TOKYO (AP) – Sony Corp., maker of the hit PlayStation game console, ran up less red ink than expected last quarter but maintained its forecast for full year losses, underscoring the risk consumer spending will remain slack even as other parts of the global economy recover.
Sony said Thursday its net loss for the fiscal first quarter was 37.1 billion yen ($391 million) compared with a 35 billion yen ($368 million) profit in the April-June period a year earlier. Quarterly sales dropped 19.2 percent to 1.56 trillion yen ($16.4 billion).
The results were better-than-expected because of cost cuts, an easing of the yen’s appreciation and gains on the Tokyo stock market, according to Sony, which has music and movie divisions as well as making the Walkman portable music player and flat panel TVs. Analysts surveyed by Thomson Reuters were forecasting a 109 billion yen loss.
Results from other Japanese electronics makers including Nintendo Co., Sharp Corp., NEC Corp. and Fujitsu Ltd. were also dreary and their outlooks were mixed. Consumer spending on goods like video games and other consumer electronics could lag the tentative recovery shown by other indicators. In Japan, the world’s second-biggest economy, factory output has been recovering but retail sales have continued to slump amid rising unemployment.
Nintendo, whose popular Wii home console competes against Sony’s PlayStation 3, stayed in the black. But the Kyoto-based maker of Pokemon and Super Mario games saw its quarterly profit tumble 61 percent to 42.3 billion yen ($445 million). It blamed a strong yen and fewer hit games. Quarterly sales declined 40 percent to 253.5 billion yen.
Tokyo-based Sony remained cautious and kept its forecast for the fiscal year through March 2010 unchanged at a 120 billion yen ($1.26 billion) loss, citing too many uncertainties about the future.
Ryosuke Katsura, analyst with Mizuho Securities Co. in Tokyo, warned TV panel prices were starting to rise, while price competition for TV sets was intensifying and likely to further erode Sony’s profitability in coming months.
Plus if Sony decides to slash PlayStation 3 prices, as analysts widely expect, the move may draw gaming fans but will hit the bottomline, he said.
“It is still too early to assess the second half of the year,” said Katsura.
In a plus for the future, Sony said Thursday it had finalized a deal with Japanese rival Sharp Corp. on a joint venture to produce and sell large-size liquid crystal display panels for TVs.
Sony, which has fallen behind in LCD TVs, doesn’t make its own LCD panels and now has a joint venture with Samsung Electronics Co. of South Korea.
Sony said it will make an initial investment of 10 billion yen into the new venture with Sharp in Sakai city, central Japan, which will produce 72,000 panels a month. Sony said it will make additional investments later.
The global economic slump continued to batter Sony’s sales in the last quarter. Quarterly sales in consumer electronics, such as Bravia TVs, Cyber-shot digital cameras and Handycam camcorders, plunged 27.3 percent from a year earlier.
Sales of the PlayStation 3 fell to 1.1 million from 1.6 million the same period the previous year, while PlayStation Portable sales declined to 1.3 million from 3.7 million.
Gadget prices have been dropping amid intense competition, making it tough for Sony to eke out profits.
In contrast to its money-losing electronics and gaming units, Sony’s entertainment divisions were profitable.
Sales were up 6.5 percent at Sony Pictures Entertainment, which swung into the black from losses the previous year on the success of Hollywood releases such as “Angels & Demons” and “Terminator Salvation.”
Sales doubled at its music division after Sony Music Entertainment became a wholly owned Sony subsidiary in October, offsetting the damage from a sluggish global music industry.
Best-selling albums during the quarter were Bob Dylan’s “Together Through Life,” Dave Matthews Band’s “Big Whiskey and the GrooGrux King,” and King of Leon’s “Only by the Night,” according to Sony.
NEC, meanwhile, racked up a 33.8 billion yen ($356 million) quarterly loss as sales dropped 22.3 percent to 778.5 billion yen ($8.19 billion). But NEC said the downturn appeared to be easing.
Sharp, the maker of Aquos flat-panel TVs, sank to a 25.2 billion yen ($265 million) loss for the April-June period, as a companywide effort to cut costs failed to offset plunging demand.
Fujitsu reported a 29.1 billion yen ($306 million) loss for the fiscal first quarter, as quarterly sales dipped 11.3 percent to 1.044 trillion yen ($10.99 billion).
Still, it raised its forecast for the full year through March 2010, citing rebounding demand for electronic components. Fujitsu now expects 25 billion yen ($263 million) in profit.
Sony shares rose 6.8 percent to 2,505 yen ($26) in Tokyo. Nintendo jumped 2.6 percent to 26,820 yen ($282), while NEC gained 2.8 percent to close at 327 yen ($3.4), Sharp rose 3.9 percent to 1,029 yen ($10.8) and Fujitsu edged up 3.1 percent to 594 yen ($6.2). Earnings were released after trading ended on the Tokyo Stock Exchange.
AMSTERDAM (AP) – Royal Dutch Shell PLC said Thursday its net profit fell 67 percent in the second quarter to $3.82 billion, reflecting a sharp decline in oil prices and worse refining margins.
In the same period a year earlier, Shell had profit of $11.6 billion. Sales at Europe’s largest oil company were $63.9 billion, down from $131.4 billion.
“Energy demand is weak,” said Chief Executive Peter Voser in a statement. “There is excess capacity in the market and industry costs remain high.”
He added the company is “not banking on a quick recovery” in the global economy.
At Shell’s exploration and production arm, earnings fell 77 percent to $1.33 billion. Production was down 6 percent to 2.9 million barrels of oil and equivalents per day, while prices realized by the company were $52.62 per barrel, from $111.92 a year ago.
“The industry outlook remains a challenging one, despite the rally in oil prices” from their winter lows, Voser said. In the first quarter of 2009, the company’s average selling price was $42.16 per barrel.
At Shell’s refining arm, earnings were down 74 percent to $1.16 billion, due mostly to the lower value of inventories. Stripping out the impact of price changes in both years, the arm would have posted a loss of $255 million, versus profit of $1.08 billion, due to lower refinery intake, worse margins, and higher pension charges.
Shell said it would reduce capital spending in 2010 to $28 billion, from an expected $31 billion in the current year. It said it would keep its dividend per share at $0.42, an increase of 5 percent from a year ago and the same as in the first quarter of 2009.
NEW YORK (MarketWatch) — Exxon Mobil Corp. /quotes/comstock/13*!xom/quotes/nls/xom (XOM 71.00, -0.43, -0.60%) said Thursday second-quarter net income fell 66% to $3.95 billion, or 81 cents a share, from $11.68 billion, or $2.22 a share in the year-ago period. Excluding items, earnings fell to 84 cents a share from $2.27 a share. Capital spending fell 6% to $6.56 billion. Earnings for the second quarter of 2009 included a special charge of $140 million for interest related to the Valdez punitive damages award. Analysts expected earnings of $1.01 a share, according to a survey by FactSet Research.
- Second-quarter net income of $349 million, or $2.67 per diluted share
- Net income growth of 26.4%, excluding the special item from last year
- Second-quarter net revenue growth of 2.7%, to $1.3 billion
- Second-quarter gross dollar volume down slightly by 0.6%, and purchase volume down slightly by 0.7%
- Second-quarter total operating expenses declined 13%, excluding the special item from last year
MasterCard Incorporated (NYSE: MA – News) today announced financial results for the second quarter of 2009. The company reported net income of $349 million, or $2.67 per diluted share. Net income grew 26.4%, excluding the special item from last year. The company’s total operating expenses, other income, effective tax rate, net income and earnings per share, excluding special items, are non-GAAP financial measures that are reconciled to their most directly comparable GAAP measures in the accompanying GAAP reconciliations.
Net revenue for the second quarter of 2009 was $1.3 billion, a 2.7% increase versus the same period in 2008. On a constant currency basis (excluding the movement of the euro and the Brazilian real relative to the U.S. dollar), net revenue increased 7.0% compared to the same period in 2008. The higher net revenue in the second quarter this year was fueled by:
- Pricing changes, which contributed approximately 8 percentage points of the net revenue growth;
- A 7.9% increase in the number of transactions processed to 5.6 billion; and
- A 5.8% decrease in rebates and incentives.
These contributing factors were partially offset by the impact of lower gross dollar volumes on second-quarter 2009 revenue.
MasterCard’s gross dollar volume was down by 0.6% on a local currency basis, versus the second quarter of 2008, to $595 billion. Worldwide purchase volume during the quarter was down by 0.7% on a local currency basis, versus the second quarter of 2008, to $450 billion. As of June 30, 2009, the company’s financial-institution customers had issued 959 million MasterCard cards, an increase of 1.2% over the cards issued at June 30, 2008.
“We are very pleased with our second-quarter financial performance and are adapting well to the challenging economic environment,” said Robert W. Selander, MasterCard president and chief executive officer. “The thoughtful actions we’ve taken to realign our resources and priorities to match customer and local market needs, as well as our sharp focus on expense management, have enabled us to deliver strong operating margin and net income improvements.
“At the same time, we continue to invest in the future so that we are solidly positioned once the economic tide begins to turn,” said Selander. “We operate a global, flexible and resilient business that will continue to benefit from the ongoing shift toward electronic payments, which consumers, businesses and governments find more efficient, secure and easier to manage.”
The special item for the second quarter of 2009 represented a $0.5 million litigation settlement charge. The special item for the second quarter of 2008 represented a $1.65 billion charge related to a litigation settlement.
Excluding special items, total operating expenses decreased 13.0%, to $722 million, during the second quarter of 2009 compared to the same period in 2008. Currency fluctuations contributed 3.2 percentage points to the rate of decline. The decrease in total operating expenses was driven by:
- A 2.9% decrease in general and administrative expenses, primarily resulting from decreases in professional fees and travel expenses, versus the comparable period in 2008. These decreases were partially offset by increased personnel costs due to severance of $51 million in the second quarter of 2009. Excluding the impact of severance costs in both periods, general and administrative expenses declined 10.7% for the second quarter of 2009. A favorable foreign currency impact represented 2.9 percentage points of both rates of decline; and
- A 35.8% decrease in advertising and marketing expenses versus the year-ago period, primarily related to continued cost containment initiatives in response to market realities. Favorable currency fluctuations representing approximately 3.5 percentage points contributed to the rate of decline.
Including special items, total operating expenses decreased 70.9%, to $723 million, primarily due to the litigation settlement that occurred in the second quarter of 2008.
Operating margin was 43.6% for the second quarter of 2009, up 10.2 percentage points over the year-ago period, excluding special items.
Total other expense was $21 million in the second quarter of 2009 versus total other income of $10 million in the second quarter of 2008. Interest expense versus the year-ago period increased $16 million, primarily due to the interest accretion associated with the litigation settlement that occurred in the second quarter of 2008.
Excluding special items in both periods, MasterCard’s effective tax rate was 35.0% in the second quarter of 2009, versus 35.3% in the comparable period in 2008. Including the special items, the effective tax rate was 35.0% for the second quarter of 2009, versus 39.0% in the comparable period in 2008. The difference in the effective tax rate was primarily due to the charge for the litigation settlement recorded in the second quarter of 2008.
Year-to-Date 2009 Results
For the six months ended June 30, 2009, MasterCard reported net income of $717 million excluding the special item and $716 million including the special item, or $5.47 per diluted share in both cases.
Net revenue for the six months ended June 30, 2009, was $2.4 billion, or essentially flat versus the same period in 2008. On a constant currency basis, net revenue increased 4.5%. Increased processed transactions of 6.9% and pricing changes of approximately 6 percentage points contributed to the revenue growth in the year-to-date period. These contributing factors were partially offset by the impact of lower gross dollar volumes on revenue for the six months ended June 30, 2009.
Total operating expenses decreased 12.0%, to $1.3 billion, for the six-month period compared to the same period in 2008, excluding special items for both periods. Currency fluctuations contributed 3.2 percentage points of this decrease. Including special items, operating expenses decreased 58.1%, to $1.3 billion.
Total other expense was $32 million for the six-month period versus total other income of $183 million for the same period in 2008, including special items. The decrease was primarily driven by gains from the sale of Redecard securities and the termination of a customer business agreement in 2008.
MasterCard’s effective tax rate, excluding special items, was 34.1% in the six months ended June 30, 2009, versus a rate of 35.2% in the comparable period in 2008. The decrease in the effective tax rate was primarily due to an adjustment to deferred taxes reflected in the first quarter of 2009. Including the special items, the effective tax rate was 34.1% for the 2009 period, and 43.9% for the 2008 period. The difference in the effective tax rate was primarily due to the impact of the charge for the litigation settlement in 2008.
LONDON (MarketWatch) — Motorola Inc. /quotes/comstock/13*!mot/quotes/nls/mot (MOT 6.57, -0.25, -3.67%) on Thursday reported a second-quarter net profit of $26 million, or 1 cent a share, compared to a profit of $4 million a year earlier. Net sales for the latest quarter dropped 32% to $5.5 billion from $8.08 billion. The group said its profit included net income of 2 cents a share from one-off items. Analysts polled by FactSet had been expecting a loss of 5 cents a share in the quarter on sales of $5.6 billion. Motorola said its mobile devices division shipped 14.8 million handsets in the quarter, with revenue in the unit dropping 45% to $1.8 billion. Sales in its home and networks mobility segment fell 27% to $2 billion. For the third quarter, Motorola said it expects to report a result from continuing operations between a loss of 1 cent a share and a profit of 1 cent a share.
Q2 EPS ex-items 20 cents
* Sales flat at $5.8 billion
NEW YORK, July 30 (Reuters) – International Paper Co (IP.N) posted a 40 percent drop in second-quarter earnings on Thursday but said the worst of the economic downturn had passed and it was seeing improvements in some markets.
Net earnings for the quarter fell to $136 million, or 32 cents per shares, from $227 million, or 54 cents per share, a year ago.
Excluding items, earnings from continuing operations were 20 cents per share.
Net sales were flat at $5.8 billion.
NEW YORK (AP) — Consumer products maker Colgate-Palmolive says its second-quarter profit fell 14 percent as sales fell, but it still beat analysts’ profit predictions as it held costs in check.
The New York-based maker of toothpaste, dish soap and Hill’s Science Diet pet food says it earned $561.6 million, or $1.07 per share, in the quarter that ended in June. That is up from $493.8 million, or 92 cents per share, a year earlier.
Analysts polled by Thomson Reuters expected $1.05 per share.
Revenue fell 5.5 percent to $3.75 billion from $3.96 billion. Analysts had expected $3.81 billion in revenue.
LONDON (AP) — Pharmaceutical company AstraZeneca PLC posted a 6 percent rise in second quarter net profit on Thursday as the company weathered the global recession better than feared and some of its key drugs benefited from a lack of generic competition.
The Anglo-Swedish drugmaker bolstered its positive outlook with a decision to lift full year earnings per share forecast to a range of $5.70 to $6 from $5.15-$5.45.
The company posted net profit of $1.72 billion for the three months to June 30, compared with $1.63 billion in the same period a year ago. Revenue was barely changed at $7.958 billion, compared with $7.956 billion, as exchange rate impacts all but wiped out a 9 percent gain on a constant currency basis.
AstraZeneca Chief Executive David Brennan said that the impact of the global economic downturn on the company’s business and markets “has been less severe than we thought.”
“Our efforts to build a sustainable pipeline are bearing fruit,” he added on a conference call with reporters, referring to the company’s attempts to beef out its previously thin cabinet of future drugs.
AstraZeneca also managed to trim costs throughout the business, from distribution to research and development and selling expenses.
However, it took a $430 million hit in the quarter, making a provision for the losses it expects to arise from U.S. legal proceedings relating to product liability, commercial disputes, infringement of intellectual property rights, the validity of patents and anti-trust law. The company declined to go into further detail about the charge.
Investors welcomed the earnings update, with AstraZeneca shares lifting 2.4 percent to 2,870 pence on the London Stock Exchange.
Cholesterol pill Crestor was the star performer, with sales increasing 33 percent, pushing quarterly sales past $1 billion — to $1.13 billion — for the first time.
The company received a boost from sales of its heart drug Toprol-XL in the United States where the company ramped up production to meet demand after two competitors withdrew generic versions. It also benefited from the six-month delay of the introduction of a generic competitor to cancer treatment Casodex.
The company forecast full-year sales growth of mid single digits at constant exchange rates, with roughly half the benefit from one-off items. It said the rise in the expected core earnings per share was due solely to operational performance, with no impact from currency movements.
Brennan said the company was on track for four new approval filings this year as it boosts its pipeline.
AstraZeneca and its partner Bristol-Myers Squibb are expecting to hear back from U.S. regulators on their new diabetes drug Onglyza on Thursday. Approval is expected after experts recommended the drug in April.
AstraZeneca’s MedImmune unit is working to deliver a nasal spray swine flu vaccine. The U.S. Department of Health and Human Services placed an initial $90 million order for the vaccine, intending to use it on high-risk populations in the event of a flu pandemic.
Brennan said that MedImmune may be able to produce a total of 200 million doses of bulk vaccine, of which 40 million doses can be filled and finished into nasal sprayers by March next year.
However, he added that the availability of sprayers is limited, so the company is both looking to increase the supply and alternative delivery devices — including drops.
Reports Q2 (Jun) funds from operations of $0.31 per share, excluding non-recurring items, $0.01 worse than the First Call consensus of $0.32; revenues rose 3.4% year/year to $189.3 mln vs the $189.3 mln consensus. Co issues in-line guidance for FY09, sees FFO of $1.33-1.38, excluding non-recurring items, vs. $1.36 consensus. Co sees FY09 Same-property NOI for the year between -3 to -1%. Co reported Q2 5.3% increase in same space leasing spreads in the U.S.: 17.5% for new leases and 1.2 percent for leases signed for renewals and options; co reported a 180 bps decline in U.S. same-property net operating income (NOI) from the second quarter of 2008; Posted quarter end occupancy of 92.1 percent in its total shopping center portfolio and 91.8 percent in the U.S. portfolio.
CALGARY, ALBERTA–(Marketwire – 07/30/09) – Highlights
– Production in line with guidance due to reliable upstream operations
– Maintained strong liquidity through a difficult business environment
– Obtained shareholder, court and Competition Bureau approval for merger with Suncor Energy Inc. (Suncor) to create Canada’s premier energy company, effective August 1, 2009
Petro-Canada announced today second quarter operating earnings of $99 million ($0.20/share), down 91% from $1,151 million ($2.38/share) in the second quarter of 2008. Second quarter 2009 cash flow from operating activities before changes in non-cash working capital was $634 million ($1.31/share), down 68% from $1,979 million ($4.09/share) in the same quarter of last year.
Net earnings were $77 million ($0.16/share) in the second quarter of 2009, compared with $1,498 million ($3.10/share) in the same quarter of 2008.
“We continued to manage our business in a prudent manner during the second quarter, as the downturn persisted,” said Ron Brenneman, president and chief executive officer. “Staying the course we charted for ourselves at the beginning of this year has us in a strong position heading into our merger with Suncor.”
As a result of the merger between Petro-Canada and Suncor, Petro-Canada will not be declaring further dividends. Dividends will now be granted and paid by the new amalgamated Company, subject to the approval of its new Board of Directors…..
Siemens on Thursday posted a sharp decline in operating profit in the third quarter, as the global economic recession struck a blow to Europe’s largest engineering group’s main industrial unit.
Siemens’ profit at its healthcare, energy and industrial sectors dropped by 21 per cent year-on-year to €1.7bn ($2.4bn), higher than most analysts had expected.
But as the recession took a hefty toll on the company’s industrial business, its order intake shrank by 27 per cent to €17.2bn, more than analysts had feared. The engineering group failed to achieve its aim to keep the volume of its order intake above or at the same level of revenues. The so-called book-to-bill ratio declined to 0.94 per cent – which is seen as an indicator of a future revenue contraction.
In the third quarter of Siemens’ current financial year, revenues fell by 4 per cent to €18.3bn.
The results marked the first quarterly drop of both revenues and profit amid the current recession. Up until now, Germany’s largest industrial group had showed resilience to the crisis, mainly thanks to a booming energy sector.
Peter Löscher, Siemens’ chief executive, said the group was on track to achieve its targets for the current financial year.
After a profit warning this spring, the group now expects operating profit in its three sectors – energy, industry and healthcare – to exceed last year’s €6.6bn.
“In comparison with our main rivals, we have once again held up well,” Mr Löscher said.
In its industrial business, Siemens felt the pinch from a hefty drop in demand. Profits in the sector – by far the groups largest – shrank by 54 per cent to €534m, as customers drastically reduced their production.
Profit in the healthcare sector dropped by a more moderate 17 per cent, while Siemens’ booming energy sector received a 40 per cent boost in its operating profit.
The conglomerate has said in the past it expects the energy sector to start contracting in 2010, at a time when the industrial business could have reached a turning point.
Siemens hopes that the state-sponsored infrastructure programmes around the world could cushion partly the slump in demand from the private sector, as it expects to reap orders worth about €15bn in the next three years from those government measures.
But the main bulk of these orders will only translate into revenues from 2011 onwards, so that most analysts expect next year to be very tough for the conglomerate.
By JESSIE HO and PERRIS LEE CHOON SIONG
TAIPEI — Taiwan Semiconductor Manufacturing Co. posted Thursday its best quarterly result in nine months for the April-June period, adding continued recovery in demand for chips will lift the company and industry’s revenue.
In the three months ended June 30, Hsinchu, Taiwan-based TSMC, the world’s largest contract chip producer by revenue, had a net profit of 24.44 billion New Taiwan dollars (US$744 million), or NT$0.94 a share, down 15% from NT$28.77 billion, or NT$1.09 a share, a year earlier.
Still, that was TSMC’s highest quarterly earnings since the third quarter of 2008’s NT$30.57 billion, and was slightly above the average NT$23.14 billion forecast of eight analysts surveyed earlier by Dow Jones Newswires.
“As a result of an improved demand outlook, customers’ companies launching new products, and customers’ inventory restocking, second quarter saw a sharp rebound in the demand for semiconductors across all applications,” TSMC said in a statement.
TSMC’s second-quarter revenue fell 15.8% to NT$74.21 billion from NT$88.14 billion a year earlier.
At an investor conference in Taipei, TSMC Chairman Morris Chang said the global chip sector’s revenue will likely fall 17% in 2009, which marks his latest upward revision for the sector’s outlook.
Mr. Chang earlier expected global chip revenue to fall 20%. He also told investors the contract chip-making industry’s revenue will likely fall 19%-20% this year, a smaller fall than the 30% he previously estimated.
For TSMC, its third-quarter consolidated revenue will likely come in between NT$88 billion and NT$90 billion, up from NT$74.21 billion in the second quarter, while gross profit margin will likely widen to 46.5%-48.5%, from 46.2% in the second quarter, TSMC Chief Financial Officer Lora Ho said.
“The chip industry hit bottom in the first quarter, rebounded in second quarter and we expect momentum to continue into the third quarter,” Ms. Ho said.
TSMC’s operating margin in the third quarter will likely rise to 35%-37%, from 33.9% in the previous three months, Ms. Ho said.
TSMC raised its 2009 capital expenditure to US$2.3 billion from its previous projection of US$1.5 billion, according to a company statement.Comments »