Qualcomm Inc raised its quarterly profit and revenue targets as it forecast better-than-expected mobile phone chip sales, but said it remains cautious due to the weak economy.
Qualcomm said it now expects revenue of $2.67 billion to $2.77 billion for its fiscal third quarter, ending June 28, up from a previous forecast of $2.4 billion to $2.6 billion.
It raised its outlook for operating income, excluding its investment arm and other special items, to a range of $1.06 billion to $1.11 billion, from a previous target of $800 million to $900 billion.
“Our increased guidance reflects stronger-than-expected demand for more data-capable chipsets and increased licensing revenues driven in part by advanced 3G network upgrades,” Chief Executive Paul Jacobs said in a statement paydayadvance.
“While some chipset demand for developing markets has shifted to the fourth fiscal quarter and demand remains generally strong, due to the current economic environment we remain cautious and currently project a modest sequential decrease in chipset shipments,” he said.
The company did not give an earnings-per-share forecast due to market volatility and said its guidance does not include provisions for the consequences of any pending legal matters.
Qualcomm shares were down 1 percent at $45.58 in early trading on the Nasdaq stock market.
(Reporting by Sinead Carew; editing by John Wallace)
OTTAWA–Magna International Inc. chairman Frank Stronach says he expects the company's newly acquired Opel unit in Germany to break even in three years and turn a profit in four years.
Stronach was in Ottawa today unveiling his company's new electric vehicle to federal MPs.
Stronach says he expects to turn money-losing Opel around financially and expand the German carmaker's markets to Russia and other parts of the world payday loan rates.
Magna, headquartered north of Toronto, is Canada's largest auto parts maker with 74,000 employees in 25 countries.
The company announced plans to buy control of Opel on the weekend from parent company General Motors Corp., with the help of the German government.
Several emerging market currencies in Asia hit 2009 highs on Friday, but the rally on the back of surging stocks may soon hit a roadblock made up by doubts about the stamina of any global economic recovery.
Foreign investors have flocked to put money into regional equities and bonds, encouraged by signs the global downturn may be bottoming out following the most severe crisis in decades.
But caution is the watch-word as markets try to determine if the rebound seen so far reflects sustainable demand or a rush of orders to replenish stocks depleted during the downturn.
The outcome is critical for Asia because it relies heavily on trade earnings, which can drive up currencies over the longer-term.
“Economic expectations are stabilizing, although we may still have many more months of volatility,” said Callum Henderson, chief global currency strategist at Standard Chartered Bank in Singapore.
On Friday, the Indonesian rupiah hit its highest level since October. Thai baht, India rupee and Taiwan dollar are trading at 2009 highs and the Singapore dollar and the Malaysian ringgit are their strongest since January. But analysts suspect the rally will fade.
“While the region’s balance of payments have begun to right themselves, they are not yet strong enough to generate a sustainable rally for the Asia ex-Japan currency bloc,” said Stewart Newnham, a strategist at Morgan Stanley in Hong Kong, said in a client note.
The currencies tracked the rise in regional stocks, making them vulnerable if fickle investors start to doubt the strength of the global recovery and sell off equities again 24 hour payday advances.
RUPIAH, WON, PESO
After dumping a net $14 billion in stocks across South Korea, Taiwan, Indonesia, India and Thailand, and the Philippines in the last three months of 2008, investors have bought back $16.8 billion since early March, Nomura figures show.
The helped the MSCI index of Asia Pacific stocks outside Japan rally as much as 50 percent.
A positive daily correlation with the index over the past year of between 0.88 and 0.95 percent suggest the Korea won, rupiah and to a lesser extent the Philippines peso are the most exposed currencies in emerging Asia to a stocks sell off.
Newnham picked out both the Singapore dollar and rupiah as having limited scope to advance since they are now trading well above their 1990-2008 averages, suggesting their values are stretched.
The Singapore dollar is the most dependent economy in Asia on exports, which generate the equivalent of 190 percent of its GDP, so it’s outlook relies on the direction of global trade.
The rupiah has long been one of Asia’s most volatile currencies. High interest rates attract a wave of investment when risk appetite grows, but equally the currency is hit hard when risk concerns rise.
Confidence among institutional investors dipped in March with investor morale lower in North America and Europe but showing improvement in Asia.
The U.S. financial services firm said on Tuesday its State Street Investor Confidence Index fell slightly by 2.7 percentage points to 70 from a revised five-month high of 72.7 in February, led by a 4.8-point retreat in the North American index to 59.4.
State Street, which compiles the index by analyzing the buying and selling patterns of institutional investors, said the easing in U.S. investor sentiment was not surprising as it came after a rebound in confidence over the last quarter months from an all-time low of 30.6 in December.
Elsewhere, Europe had a 3.2-point decline in investor risk appetite but the Asian index rose by 2.5 points.
"There is an increasing sense among institutional investors that the rapid freefall of the real economy is approaching its end, both because much adjustment has occurred and because of the gathering power and breadth of the U paydayloans.S. Fed and Treasury response," said Harvard University Professor Ken Froot, a co-developer of the index.
"Institutions seem to appreciate this and are moving to a less defensive risk stance."
State Street said confidence among European institutional investors was still languishing at new lows, reflecting the relatively slower pace of policy response in the region.
The firm said the index would include indicators on level of institutional investor risk appetite from May 26. The index will be rebased so a reading of above 100 will indicate increasing exposure to risky assets and a sub-100 reading will imply a reduction of risky-asset exposure.
Jefferson City — Before giving up negativity for Lent, the new director of the Missouri Department of Economic Development viewed the state’s unemployment rate, 8 percent and rising, as a glass half-empty.
Now, keeping with the season, she’s gained inspiration from other dark economic times — particularly during the decline of the McDonnell-Douglas Corp..
Then, Martinez said, employees capitalized on their job losses by starting their own companies. Seizing on that example, she says she’s trying her best to "look at this as 230,000 possible entrepreneurs, rather than 230,000 victims of a recession."
The question facing Martinez, a St. Louis attorney who assumed the reins of the department Feb. 10, is how to maintain a half-full glass in the months to come.
Martinez says she can help by taking the lead in tearing down parochial attitudes between state agencies and local chambers of commerce. Economic development and job creation need to be part of every agency’s mandate.
Another way, she says, is for the state’s 43 career centers to focus on retraining Missouri’s work force for a postrecession economy that will emphasize biofuel, battery-powered transportation and green technology.
"We have to take the skill sets we have and deploy them in a different way," Martinez said.
Martinez herself is taking the expertise she’s learned in one job and applying to another. She came to Jefferson City after 26 years at the Bryan Cave law firm in St. Louis where, as a financial and developmental transaction specialist, she counted some of the region’s top-shelf businesses among her clients.
St. Louis activist Ed Golterman and Martinez clashed over the course of his long quest to restore the Kiel Opera House, a campaign he maintains Martinez stalled with her support for the revitalization of Grand Center. In her new job, Golterman fears Martinez will defer to past connections to powerful interests in the business community to the exclusion of the jobless. Martinez brushed aside the contention with a laugh.
Dick Fleming, the president of the St. Louis Regional Chamber and Growth Association, said Martinez brings unique elements to the director’s job.
"She’s a wonderful combination of smart and strategic and she has the capacity to implement and really focus on a project and complex transactions. That’s a very unusual set of combinations to have," said Fleming.
Still feeling her way barely two months into a new and far more public job, Martinez, 54, congenially shared an economic outlook for the state that emphasized optimism over substance in an hourlong interview in a conference room outside her Jefferson City office.
Martinez said being a litigator gave her a peak inside the business world without actually being a part of it, an experience that is helping her make the transition from the private to the public sector.
"I understand more about the decision-making process that companies go through and (their) training needs," she said good credit score. "I don’t think others have come to this office with that kind of background."
Martinez also understands that reversing the state’s economic decline requires a balancing act, starting with her department’s negotiations with the Republican-dominated Legislature over the size and scope of tax credit proposals and other economic turnaround initiatives.
State Sen. Jim Lembke, representing parts of St. Louis and St. Louis County, was among the Republicans who initially opposed Martinez’s nomination.
His objections, Lembke said, stemmed from Martinez’s pro bono work opposing a controversial Valley Park ordinance that would have cracked down on illegal immigrants — not her qualifications.
"She is more than capable and qualified for the job," said Lembke, adding that he and his colleagues are looking forward to working hand-in-hand with Martinez to facilitate the state’s economic recovery.
The spirit of cooperation, Martinez emphasized, needs to extend past cooperation between the legislative and executive branches.
She’s devoted a significant portion of her first weeks in office, in fact, to pointing out that no state agency is an island. Economic development, agriculture, transportation — in Martinez’s view no agency in the executive wing — is exempt from the challenge of getting Missourians back to work now and in the future.
"Every department in the state needs to minor in economic development," she said. "We all have to be rowing in the same direction."
To Martinez, that means linking the Agriculture Department to ethanol research and production while ensuring that other state agencies, such as the Missouri Department of Transportation, find roles for the unemployed in the execution of various projects and programs.
As she starts rowing, Martinez says local economic development concerns and chambers of commerce, with a reputation for pitting communities against one another by luring businesses with tax breaks and other perks, can also expect a set of oars.
The current market, she says, dictates that once-competing forces in the state’s economy adopt a one-for-all mindset.
At the same time, Martinez promised to work aggressively by providing tax incentives and other programs to keep existing Missouri businesses from fleeing to other states.
"The best defense is a good offense. I don’t want us to be vulnerable anymore," she said, a philosophy Martinez also pledged will apply equally to small businesses. "We have jobs to create and we have too much to do to look backward," she said.
sgiegerich@post-dispatch.com
314-340-8172
China’s economic slowdown, already the deepest in seven years, is set to worsen as the global recession pummels its exports, darkening the outlook for suppliers from Australia to Taiwan.
Gross domestic product will grow 6.3 percent this quarter from a year earlier, according to the median estimate of nine economists surveyed by Bloomberg News. The survey was conducted after yesterday’s report that the economy expanded 6.8 percent in the fourth quarter.
Recessions in the U.S., Europe and Japan have slashed demand for China’s electronics and textiles, forcing the closure of thousands of factories and throwing millions out of work. The slowdown is increasing pressure on policy makers to add to a 4 trillion yuan ($585 billion) stimulus package and cut interest rates to revive an economy that accounts for about a fifth of global growth.
“China’s economy is likely to slow further,” said Mark Williams, an economist at Capital Economics Ltd. in London who worked at the U.K. Treasury as an adviser on China from 2005 to 2007. “A strong recovery will depend on more aggressive action by the government, in particular to beef up its own contribution to the stimulus.”
China is also facing pressure from U.S. President Barack Obama to allow the yuan to strengthen. Timothy Geithner, Obama’s pick for Treasury secretary, said the president “believes that China is manipulating its currency.” The remarks, in response to questions from the Senate Finance Committee released yesterday, may presage a tougher line with China. Former Treasury Secretary Henry Paulson refrained from calling the country an illegal “manipulator.”
Miners Suffer
Companies from Australia’s BHP Billiton Ltd., the world’s largest mining company, to Taiwan Semiconductor Manufacturing Co., the world’s largest custom-chip maker, face declining earnings as China’s demand plunges.
BHP is closing a nickel mine and cutting 6,000 jobs around the globe because of weaker demand, largely caused by the slowdown in China, the world’s No. 1 consumer of metals.
“The Chinese boom that has supercharged the Australian economy over the past five to seven years is receding rapidly,” Australian Finance Minister Lindsay Tanner said yesterday. “That’s a big problem for Australia. It is part of a wider picture that is coming to bear throughout the world.”
Japan and South Korea posted record declines in exports to China last month, worsening the effect of plunging demand from the U.S. and Europe. China’s own exports declined by the most since 1999, triggering factory closures and job cuts.
‘Caught a Cold’
“China coughed and Korea caught a cold,” Oh Suk Tae, an economist at Citigroup Inc. in Seoul, said after the nation yesterday posted its biggest economic contraction since the Asian financial crisis. “We’re now going down because of China. It’s not our savior any more.”
South Korea’s economy shrank 5.6 percent last quarter, more than twice the expected pace. China is South Korea’s biggest export market pay day loans.
China’s economic slide will also trim its contribution to global growth, estimated at 19.5 percent by the International Monetary Fund in 2007, more than any other nation.
China’s economy grew 9 percent in 2008 after a 13 percent expansion in 2007 that pushed it past Germany to become the world’s third-biggest.
At home, rising unemployment and a widening gap between urban and rural incomes are political challenges for the ruling Communist Party, which has pledged more efforts to maintain social stability.
Urban Jobless
The official urban unemployment rate, which doesn’t include millions of migrant workers, jumped in the fourth quarter for the first time since 2003. A rate as high as the government’s 4.6 percent target for the year would be the worst since 1980.
“Could the economic situation become so bad in China that it threatens the regime itself?” Albert Edwards, a London-based global strategist for Societe Generale SA asked this month. “Of course it could, and clients should consider the implications of such an event.”
Edwards predicted the 1990s Asian financial crisis and in March 2007 said a U.S. recession would spur a bear market in equities.
Premier Wen Jiabao said this week that the government must work urgently this quarter to reverse the slowdown and maintain social stability amid a “very grim” outlook for jobs.
Weaker growth has hurt profits at companies from China Southern Airlines Co. to Aluminum Corp. of China, and a property market and construction slump will make it harder to revive the economy. China Vanke Co., the country’s largest publicly traded real-estate developer, said sales fell 14 percent in December from a year earlier.
‘Looks Fragile’
“Key demand drivers, including exports and domestic consumption, as well as profit growth, are now slowing, and they will continue to grind lower over the year,” said Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai. “Real estate still looks fragile, as does private investor sentiment.”
As well as the stimulus package, China has pressured state- owned banks to increase lending, reduced export taxes, stalled the yuan’s gains against the dollar to help exporters, and is adding support for 10 key industries, including tax cuts and subsidies for steel and autos.
China’s leaders “will do anything” to maintain an economic expansion of about 8 percent, the government’s target for creating jobs and maintaining stability, according to Huang Yiping, chief Asia economist at Citigroup Inc. in Hong Kong.
“This is not an economy that’s going to bounce back quickly,” said Ben Simpfendorfer, an economist at Royal Bank of Scotland Plc in Hong Kong.
He forecasts exports will slump 15 percent in the first half, dragging economic growth down to 5 percent this year.
Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) agreed to sell its 29 percent stake in Sanyo Electric (6764.T: Quote, Profile, Research, Stock Buzz) after Panasonic Corp (6752.T: Quote, Profile, Research, Stock Buzz) slightly sweetened its offer, three financial sources said, clearing the way for a deal worth at least $6.4 billion.
The move by Goldman, which, unlike two other major Sanyo shareholders, had rejected Panasonic’s earlier lower offers, came after the Wall Street firm reported its first quarterly loss since going public.
The combination of Panasonic, the world’s biggest plasma TV maker, and Sanyo, the top producer of rechargeable batteries, would create Japan’s No. 2 electronics manufacturer after Hitachi Ltd (6501.T: Quote, Profile, Research, Stock Buzz) with $120 billion in annual sales.
Sanyo shares closed down 1.4 percent at 141 yen on the news that a deal had been reached below the company’s current share price.
Panasonic and Sanyo plan to hold a news conference on Friday to give details of a planned tender offer, in which Panasonic will offer 131 yen per Sanyo share, the sources with direct knowledge of the matter said, 1 yen more than it had earlier offered this month.
Officials at Goldman Sachs and Panasonic declined to comment.
Goldman appears to have taken its chance to sell its stake, despite the price being far below what it had been seeking, due to the increasingly bleak outlook for Japanese consumer electronics makers.
Late last month, Panasonic, formerly known as Matsushita Electric, cut its annual net profit forecast by 90 percent and announced plans to restructure as the global financial crisis dampens sales of TVs and other electronics on line pay day loans.
Some analysts have also said the market price of Sanyo shares may not have fully factored in a dilution in per-share value, which comes with the conversion of preferred shares into common shares.
Sumitomo Mitsui Banking, Daiwa Securities SMBC and Goldman hold nearly 430 million of Sanyo’s preferred shares, each of which can be exchanged for 10 common shares when a restriction is lifted in March.
If converted, Goldman and Daiwa Securities SMBC would each hold a 29 percent stake in Sanyo, while Sumitomo Mitsui Banking would hold 12 percent. The combined 70 percent stake would be worth about $6.4 billion, based on the offer price of 131 yen.
CHALLENGES AHEAD
Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management, said Panasonic President Fumio Ohtsubo would have a tough time creating synergy effects even though the deal now looks set to go through.
“When things are good and top lines are growing, it is easy for Japanese companies to carry out restructuring. They are not very good at streamlining in an environment like this since no one would rehire the employees they let go,” he said.
“His pain from overseeing the birth of a successful merger has just begun.”
Shares in China Construction Bank (0939.HK: Quote, Profile, Research, Stock Buzz)(601939.SS: Quote, Profile, Research, Stock Buzz), the country’s most valuable lender, slid more than 4 percent on Monday even after Bank of America (BAC.N: Quote, Profile, Research, Stock Buzz) poured cold water on a local newspaper report it planned to unload its stake in the Chinese bank at a discount.
The No. 3 U.S. bank, which owns 19.13 percent of Construction Bank, aims to sell 3-6 billion of the Chinese lender’s Hong Kong shares at a discount of 13-17 percent to its Friday close, raising up to $3 billion, the Apple Daily cited unidentified market sources as saying.
Both the U.S. firm — which is slashing up to 35,000 jobs over three years to save $7 billion and offset an erosion of business from a global economic downturn — and a source close to Construction Bank, denied the report.
The source, who declined to be identified due to the sensitive nature of the issue, told Reuters the report was simply untrue but gave no other details.
Several local fund managers contacted by Reuters also said they had not received any information relating to the possible sale of Construction bank shares.
“It is not true,” Bank of America spokesman Robert Stickler said in an emailed reply to Reuters questions.
Still, the Chinese lender’s stock fell as much as 4.4 percent in the morning. Analysts said investors believed Bank of America, which is set to fold in Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz) via a merger valued at $20.5 billion, would eventually reduce its ownership in the state-run bank in future.
“There is a possibility that Bank of America might sell its shares in CCB before the end of the year to capture the rise in CCB shares since the end of October,” said Y advance payday loans.K. Lee, analyst at Core-Pacific Yamaichi. “That’s the main reason why CCB is down.”
“Bank of America needs more money because it is facing difficulties in its home market. Its delinquency ratio is rising,” he added.
MATTER OF TIME
Speculation that Bank of America would unload part of its stake in China’s largest property lender, has surfaced sporadically and many analysts say it’s just a matter of time.
The report comes about a month after Bank of America actually nearly doubled its stake in the Chinese firm, which investors — shell-shocked by a year-long market slide — feared signaled the U.S. lender was preparing to sell some of its pre-existing holdings in the bank to bolster its capital base.
Bank of America, which is facing increasing troubles at home, was barred from selling those newly acquired shares until August 29, 2011, but holdings it had bought previously were released in November from a three-year lock-up period, allowing them to be sold at any time.
Bank of America paid $3 billion for a 9 percent stake in CCB in June 2005, and invested another $1.9 billion this July. Despite a sharp slide in Chinese share prices this year, that $4.9 billion total investment was worth $14.5 billion as of September 30, almost tripling in value, Bank of America has said.
But just last week, Construction Bank president Zhang Jianguo told reporters he believed Bank of America would not sell shares of China’s top property lender in the near term, citing his own communications with the U.S. firm.
Africa may be a needy continent but this need offers rich rewards for businesses that are daring, innovative and flexible enough to grapple with poor infrastructure, underdeveloped markets and volatile politics.
This is the premise of a new book, “Africa Rising: How 900 Million African Consumers Can Offer More Than You Think” (Wharton School Publishing, $29.99).
Author Vijay Mahajan, who holds the John P. Harbin Centennial Chair in Business at McCombs School of Business, University of Texas at Austin, debunks traditional stereotypes about a continent that is starting to beep ever louder on the radars of global investors.
His book, published this month, is built around interviews with African and expatriate business people across the continent, including producers of consumer goods, alcohol, soft drinks, airline firms and retailers.
“(Many entrepreneurs) were tired of the media reporting too many negative stories about Africa .. faxless payday loans. if something happened in one country, all Africa was on fire. They were saying ‘how come our story doesn’t get out?’” he told Reuters in an interview.
High commodity prices, greater political stability in many countries, fewer wars, better communications and economic growth of around 6.5 percent have helped lure new investment, often from China and other emerging countries, primarily for resources such as oil and gas.
Mahajan says Africa’s 900 million plus people in 53 countries offer much as a market — they need to eat, they need clean water, clothing and medicine and they want cell phones, bicycles and computers.
If Africa were a single country, according to World Bank data, it would have had $978 billion total gross national income in 2006, placing it ahead of India.
Samsung Electronics Co Ltd (005930.KS: Quote, Profile, Research, Stock Buzz), the world’s top maker of memory chips, said it may buy flash memory maker SanDisk (SNDK.O: Quote, Profile, Research, Stock Buzz), which is valued at $3.2 billion, in a deal that could reshape a struggling industry.
“We are looking at various opportunities regarding SanDisk, but nothing has been decided yet,” Samsung spokesman James Chung told Reuters in response to reports the South Korean firm was interested in the U.S. maker of flash memory, which is widely used in storage devices and digital gadgets.
In a regulatory filing later, Samsung said an acquisition of SanDisk was an option.
Analysts said an acquisition could shift the balance of power in the flash memory industry.
“Samsung buying SanDisk would mean big damage for Toshiba,” said Yoshihisa Toyosaki, head of IT research firm J-Star Inc paydayloans.com.
Shares in Samsung closed up 1.2 percent after gaining more than 3 percent, outperforming a 1.6 percent fall on the wider Seoul share market .
Stocks in Japan’s Toshiba (6502.T: Quote, Profile, Research, Stock Buzz), which trails Samsung in the flash market but which plans to nearly double its chip production capacity in partnership with SanDisk, fell 4.6 percent to their lowest since November 2005.
In a brief statement, SanDisk said it “periodically has conversations with multiple parties, including Samsung, regarding a variety of potential business opportunities,” but declined to comment further.
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