Panama.
"The economy is safer" there, he said.
Foreign direct investment fell to US$646 million (euro414 million) in Venezuela last year, about half its average for the previous four years, according to the U.N. Economic Commission for Latin America and the Caribbean.
Analysts warn that slowing flow of capital is a drag on the country's annual growth rate, which slowed to 4.8 percent at the end of the first quarter from 8.8 percent last year.
Chavez notes that Venezuela's growth handily beats the 0.9 percent annual gain seen in the U.S. in the first quarter. But developing economies typically grow faster: Latin America as a whole expanded by 5.6 percent last year, according to the International Monetary Fund.
On Sunday, Chavez urged businesses to invest in joint projects with his socialist government. "We want private capital to invest in Venezuela," he insisted, calling for an "alliance between the state and the private sector."
But more often, state investment has replaced private capital. Since 2007, Venezuela has nationalized its largest telephone, electricity, steel and cement companies and assumed majority control over four major oil projects. And political allies including China and Iran have pledged billions of dollars for joint investments.
That leaves some economists disputing the notion that Venezuela's economy is in trouble. "Nobody would complain in Latin America about 4.8 percent growth," said Mark Weisbrot, co-director of the Washington-based Center for Economic and Policy Research.
Chavez allies insist his government respects private property and deny plans for a state-controlled economy. They say more state spending is needed to distribute vast resources more fairly.
Many Venezuelans seem to agree: 56 percent polled in April said they considered Chavez's management positive for the country, even though only 27.6 percent described themselves as pro-government, with the largest group, 46 percent, describing themselves as neutral. The survey of 1,300 adults by Caracas polling firm Datanalisis had an error margin of 2.7 percentage points.
Still, polls show inflation is a top public concern, Datanalisis director Luis Vicente Leon said.
To boost buying power, Chavez raised the minimum wage by 30 percent to US$372 (euro239) a month in May. But analysts say that only fuels inflation, and nearly half of Venezuela's workers -- those employed in the informal economy -- will never see the wage hike.
For them, rising prices and slowing growth may yet prove too much to bear.
Yorbelis Suarez, 25, sells vegetables at an open market in Caracas, where she pays three times what she did in March for her stock.
She has always voted for Chavez, but as for whether she would again, she shrugged. "Not if things continue this way."
ANALYSIS: Game, LCD TV Ops Hold Key To FY08 At Sony
TOKYO (Nikkei)--Even as it failed to reach its goal of raising its profit margin to 5%, Sony Corp. (6758) managed to post a record group net profit for the fiscal year ended March 31, thanks to an earnings recovery in its electronics segment.
And for the current fiscal year, the company sees sales growing 1% to 9 trillion yen and operating profit jumping 20% to 450 billion yen. This will enable Sony to meet the 5% margin target, albeit a year after the end of the three-year business plan that set the goal.
The video game segment is expected to make a large contribution to Sony's earnings this fiscal year, as it is forecast to deliver a full-year profit after having dug a 124.5 billion yen hole in the previous year.
Related Stories:
• Recovering Sony Needs To Cut TV Costs To Offset Losses
• Sony Net Profit Nearly Tripled To Record Y369bn In FY07
• Sony Financial Sees Net Profit Down 12% In FY08 On Investments
• Sony To Double Dividend To Y50 In FY08 For 1st Hike In 11 Yrs
• Sony Shares Surge Nearly 10% On Solid Earnings, FY Outlook
By contrast, it is unclear whether televisions -- another money-losing operation from the previous year -- will be able to swing into the black. The loss in this business worsened by 50.5 billion yen from a year earlier to 73 billion yen in fiscal 2007.
Despite enjoying a top market share in the global LCD TV market, Sony has been unable to make its LCD TV business profitable. This is because "cost-cutting efforts could not keep up with declines in prices," Chief Financial Officer Nobuyuki Oneda told a news conference Wednesday.
Sony has set a target of boosting LCD TV sales by 60% to 17 million units in fiscal 2008. But some in the industry believe that even after this goal is met, the business will still lose money unless costs are reduced drastically.
Under the three-year business plan through fiscal 2007, Sony completed most of its streamlining measures, including factory consolidation, personnel cuts and asset sell-offs.
But the firm faces tough competition from strong market leaders, such as Matsushita Electric Industrial Co. (6752), Nintendo Co. (7974) and Apple Inc. of the U.S. Aside from turning the video game and TV operations into the black, Sony will need to cultivate new pillars of business.
How it intends to do so is expected to be revealed in its next business plan, due out this June.
jeg tror godt at sony kunne være en interessant investering, kursen har været flad omkring 50 dollar i 10 år, hvis man ser bort fra stigningen og faldet omkring 2000 IT boblen
Sony Swings To 4Q Profit As PlayStation Losses Decline
TOKYO (Dow Jones)--Sony Corp. (6758) swung to a profit in the fourth quarter as losses from the PlayStation videogame business shrunk significantly and it said it expected both videogames and televisions to become profitable this year.
Like other major exporters, the Japanese electronics maker will be hurt in the current business year by a much stronger yen, which diminishes the value of its overseas sales. The company gets nearly 80% of its revenue from outside of Japan.
But despite economic uncertainties, Sony said it has not seen a slowdown in demand so far and forecast increases in sales of Cybershot digital cameras and Bravia televisions.
It said it planned to improve its profitability in the current year in part by focusing on selling more lower-cost entry-level televisions.
"Things will be tough, but a big part of our sales will come from LCD (liquid-crystal display) televisions, which is a growing business," said Chief Financial Officer Nobuyuki Oneda in a news conference. "I don't think our forecast is overly ambitious."
For the fourth quarter ended March 31, Sony reported a profit of Y29.04 billion ($290 million) compared with a loss of Y67.56 billion a year earlier, when it was hurt by costs related to the PlayStation 3 videogame console and a big charge from the massive recall of its laptop computer batteries.
Quarterly sales fell 6.5% to Y1.95 trillion from Y2.09 trillion as sales of mobile phones and older products like traditional cathode-ray tube televisions, rear projections televisions and the PlayStation 2 videogame console fell.
For the fiscal year, however, its net profit nearly tripled to Y369.4 billion from Y126.3 billion, helped by gains from the initial public offering of its financial unit as well as the sale of some real estate.
Sales rose 7% to Y8.87 trillion from Y8.3 trillion a year earlier.
Thursday, May 22, 2008 7 Top Chipmakers To Cut Capital Spending By 21.8% In FY08
TOKYO (Nikkei)--Seven major chip companies plan to slash their combined capital investment by 21.8% in fiscal 2008 to 806.7 billion yen as some increasingly move away from memory chips to specialize in system chips.
This would mark a second straight year of declines after capital investment by the seven firms -- Toshiba Corp. (6502), Elpida Memory Inc. (6665), Sony Corp. (6758), Renesas Technology Corp., NEC Electronics Corp. (6723), Matsushita Electric Industrial Co. (6752) and Fujitsu Microelectronics Ltd. -- peaked in fiscal 2006.
A major reason behind the spending cuts is a move by Renesas, Fujitsu Microelectronics and others to withdraw from their memory businesses to shift resources to system chips, which entail smaller production scales and investment. System chips used in digital consumer electronics and other devices tend to be custom-ordered, thereby negating the need for output capacity increases among chip companies to stay competitive.
For this reason, Renesas plans to halve its fiscal 2008 capital spending compared with fiscal 2003.
"We are no longer pursuing a business model based on competing through output capacity," Chairman Satoru Ito says.
Instead, the company aims to bolster its operations by focusing on chipmaking devices capable of producing high-performance system chips with circuit widths of just 45 nanometers.
Toshiba, which specializes in NAND-type flash memory chips, has earmarked 367 billion yen for investment, equivalent to 45% of the total spending planned by the seven chip companies. The spending figure is about 10% lower on the year but the company plans to spend more than 1 trillion yen over a three-year period through fiscal 2010.
Meanwhile, major DRAM producer Elpida Memory plans to slash its capital spending by nearly 60% in fiscal 2008. It plans to hold down production increases in a bid to improve supply-demand conditions in the DRAM market, where prices have fallen steeply.
(The Nikkei Business Daily Thursday edition)
Domestic Manufacturers Sold 45% Of Their Goods Abroad In FY07
TOKYO (Nikkei)--Japanese manufacturers are increasingly relying on foreign markets, with the proportion of overseas to total sales continuing to march toward 50% in fiscal 2007, driven by strong growth in emerging economies and less developed nations.
In the year ended March 31, sales outside Japan accounted for a record 45% of total group sales among 994 listed manufacturers that disclosed such data, up nearly 10 percentage points over four years and 3 points higher than the previous year.
Including nonmanufacturers, 1,696 listed companies reported sales outside Japan, with the proportion of overseas to overall group sales coming to 29%, up 2 points year on year.
Food producers enjoyed particularly strong growth abroad, with sales outside Japan making up 20% of their total tally, an increase of 9 points.
Ajinomoto Co. (2802), for example, has been expanding sales of seasonings in Brazil and Africa. "Unlike Japan, whose market is shrinking, it's easier to secure profit margins there," President Norio Yamaguchi said.
Japan Tobacco Inc.'s (2914) acquisition of U.K. tobacco firm Gallaher Group Plc also contributed significantly to higher foreign sales.
Textile companies, which had been suffering from competition with Chinese rivals, also boosted overseas sales to account for 34% of their total, up 3 points on the year. Exports of functional fibers and industrial-use carbon fibers have been growing at Toray Industries Inc. (3402) and Mitsubishi Rayon Co. (3404).
Among producers of everyday products, Shiseido Co. (4911) and Unicharm Corp. (8113) have been expanding operations in Asia. The three leading firms in that industry such as Kao Corp. (4452) generated a record 32% of their sales outside Japan.
Sony Corp.'s (6758) sales of digital cameras and flat-panel televisions have been growing in emerging economies.
In addition to major emerging markets, such as Brazil, Russia, India and China, Japanese firms are boosting sales in less developed countries and regions. Komatsu Ltd. (6301), for instance, saw its sales in the Middle East and Africa jump 40% in fiscal 2007. And Daikin Industries Ltd. (6367) has been increasing air conditioner sales in the Middle East and South America.
Among export-driven businesses, automakers raised their proportion of overseas sales by 2 percentage points year on year to 68%, while electronics makers secured more than 50% of their sales outside Japan for the first time.
Such firms as Honda Motor Co. (7267) and Hoya Corp. (7741) now earn 70-80% of their operating profits abroad.
Companies with Highest Overseas Sales Ratios
Rank Company Overseas Sales
Ratio to Total Sales
1 Honda Motor 86.8%
2 Makita Corp. 84.8
3 Brother Ind. 82.7
4 TDK 82.4
5 Mitsubishi Motor 81.8
6 Nintendo 80.6
7 Nissan Motor 79.8
8 Komatsu 77.5
9 Sony 76.8
10 Toyota Motor 76.7
Note: Figures are for fiscal 2007. Ranking covers companies with group operating profits of more than 50 billion yen
Electronics maker NEC's profit more than doubles
Thursday May 15, 5:04 am ET
By Yuri Kageyama, AP Business Writer
Electronics maker NEC's profit more than doubles on mobile phone, chip sector recovery
TOKYO (AP) -- NEC Corp.'s profit for the fiscal year through March more than doubled from the previous year as the Japanese electronics maker's mobile phone and computer-chip businesses swung to profit.
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NEC, which did not provide numbers for the quarter, reported Thursday a 22.68 billion yen ($216 million) profit for the fiscal year ended March 31 -- a dramatic rise from 9.13 billion yen profit the previous year.
Fiscal year sales inched down 0.8 percent to 4.617 trillion yen ($44 billion) from 4.653 trillion yen.
NEC said sales dropped in electronic parts and in its personal computer business in Europe.
But costs cuts and other efforts buoyed profit, the company said. NEC's cell phone business had been losing money overseas, and its decision to withdraw from the overseas market in that sector stopped the red ink, it said.
The Tokyo-based maker of computer and network equipment is projecting a continuing recovery for the fiscal year through March 2009.
NEC expects profit for the year to surge 54 percent to 35 billion yen ($333.3 million) and sales to climb 4 percent to 4.8 trillion yen ($45.7 billion).
NEC shares rose 5 percent to 551 yen ($5.2) Thursday in Tokyo. Earnings were announced shortly after trading ended.
NEC is the latest Japanese electronics maker to report healthy earnings.
Sony Corp. shares jumped 9 percent in Thursday trading in Tokyo, a day after upbeat earnings that included a record fiscal year profit.
Matsushita Electric Industrial Co., which is changing its name to Panasonic next month, saw its fiscal year profit gain 30 percent on year on strong sales of cell phones, flat-panel TVs and DVD players. It reported its annual earnings at the end of April.
The heat is on. With Apple's(AAPL - Cramer's Take - Stockpickr) highly anticipated iPhone2 announcement expected early Monday afternoon, rivals aren't standing still.
I've seen a number of new phone designs that will hit the market in the next few days/weeks. I'm actually playing with a very nifty "iPhone killer" from another manufacturer as I write this.
But this rivalry is now being played out as a war of words -- with the billion-dollar spoils going to the victor. I guess that's why I've just received an email from the Windows Mobile Update team at the WeberShandwick public relations firm.
In it, I was informed that Microsoft's(MSFT - Cramer's Take - Stockpickr) Mobile Communications Senior Vice President Andy Lees has "reached out to Windows Mobile's ecosystem of partners" to highlight the great success they have achieved as they continue their mission to put a "smartphone in every pocket."
That ecosystem includes 160 mobile operators in 55 countries, 50 handset makers, and scores of developers, who jointly have created and built on an open platform "that delights customers."
Andy Lees' letter includes the following facts:
We also sold more in the previous four quarters than [Research In Motion](RIMM - Cramer's Take - Stockpickr), and in the last quarter our year-over-year unit growth alone was greater than sales of Apple's iPhone.
IDC expects Windows Mobile OS phones (will) continue to annually outsell Apple iPhones in both consumer and enterprise shipments, and by 2012, Windows Mobile is expected to double sales over iPhone in the consumer space, and have nearly nine times the amount of enterprise deployment.
With more than 18,000 applications to choose from, Windows Mobile applications were the most popular downloads on Handango.
With 25 Windows Mobile 3G phones worldwide, and unmatched number of form factors, Windows Mobile provides consumers and businesses with what they need -- choice and freedom.
Now, I'm not going to argue the validity of these points. I'm sure that if Microsoft and WeberShandwick say this is so, it must be true.
But, I do question the timing. If this had been announced a few days or even weeks ago, it wouldn't seem like a desperate attempt at getting some publicity just before the release of the iPhone.
The successes described above may be valid -- but they're valid up until Steve Jobs's speech at the Apple Developer's Conference at 1 p.m. Eastern time on Monday.
Notice that most of the bullet points are written in the past tense. That's because once Mr. J tells us about the new Apple phone design(s), every smartphone that came before it is past history.
I'm sure there are bold, new and innovative Windows Mobile phones in the works, but this coming week -- and in the near future -- it's the iPhone2 show.
Two new RIM BlackBerries (Bold and Thunder), a slew of Google's(GOOG - Cramer's Take - Stockpickr) Android-based phones, the Sprint/Samsung Instinct, Garmin's(GRMN - Cramer's Take - Stockpickr) Nuviphone, Sony/Ericsson's(SNE - Cramer's Take - Stockpickr) Xperia will be getting a slew of press. I really haven't heard much about new Windows Mobile designs.
Don't get me wrong. I've used and really like the Windows Mobile OS. In a previous life, my employer preferred this system over BlackBerry. TheStreet.com uses BlackBerry. I can honestly tell you, from experience, that both systems are terrific.
But, iPhone has the buzz and BlackBerry is the current leader among the business community -- and therefore gets some interesting perks, such as the software announced on Friday by E*Trade(ETFC - Cramer's Take - Stockpickr). The new E*Trade Mobile Pro allows customers to monitor portfolios, get real-time stock quotes and conduct trades from their BlackBerry. The software is free, and very cool.
Look, it's great to have many smartphone choices, but timing is everything. I think the Windows Mobile people should speak softly at the moment -- and let their handsets do the talking.
ja de har trukket gardinet ned for vinduet
jeg har igennem længere tid haft vanskeligt ved at finde de rigtige data for tyrkiet, fordi den tidligere statistiske side ikke bliver opdateret nmere og nationalbanken er ubrugelig
men nu har jeg så fundet den statistiske side i en ny udgave og den var næsten umulig at finde ud af, men til sidst lykkedes det så
de løbende data jeg har fået sporadisk har tegnet et helt forkert billede af tyrkiet, især bilsalget, men også den samlede vækst
bilsalget kan være svært at finde ud for almindelige mennesker, for i summern indgår motorcykler og ellers er der både personbiler, mindre trucks typisk pickups og små varevogne og så trucks, som man glemmer at tage med
summen er at der i marts er solgt 60.000 biler, hvilket svarer til 720.000 på årsbasis
hvilket fortsætter det høje niveau i de senere 3-4 år
og den samlede eksport og import i april og jan-april stiger ca 40% og i april 11.5 mia i eksport og 18 mia i import så niveauet og væksten er højt og ligger på niveau med brazilien, indien og rusland
men produktionsstatistikkerne passer ikke
fordi deres vægtning af de enkelte sektorer er forkert
deres eksport af biler er eksploderet så de producerer omkring 1.2-1.5 mio biler med en eksport og importstruktur, der er sammensat af at de producerer nichemodeller for de store bilfabrikker så de importerer næsten hele deres bilsalg og eksporter det meste af deres bilproduktion, altså ikke meget produktion til hjemmemarkedet
men derfor er vægtningen af bilsektoren med ca 5% af den samlede produktion alt for lav
og hårde hvidevarer og diverse forbrugerelektronik, der produceres og sælges meget af med store vækstrater vægtes næsten slet ikke
så de gamle sektorer, fødevarer med 10% hvilket virker rimeligt, men tekstil og tøj med 15-20% + petrokemi, hvor en del sikkert er tekstilfibre og raffinaderier mm på 20 virker som en forældet beregning selvom tyrkiet jo startede op med udviklingen som storeksportør af tekstiler, men så stor en andel tror jeg ikke den har mere, så man har ikke opdateret vægtningen af sektorer, hvor produktion af råvarer, energi, maskiner, stål, metaller mm nærmest ligger på et mikroskobisk niveau, der slet ikke kan tælles med i den samlede beregning
så det er altid spændende at finde statistikker for et land og det boomer kraftigt i tyrkiet, meget mere end det de officielle data indikerer
jeg kan ikke copy paste fra dem, da de går ind på noget, der ligner excel, men alligevel anderledes og jeg kan ihvertfald ikke finde ud af at copy paste det
men jeg er jo også så dum vil humle nok sige, man gør da bare sådan og sådan
panels tirsdag apr 22 2008 12:30
AU Optronics (NYSE:AUO) , the world's third-largest flat panel maker, has confirmed that demand from emerging markets helped pull the industry out of last year's slump.
The Taiwanese company said net profit for the three months to March 31 was T$26.99bn (US$890m), or T$3.41 a share, reversing a T$5.11bn loss in the same period last year.
The company achieved its second-highest quarterly profit ever, although the rapid depreciation of the US dollar and the expensing of employee bonuses - legally required in Taiwan since the beginning of the year - weighed on profits. AUO's showing follows a reversal from a year-earlier loss to a Won717bn (US$718m) net profit at its larger peer, LG Display earlier this month.
kul
While crude oil prices has been spasming (trying to find a direction) the last few days after hitting an all time high last week, coal continues to march ahead. globalCOAL’s NEWC weekly index reports coal trading at $138.35/tonne for the week of May 23 versus $134.85 the week before. The record high was $139.16 back on February 15th.
Problems on both the supply and demand sides continue to support higher coal prices:
China continues to be forced to close power plants due to shortage of coal. Current coal supplies will only last for 3.1 days of power generation which is much lower than the 7 day minimum supply usually needed.
Export train from Colombia’s Cerrejon mine was derailed on its way to Puerto Bolivar due to terrorist attacks.
Bottlenecks at Australia’s Newcastle port has caused coal exports to decline by 18%. Furthermore, queue of coal ships waiting to carry the coal has increased, tying up coal ships for 13.5 days while waiting to load coal versus the 0.38 days average loading time for general cargo ships.
More Coal news at globalCOAL
These supply and demand problems should continue to act as a driver for coal and all of coal’s supporting infrastructure. Even as coal stocks are at or near all-time highs, coal miners like Arch Coal (ACI), Patriot Coal (PCX), and Peabody Energy (BTU) can still be bought on dips. Likewise, methods of transporting coal such as the rails, barges like Kirby (KEX), and dry shippers should still have momentum. Finally, coal mining equipment makers Joy Global (JOYG) and Bucyrus (BUCY) has products that are in high demand to continue to open new mines and bring out coal.
No need to chase these. This is just to highlight how real the problems with coal and power generation is. The bottlenecks at ports like Newcastle won’t be fixed overnight, or even over a year, as whole port cities might need to be constructed and railways built in order to get all the coal out. In China, even with the earthquake temporarily knocking out several provinces and thus their energy use, China is still 4 days short of coal. For a country that big, it will take a lot of coal just to bring coal supplies back to that 7 day minimum (not even a slight surplus for rainy days). Meanwhile, summer is approaching and U.S. utilities will be fighting the foreign buyers as U.S. utilities try to keep their requirements of coal from being exported.
solar
In early February 2008, I wrote this article giving my thoughts on 11 solar stocks. As you will recall, the stock market was hurting in January, and so were the solar stocks. In that article, I opined that the high-PE stocks in the group - First Solar (FSLR), SunPower (SPWR), and Suntech (STP) - were overpriced, while two were underpriced and screaming “BUY ME.” I further opined that if the market is truly rational, the investment returns on the low-priced stocks would exceed the returns from the high-PE stocks.
In that first article, I submitted a table I had put together, which calculated forward PE’s for 10 stocks in this space. The table is set out again below, with updated data as of yesterday’s close. As you can see, the market has been largely—but not completely—rational.
Canadian Solar (CSIQ), my favorite stock in January, is up a whopping 119% in a little over 4 months, its PE having increased from a ridiculously-low 11 in January to a more reasonable-but-still-attractive PE of 16 now. My second favorite stock in January—Trina Solar (TSL)—has turned in a respectable performance—up 36% as of yesterday, although it is down today. TSL released “interesting” earnings today and will be discussed in greater detail below.
ReneSola (SOL) actually IPO’ed (at $13.00) after I wrote my article and has also done very well—up 87% since January.
On the other hand, if you average the return on the three high-PE stocks I panned in January, you get an average return of 12%, with one of the three (STP) actually having dropped further since the pretty bad baseline in January.
FSLR did go up pretty substantially (49%), but far, far less than my favorite, CSIQ. Indeed, I believe FSLR is living on its previous laurels and momentum generated by all of its boosters in the investment community. I expect these high-PE stocks to continue to underperform their low-PE brethren going forward.
What has happened is precisely as it should be, in my opinion. FSLR is predicted to double its earnings between 2007 and 2008, and STP and SPWR aren’t even expected to do that, yet they trade at forward PE’s of 26 to 88. On the other hand, CSIQ and TSL are expected to more-than-double THEIR earnings in 2008, and yet their forward PE’s are 16-17. Of course, after today’s earnings report from TSL, I think the consensus for TSL earnings in 2008 will go up at least 10-15% from $3.16 to, putting TSL’s PE at about 12-13.
Solarfun (SOLF), Yingli (YGE) and JA Solar (JASO) trade at PE’s of 20-25, and I do not believe they offer more compelling values compared to TSL and CSIQ that would justify those higher PE’s. If a reader knows of a significant advantage one of these three has over TSL or CSIQ, please comment about it.
In my view, although SPWR is clearly the technology leader in the group today (they are cranking out 22% efficiencies in the lab, and are selling 19.3% efficient panels commercially), its growth rate has definitely decelerated. Indeed, on the conference call some weeks ago, SPWR indicated that revenues in Q2 of this year will be flat with Q1 (whereas TSL, for example, is guiding to about a 40% sequential increase in revenues). In my view, even given its technological prowess, and although it deserves some premium, SPWR is overpriced at a forward PE of 37. This is especially true given the fact that SPWR won’t even double earnings this year, while both TSL and CSIQ are expected to more than double their earnings. In addition, I believe other companies will substantially narrow the efficiency gap in the next year or two, decreasing SPWR’s relative advantage.
Suntech Power (STP) is also slowing in growth, with earnings only expected to go up 50% this year. I panned STP in January because I thought it was overpriced at its PE of 31, and I still think it is overpriced at a PE of 26, compared to CSIQ and TSL at about 14.
As to FSLR, I didn’t like its prospects in January, and I don’t like them any more now. For any company to justify a forward PE of 88, it has to be able to more than double its earnings on an annual basis for several years into the future, usually because it has a proprietary product or service for which there is no meaningful competition (think Microsoft OS’s in the distant past, although even in those days, I don’t think MSFT garnered forward PE’s of almost 100).
Although FSLR will probably double earnings this year, I doubt it will do so next year and the year after that. The expectations are so high that one tiny stumble and all of a sudden, FSLR no longer merits a forward PE of 88, and contraction of the multiple will hurt the stock price, or, at the very least, prevent any increase in stock price. One need not look far to find examples of this—look at STP and SPWR, both of which are trading at about half of their 52-week highs (AAPL and GOOG are two more examples of fabulous companies who got knocked down because they failed to meet continuing outrageous expectations—and they “only” trade at forward PE’s of 30 or so).
Frankly, I would not even pay a forward PE of 40 for FSLR, and here’s the reason why not:
The KEY reason FSLR is worth more than the other solars TODAY is because it is the price leader in terms of cost per watt. But there is only one reason for that price leadership—which is that polysilicon is priced in the hundreds of dollars per kilo, whereas within 2 to 3 years, it will be priced in the dozens of dollars (and not that many dozens at that). Since poly is the #1 manufacturing cost for FSLR’s competitors, an 80% decrease in the cost of poly (from, say, $250 to $50)—as is likely to occur over the next several years—will go very far towards eliminating FSLR’s cost advantage. Keep in mind also that FSLR also has one cost DISADVANTAGE that its poly brethren do NOT have—FSLR has to build TWO panels in order to generate the same amount of electricity that a SINGLE poly-based panel will make. That will double FSLR’s cost for aluminum, glass, manufacturing and other costs to build that extra panel.
When you take this into account, I would not be surprised if in three years, a single poly-based 300-watt panel costs no more to make than (2) 150-watt FSLR thin-film panels. And all things (including price) being equal, who wouldn’t prefer ONE 300-watt panel versus TWO FSLR 150’s? In other words, FSLR’s panels will actually have to be at least 15-20% cheaper just to induce purchasers to buy them because the amount of room they require and the extra installation costs will have to be compensated for.
Finally, how much upside is there for a company—any company—with a market cap of $20 billion? I simply don’t see 2-bagger potential for FSLR in the next year, whereas CSIQ and TSL with market caps of around a billion could double or triple in a year or two and still have a market cap FAR less than HALF that of FSLR TODAY. Another way to see this is to look at the price targets for FSLR, which range up to maybe $350 (I don’t follow this closely, so maybe I am wrong here). That gives FSLR an upside of maybe 40%. In contrast, if later in 2008, it looks like TSL will make $5.00/sh in 2009 (consensus before earnings release today was $4.19—see further discussion below), and by the end of 2008, TSL’s PE expands modestly to 18 against 2009 earnings, the resulting price of $90 represents a 2-bagger from the current trading price around $46.
In conclusion, I believe that the solar space will grow vigorously over the next decade, and I believe that at the present time, TSL and CSIQ continue to offer the best risk-reward ratio in this space. I do believe it’s difficult to look very far out (ie, beyond 2009) because I think by 2010, disruptive solar technologies (CIGS or other thin-film PV, concentrating photovoltaic, etc) will be sufficiently commercialized that they may present very serious competition to the polysilicon-based panel producers, but at this point in 2008, TSL, CSIQ and SOL offer the best prospects.
Finally, I want to discuss TSL’s earnings announcement this morning. The earnings headline number was $12.9 million, or 51 cents per share, slightly exceeding consensus of 48 cents, and substantially less than last quarter’s 62 cents. Not surprisingly, investors who did not look under the hood sold TSL today, causing it to drop to about $46 as I write this.
If one looked under the hood, however, one would discover a charge of $4 million against earnings due to “remeasurement of the non-US dollar denominated obligations in the US dollar functional currency”—whatever this means. In the absence of this weird charge that is apparently related to an accounting change that occurred for the first time this quarter, earnings would have been 67 cents. To put it a different way, if this accounting change had occurred next quarter, TSL would have announced earnings of 67 cents and the stock would be at $55 now rather than $46. Amazing how such an unanticipated and seemingly trivial decision can have such major impact.
Also, TSL paid over a million dollars in income taxes this quarter versus a tax benefit of half a million last quarter. Making a further adjustment for this would yield “operational” earnings (ie, earnings based on the sales and profit margins rather than currency exchange and income taxes) of about 75 cents this quarter.
More importantly, guidance for this year was increased—with operating margins of 15-17% expected on revenues of $770 to $808 million. Taking the midpoint on sales and margins ($789 million times 16%) yields operating income for this year of $126 million. Utilizing the same interest cost and exchange losses as just reported but annualizing them equals a cost of about $24 million and taxes at 4.92% (announced on the call) adds up to $6 million, yielding earnings in 2008 of $96 million, or $3.79/sh, yielding a PE of about 12 against the current trading price of about $46.
I believe that the analysts will go through the same math I have just done and that earnings estimates for both 2008 and 2009 will be increased by at least 10-15% in the next few days. Therefore, to me, TSL where it is trading now ($46) is a buy, not a sell.
To those not familiar with the solar space, I must close with a few cautions. First, solar stocks are EXTREMELY volatile, with 20% daily moves NOT unusual. So if you do not have the stomach for seeing your position lose 20% of its value in one day, solar may not be the place for you. Second, the solars have gone up a lot in the past few weeks, and there is a good argument to be made that they need to slide back before they go back up as we anticipate the next earnings season beginning next month. Third, there is reputed to be a psychological connection between oil prices and the solar stocks. To me, this was more of a factor in the past than it is now, but it remains a factor. Thus, if oil slides back from the $120’s, it may take the solars with it. Fifth, some people believe that the stock market in general may be heading back to 12,000 or even below to retest the Jan and March lows, and obviously, such a move may well impact the solars (although the solar often don’t follow the broader market on a day-to-day basis).
On the positive side, I think that there is a fair possibility that in the next few months, Congress may pass an energy bill that will extend the old incentives and create some new ones. Although some of that is already baked in, I believe the passage of this bill may move the solars up another 5-10%. Finally, especially if oil and gas hold up or even go higher, I believe that over the next few months we’ll hear more about factors that will be pro-solar—such as carbon-capture, increased state incentives spurred on by increases in the cost of electricity (due to higher costs of coal and natural gas) and due to environmental concerns, etc.
Whether the “bullish” forces I have discussed above beat the “bearish” ones, I cannot say. But if you are comfortable with the volatility and other risks discussed above, I think that TSL is a buy at $46 or $47 and CSIQ is a decent buy under $40.
AU Optronics' (AUO) valuation is bordering on the absurd. A company growing strongly in a great market shouldn't be trading at less than 6x earnings. Estimates have increased 19 cents over the past month. Two of the five covering analysts have raised their numbers.
Full Analysis
AU Optronics Corp. engages in the design, development, manufacture, assembly, and marketing of thin film transistor liquid crystal display (TFT-LCD) panels and other flat panel displays.
The company's TFT-LCD panels are used in computer products, such as notebook computers and desktop monitors; consumer electronics products comprising mobile devices, digital cameras, digital camcorder, car television, car navigation systems, portable televisions, multiple function machines, printer displays, portable game consoles, and portable digital versatile disk players; and LCD televisions.
AUO recently announced a plan to set up a T$1.5 billion ($50 million) company making light emitting diode [LED] backlights for displays. The move aims to help the company secure supplies of LED backlights, a key component for thin liquid crystal displays, the company said in a statement to the Taiwan Stock Exchange.
The company blew the doors off of its first-quarter earnings report. It came in with earnings of $1.12 per share, 133% above the estimate of 48 cents. Strong demand for flat-screen TVs lifted prices for its displays.
Mr. Max Cheng, Chief Financial Officer and Spokesperson of AUO noted that while Q1 is low season, AUO was able to hit the 2nd record high in its quarterly profitability, bringing net income to nearly NT 27 billion, which represented 18.5% sequential decline but a remarkable improvement from a net loss of NT 5.1 billion in 1Q2007.
Unbelievably Cheap
The valuation on AUO is ridiculously cheap. It is currently selling for 5.8x current-year estimates of $3.38 per share. Those estimates have increased 19 cents over the past month. Two of the five covering analysts have raised their numbers.
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hvor kan man købe asustek og acer, acer har jeg fundet i london, men ikke asustek
TAIPEI (Reuters) - When 17-year old Yuna Hua bought a new notebook computer for school, she chose a smaller, lighter and cheaper one to replace her bulky and expensive laptop.
Like many consumers, Hua reckons she doesn't need a $1,500 laptop for her everyday needs.
"It's a lot less expensive and much easier to use and carry," said Hua, a high school senior, who uses her notebook mostly for homework, surfing the Internet and games.
For around a quarter of the price of a regular notebook, PC makers such as Acer Inc (2353.TW: Quote, Profile, Research) and Asustek Computer (2357.TW: Quote, Profile, Research) displayed simpler laptops -- called Netbooks, or low-cost PCs -- at this year's Computex trade fair in Taiwan, hoping to open up a new market and bolster the fortunes of PC makers as an economic slowdown curbs spending.
Market leaders Hewlett-Packard (HPQ.N: Quote, Profile, Research) and Dell (DELL.O: Quote, Profile, Research) are expected to follow suit with similar ultra-portable models in the second half of the year, analysts said.
"You can easily double the market size of notebooks with this device," Acer President Gianfranco Lanci told Reuters.
Some analysts say these low-cost computers, which range from 7-10 inches and weigh about 1 kilo, could end up replacing regular notebook PCs, but they agree these new PCs have also opened up the computer market to more first-time buyers.
"There is now a huge population out there in emerging markets that can afford these laptops. They may be cannibalizing some of the current notebook market, but it's also expanding the market very, very quickly," said JP Morgan analyst Alvin Kwock. Continued...
Kwock added that global shipments for low-cost models should hit 10-15 million units this year, and selling prices would range between $300-$500.
But other analysts were not as optimistic.
"We think it's just unrealistic. The notion of targeting these products to emerging markets is false, since most people there won't be able to afford it, and the people who can would rather buy a traditional laptop," said Bob O'Donnell, vice president, clients and displays, at data company IDC Corp.
Acer's Lanci told Reuters he expected shipments of low-cost PCs to reach 40-45 million units in 2009, while chip giant Intel (INTC.O: Quote, Profile, Research) said it would not be surprised to see sales top 50 million units in 2011.
Asustek Computer aims to sell 5 million of its Eee PCs this year, and 10 million in 2009, while Acer predicts sales of 15-20 million of its Aspire One laptops next year.
IDC said growth is still strong in traditional notebooks, and only expects 3.5 million low-cost PCs will be shipped this year, rising to 9 million in 2012.
"We're being extremely conservative on this market. I can see these products being attractive to students and women who want to be able to fit a PC in their handbag, but so far there's just been an industry over-hype," said IDC's O'Donnell.
"I'd definitely buy it as a second PC, since it's easy to carry around and the screens are much bigger than a Blackberry or PDA -- its just easier to see," said Florence Koh from Singapore.
Most of the new low-cost laptops, running on Linux or Windows XP operating systems, will be in stores this summer, and some analysts say they could resurrect a flagging PC market.
"They have set these products at a fair price range, and I can see many people finding it attractive," said Jonathan Dee, General Manager of NetEssentials from Philippines, as he strolled down the aisles of the computer show.
According to IDC, notebook shipments, including low-cost PCs, are expected to hit 145 million units this year, up 34.5 percent from last year as consumer demand remained strong in Europe and Latin America despite a slowdown in the U.S. market.
Growth for 2009 is seen slowing to 24.9 percent, hitting 181.5 million units, said IDC.
opsvinget i teknologi trukket af de fattige landes vækst ser ud til at være i fuldt sving oså for flatpanels sektoren
TOKYO, May 22 (Reuters) - Taiwan's AU Optronics (2409.TW: Quote, Profile, Research), the world's No.3 LCD maker, said on Thursday that robust demand for computers and LCD TVs is likely to cause a tight supply of panels soon, and new PC models will further drive growth into next year.
Despite concerns over a slowing U.S. economy, research firm DisplaySearch has said demand for laptop PCs that use liquid crystal displays (LCDs) will be strong from emerging markets, including China, Brazil, Russia and India, in the next two years.
"We've been watching subprime, inflation and oil prices ... but the recent U.S. economy looks better, we are cautiously optimistic," AU (AUO.N: Quote, Profile, Research) Chief Executive Officer H.B. Chen told the Reuters Global Technology, Media and Telecoms Summit. "For the second half, we know the third quarter is a hot season, so supply will be a bit tight," said Chen, whose company supplies LCDs to top PC sellers such as Dell Inc (DELL.O: Quote, Profile, Research) and Hewlett-Packard Co (HPQ.N: Quote, Profile, Research) and some TV brands.
Chen's forecast came one month after AU posted its second best quarterly profit for the first quarter, while AU has said it expects shipments and prices of PC and TV panels to be mixed in the second quarter, with PCs faring better.
All the company's laptop LCDs will be illuminated by LED backlights, which save more power than the conventional cold cathode fluorescent lamps (CCFLs), by 2011, as part of its efforts to make environmentally friendly products.
AU expects strong demand for flat panels for smaller monitors that can show high-definition TV programmes -- known as moniTVs -- whose screen sizes range from 15 inches to 32 inches.
"The trend is moving to bigger screens, but we will not focus only on larger size," said Chen, who expects global demand for moniTVs to double to 50 million units next year from this year. Continued...
Major LCD players have learnt a lesson from the last downturn, when over-optimistic producers flooded the market with too many panels, and are focusing on moderating spending plans and cutting costs.
AU will allocate at least T$100 billion ($3.3 billion) for its capital expenditure in each of the next two years, compared with this year's forecast of T$140 billion, but the budget can be adjusted depending on market conditions.
"We have a buffer to do that and the bottom line is if we are still profitable then we have more room to invest," Chen said.
In Taipei, AU shares closed up 0.5 percent on Thursday, defying a 0.1 percent fall on the main TAIEX index.
Competing with two bigger South Korean rivals, LG Display (034220.KS: Quote, Profile, Research) and Samsung Electronics (005930.KS: Quote, Profile, Research), AU has announced a longer-term plan to build a new factory using more advanced 10th generation or higher technology for making LCDs.
Chen said there will be a small-scale production by 2011 or 2012 but it has not yet decided on the glass size.
But this year, there's a concern about the impact from the deadly earthquake in China as the market had bet that the Beijing Olympic Games in August is set to fuel demand for LCD TVs.
"Sentiment wise, we have some concerns over the uncertainty," Chen said. "In 2009, maybe to early to say now, but we are not too pessimistic." ($1=T$30.5) (Additional reporting by Kirby Chien; Editing by Louise Heavens) (For more on the Reuters Global Technology, Media and Telecoms Summit, see [ID:nL1919425]) (For summit blog: summitnotebook.reuters.com/) (Editing by Louise Heavens) ((baker.li@reuters.com; +886 2 2508-0815; Reuters messaging:
AOMORI, Japan - Nations should fight rising oil prices by cutting subsidies and vastly increasing investment in energy, while oil-producing countries need to ramp up output and divulge more information about how much they produce, the U.S. energy secretary said Saturday.
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Samuel Bodman, attending two days of meetings in northern Japan among energy chiefs from Group of Eight industrialized countries and other top economies, said the surge in world oil prices was largely a simple problem of supply and demand.
Production has stalled since 2005 at 85 million barrels a day, while economic growth — particularly in China and India — has pushed demand ever higher, Bodman said before a meeting of ministers from the U.S., Japan, South Korea, India and China.
"We're in a difficult position where we have a lid on production and we have increasing demand in the world," he told a small group of reporters, dismissing the effects of speculation and unclear inventory levels and other factors on oil prices.
"I would devoutly hope we ... see a reduction of the use of oil in the world on the one hand, and an increase in the supply so we can see some mitigation in the pressure on price," Bodman said.
Oil prices made their biggest single-day surge on Friday, soaring $11 to $138.54 on the New York Mercantile Exchange, an 8 percent increase. That followed a $5.50 increase the day before, taking oil futures more than 13 percent higher in just two days.
While demand has increased as supply has stalled, analysts have also cited the decline of the U.S. dollar, fears about the long-term supply of oil, and aggressive speculation as factors in rising prices.
Bodman said he would likely urge China and other countries at the Japan meeting to slash fuel subsidies, which make gasoline cheaper for consumers — thereby giving them no reason to reduce consumption and allow prices to level off or drop. The International Energy Agency has estimated that oil subsidies in China, India and the Middle East in 2007 totaled some $55 billion.
At the same time, he urged nations to pay heed to an IEA report that the world needs $22 trillion investment in energy supply infrastructure by 2030 to meet rising demand, while developing alternative energy sources.
"We have a situation where we have these high prices and the only solution is to diversify your resources, diversify your sources of fuel," he said, listing nuclear energy, natural gas and renewable sources such as wind and hydropower.
Lack of transparency in the oil market has also been cited as a possible cause of higher prices. Bodman said that while the United States and host Japan have been "diligent" in disclosing production and consumption data, some other countries need to do more.
Proponents of such transparency, including the IEA, say greater disclosure of accurate statistics helps markets set prices that more precisely reflect supply and demand. Underreporting of production, for instance, can drive prices higher as traders think supply is lower than it actually is.
Rising prices were having a negative effect on world economies. The U.S. government, for instance, reported on Friday the nation's unemployment rate rose to 5.5 percent in May, a monthly rise of half a percentage point, the biggest in 22 years.
Bodman said economic troubles because of high prices would only hurt oil producers.
"It's not good for producing nations to see the U.S. struggling economically. They depend on us to be a significant engine in world economic activity," Bodman said.
if you want to follow or paticipate on our board, it is OK, that we sometimes write in english
may be the problems you talk about in the usa, they exist everywhere
i try to find the facts and the empirical background for analyzing economic developments and individual stocks
and just accept that the world is not perfect and some products have a low quality in some countries - a hot topic here
compared to the usa we in europa are much too concerned about welfare and ourselves and do not want to take responsibility for world matters
there i feel usa is much better even while many disagree with what they do but i feel really that usa is fighting for freedom and democracy in the whole world and that their capitalist strength mean
that they are heaviliy involved in the whole world economy in a way that benefits the american society enourmoursly as they produce a lot of goods abroad and sell them there too but that they are owned by american companies/investores and thus makes america rich as they make money from these activities abroad
the whole technology sector is an example, most technology companies in the USA produce abroad and sell much nore abroad than at home, but they are still american companies earning more money at home from management of the outsourcing process, - europe and japan is way behind that so the boom in the world right now is going to benefit usa enourmously, the economy will surprisingly recover soon, if it has not already recovered and unemployment data is a lagging indicator that only turns up sharply 1½ years after the recession has started
but there are so many topics in that area, that i think we should not touch more on that now
but you are welcome to write in english and we will try to make som english written remarks
humle - det var den her kinesiske aktie, jeg nævnte forleden
kan du ikke undersøge den, du ved jo hvordan et skib ser ud
faldet fra 0.8 til 0.3 pga et marginalt underskud
men underskuddet skyldes at de har købt et skibsværft i kina, der er igang med at bygge 4 dokke til skibe på 300.000 DWT
de har leveret de første 2 skibe i slutningen af 2007 og venter at levere ca 10 i 2008 og har ca 20 i ordre, jeg husker ikke præcist det sidste tal
de regner med omfattende ship repair aktiviteter
og så har de 7 VLCC skibe, der jo fik svage rater i det meste af 2007, men raterne er jo skyrocked, så det kunne være en overset tankskibsaktie og værftaktie, der også har en snes mindre produktankskibe og et par aframaxer
ellers leverer de bunkerolie i asien, bl.a. singapore og har store anlæg med tanke og distribution af naturgas incl likvid naturgas, men det kan jeg ikke rigtigt gennemskue, kun at de tjener godt i den afdeling og noget offshore med FOS skibe
den kunne jeg godt forestille mig er undervurderet i forhold til potentialet især hvis tankraterne ikke falder alt for meget tilbage
http://finance.yahoo.com/q/bc?s=1192.HK&t=my
hyggeligt at hilse på dig
jeg har en del kunder i californien og investerer normalt meget i amerikanske teknologiaktier
men de sidste par år har ikke været så gode i usa pga recessionen i boligmarkedet og finanskrisen
så jeg har holdt mig til asiatiske aktier mm, og bl.a. europa
men regner med at usa får en positiv vending pga rentesænkningen og afsmitningen fra boomet i den globale økonomi, som beskrevet nedenfor
og især på teknologi området er usa jo globalt så førende at mange amerikansle teknologi virksomheder sælger - og producerer - meget mere i verden uden for end i usa og med stærkt stigende tendens
hvad beskæftiger du dig med, måske det er semiconductors/software, californiaen er jo bl.a. semiernes land - silicon valley
hvad er dit indtryk af boligmarkedet i californien, hvorlænge og hvormeget mere skal boligpriserne falde?, og bilsalget, hvor alvorligt skal man tage skiftet fra SUV/pick-ups til personbiler
dongfengs salg af biler er steget 33% i maj, og alene lastbilerne er steget ca 55% til næsten 50.000 eller 600.000 på årsbasis
nu er det ikke heavy trucks alt sammen, og fordelingen mellem heavy trucks og mindre lastbiler kender jeg ikke - endnu
men det indikerer at de mest benzin/diesel forbrugende dele af bilparken i kina stiger aller mest
indikationen er et salg af heavy trucks i kina på ca 650.000 i år efter 500,000 i 2007 og 300.000 i 2006
650.000 er på niveau med usa og europa tilsammen selvom de har en dårligere kvalitet!, men dårlig kvalitet betyder som regel også dårligere brændstoføkonomi så
det er jo godt for vores olieaktier, jo dårligere kvalitet jo bedre