Microsoft Corp. plans to invest $60 million in South Korea over the next three years, President Lee Myung-bak’s office said Monday.
In a statement, the presidential Blue House said Microsoft (MSFT, Fortune 500) CEO Steve Ballmer spoke of the plan during a meeting with Lee at the president’s office.
The money will be invested in areas including training and new business cultivation, the statement said.
Korean-language press materials released by Microsoft mentioned the projects but made no mention of the investment amount.
Separately, Microsoft, South Korea’s Hyundai-Kia Automotive Group and South Korea’s Institute for Information Technology Advancement opened a center to develop information technology products and services focused on automobiles.
The opening of the Automotive IT Innovation Center follows an agreement in May by Microsoft and the world’s fifth-largest automotive group to cooperate in developing next-generation in-car information and entertainment systems, Kia Motors Corp cash till payday. said in a press release.
"Microsoft and Hyundai-Kia Automotive Group share a similar vision for the role that information technology will play in connecting people to information, communications and entertainment while they are in their cars," Ballmer said, according to the release.
Also, Ballmer and Nam Yong, CEO of LG Electronics Inc., signed a memorandum of understanding aimed at strategic collaboration in the area of mobile convergence, LG said.
Philip Morris International said Wednesday its third-quarter profit rose 20.6% as sales climbed and a weak dollar boosted results.
The results led the company to reaffirm its full-year profit forecast for 2008.
The world’s biggest non-governmental cigarette maker reported net income for the quarter of $2.1 billion, or $1.01 per share, compared with $1.73 billion, or 82 cents per share, a year ago.
Philip Morris International Inc. (PM) - which sells Marlboros outside the U.S. and has offices in Lausanne, Switzerland and New York - said revenue rose 22% to $17.37 billion. Sales rose 23.6% in Eastern Europe, the Mideast and Africa; 17.3% in Europe; 14.9% in Latin America and Canada; and 11.7% in Asia.
Excluding one-time costs, the company said it earned 93 cents per share in the quarter, beating a consensus Wall Street estimate low fee cash advance. The weak dollar added 8 cents per share to the results and tax items added another 8 cents.
Analysts surveyed by Thomson Reuters, who typically exclude one-time costs, expected earnings of 90 cents per share on revenue of $6.57 billion.
The company reiterated that it would earn $3.32 to $3.38 in 2008. It earned $2.79 a share in 2007.
During the quarter, the company completed its acquisition of Canadian cigarette maker Rothmans Inc.
General Motors Corp., Ford Motor Co. and Chrysler LLC may be forced into bankruptcy by slowing economies and dwindling U.S. auto sales, Standard & Poor’s analyst Robert Schulz said yesterday.
The companies said they have no plans to seek bankruptcy protection.
But the assessment underscored the pressure on the industry as the worsening credit crisis makes it harder for buyers to get loans and dealers to finance their operations. U.S. industry-wide sales tumbled 27 per cent in September, the most in 17 years.
S&P said yesterday that it may further trim credit ratings for GM and Ford on forecasts for 2009 auto demand to fall to its lowest level since 1992.
"Macro factors could overwhelm them at some point" even with the three biggest U.S. automakers committed to turnarounds, said Schulz, S&P’s lead automotive credit analyst.
GM, which has said it will idle assembly factories in Oshawa, Janesville, Wis., and Toluca, Mexico, by 2010, is likely to announce further production cuts and possible plant closures as early as next week as it deals with the sales slump and a collapse in its stock price, sources told Associated Press.
A source said the cuts likely will hit engine, transmission and stamping operations.
With all three companies working to boost cash, any bankruptcy filing would be a last resort, not a "strategic" decision, said Schulz.
He said the "trigger" for a forced restructuring under bankruptcy protection would be based on the automakers’ ability to preserve liquidity as sales decline.
GM shares will fall further, Barclays Capital analyst Brian Johnson said in a report yesterday, reducing his stock price for the Detroit-based automaker to $4 (U.S.)
"With auto sales stalled in the U.S. and beginning to contract in the rest of the world, we believe GM’s cash needs are increasing," wrote Johnson.
GM and Dearborn, Mich.-based Ford lost a combined $24.1 billion last quarter. GM last posted an annual profit in 2004, while Ford hasn’t had a full-year profit since 2005.
Gasoline prices rose for the first time in 10 days as Hurricane Ike bears down on the Texas coast, according to a nationwide survey of gas station credit card swipes.
The average price of regular unleaded gasoline rose 1.6 cents to $3.668 a gallon from $3.652 a day earlier, motorist group AAA said Wednesday. The last time gas prices rose was Aug. 31 as Hurricane Gustav forced workers to abandon offshore oil rigs ahead of that storm.
Forecasters are currently predicting Ike will hit Texas late Friday or early Saturday as a major Category 3 hurricane but the storm remains unpredictable.
Gas prices jumped 1.7 cents to $3.532 a gallon in Texas. Prices also popped higher in Alabama, Mississippi, Georgia, Louisiana, Florida and the Carolinas. Nationwide, Alaska and Hawaii remained the two states with gas prices still tracking above $4 a gallon.
The cheapest gas continues to be found in New Jersey, where prices averaged $3.421 a gallon payday advance lender. Crude prices have trended lower amid heightened concern about weakening demand and in reaction to the slew of storms and hurricanes.
Oil prices continue to hover around their lowest level in five months. On Tuesday, crude futures for October delivery tumbled more than $3 a barrel to $103.26 — their lowest close since April 1.
Early Wednesday, prices were little changed at $103.30 as nervous investors awaited the government’s latest reading on oil and gas supplies and following OPEC’s announced production cuts.
Meanwhile, gas remains about 11%, or 44 cents, below the record high average of $4.114 that AAA reported on July 17, but they are still 85 cents above this time last year.
Global investment company Pala Investments Holdings Ltd. is making an unsolicited $85.7-million cash offer to acquire Rockwell Diamonds Inc., a Vancouver company with operations in Africa.
The 36-cents-per-share offer represents a premium of about 84.6 per cent over Rockwell’s TSX closing price on Monday, Pala said yesterday.
The company, which already owns about 19.9 per cent of Rockwell, has been trying to buy the firm for months.
Joseph Belan, managing director of Pala Investments AG, adviser to Pala, said the offer "is the culmination of our efforts in recent months" to convince Rockwell’s management and board to pursue "value-enhancing options, including Pala’s recent friendly offer to acquire the company direct payday loan cash advance.
"No action was taken on any of these options, leaving us with no alternative but to take this offer directly to Rockwell shareholders," he said.
The offer expires Nov. 10 and is conditional on Pala acquiring two-thirds of Rockwell and a due diligence review.
Hector Ruiz was pushed aside Thursday after six tumultuous years as CEO of Advanced Micro Devices Inc., as the chipmaker tries to pull itself out of a deep financial hole caused by a questionable acquisition and a major product gaffe.
Ruiz, 62, who had been the only person to head AMD (AMD, Fortune 500) other than founder and longtime CEO Jerry Sanders, is stepping down as chief executive but will remain on the board of directors. Ruiz, one of the few Hispanic CEOs of a major U.S. corporation, had also been AMD chairman but now takes on the title of executive chairman, a distinction that lets him retain some day-to-day responsibilities.
He’s being replaced as CEO by AMD’s current chief operating officer, Dirk Meyer, 46, an engineer and chip designer who has been helping Ruiz run the company since 2006. That means he knows AMD’s operations intimately but also that he shares some of the responsibility for the company’s financial distress.
"He is the right leader at the right time for this company," Ruiz said.
Meyer had previously led AMD’s microprocessor division, the company’s primary business unit. Microprocessors act as the brains of personal computers.
Nearly all the world’s personal computers and many of the servers inside corporate data centers run on chips made by AMD or its much larger Silicon Valley rival, Intel Corp. (INTC, Fortune 500) Intel commands 80% of the global market for microprocessors. AMD has roughly the other 20%.
Meyer was involved in the design of AMD’s Opteron server chip, which marked the company’s 2003 foray into a lucrative segment of the server market where Intel had a stranglehold. The success of that chip - and Ruiz’s sales savvy in lining up new customers -helped AMD transform itself from a perennial second-fiddle competitor to Intel into a serious rival across all computing platforms.
But the semiconductor industry is notoriously volatile, prone to boom-and-bust cycles. AMD has crashed hard over the past two years, racking up billions in losses and struggling to regain the competitive edge it squandered against Intel.
The management changeover will be welcome news to AMD investors who have questioned Ruiz’s leadership as the company has faltered. But it’s unclear if Meyer’s appointment will be enough to woo Wall Street back to a company that hasn’t yet provided a clear picture about how it intends to mend its battered balance sheet.
$1.19 billion quarterly loss
The executive changeover came as AMD reported that it lost $1.19 billion in the second quarter, worse than the $600 million it lost in the same period a year ago 1500 payday loans. Taking one-time events into account, AMD’s adjusted loss totaled 60 cents per share, versus the 52 cents expected by analysts polled by Thomson Financial.
AMD’s revenue rose to $1.35 billion from $1.31 billion, but it was short of the $1.45 billion in revenue expected on Wall Street.
AMD shares were down 20 cents, or 3.8%, to $5.10 in after-hours trading. The stock had finished trading Thursday up 24 cents, or 4.7 percent, at $5.30. AMD’s stock was above $40 per share as recently as 2006, and the resulting fall has vaporized $20 billion in shareholder wealth.
Ruiz’s tenure will be marked by the way AMD became a much more dangerous rival to Intel than it had ever been in AMD’s nearly 40-year history. He also was an effective advocate for pushing AMD’s antitrust claims against Intel to regulatory authorities around the world. On Thursday, in fact, European regulators broadened their antitrust case against Intel, claiming that it has deliberately squeezed AMD.
Yet Ruiz ultimately takes the blame for a series of management mistakes and technical problems.
Technical glitches, poor investments
One notable fumble happened in the aftermath of the original Opteron chip’s success. A technical glitch delayed the launch of the Opteron’s successor by eight months, forcing AMD to slash the price of its existing chips to stay competitive.
AMD also continues to be hurt by the heavy debt it took on to finance its $5.6 billion acquisition of graphics chipmaker ATI Technologies in 2006. AMD says ATI is now worth just over half the price it paid.
The deal was done to improve the graphics abilities of AMD’s chips - increasingly important with more Internet video and high-definition movies being watched on computers. But it has forced AMD to sell off parts of itself and tap the market for urgent cash infusions to stay afloat.
In November, the company sold an 8.1% stake to the Abu Dhabi government’s investment arm.
One of Ruiz’s primary jobs as executive chairman will be helping sort out AMD’s manufacturing strategy. The company has been working on that for more than a year but needs to crystallize it soon as it looks to cut the ponderously expensive costs of making computer chips.
AMD could end up selling some of its factories, which require constant multibillion-dollar overhauls to stay cutting-edge. AMD might also offload ancillary businesses like the underperforming units that make cell phone chips and chips for digital TVs.
Now-defunct IndyMac Bancorp Inc. is under investigation by the FBI for possible fraud in connection with home loans made to risky borrowers, The Associated Press has learned.
It was not immediately clear how long the FBI’s probe of the bank has been ongoing.
The investigation is focused on the company - which was taken over last Friday by the FDIC - and not individuals who ran it, a law enforcement official said Wednesday. The official spoke on the condition of anonymity because he was not authorized to speak publicly about the investigation.
IndyMac Bank’s (IMB) assets were seized by federal regulators after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures.
The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.
The Office of Thrift Supervision said it transferred IndyMac’s operations to the Federal Deposit Insurance Corporation because it did not think the lender could meet its depositors’ demands.
FDIC spokesman David Barr could not immediately be reached for comment Wednesday.
Shortly after the FDIC took over operations, Barr said most depositors were given immediate access to up to $100,000 in their accounts and 50% of any money beyond that threshold. Depositors with joint accounts or retirement accounts could immediately withdraw greater sums.
Depositors were given receivership certificates for any money they couldn’t immediately withdraw and may be able to receive some of that money after the bank’s assets are sold off.
Early this week, hundreds of worried IndyMac customers lined up out of the bank’s headquarters branch in Pasadena, Calif., demanding to withdraw as much money as they could or get answers about the fate of their funds.
Over the last year, and faced with a cratering housing market, the FBI has opened a wide-ranging probe of companies across the financial services industry, from mortgage lenders to investment banks that bundle home loans into securities sold to investors.
Countrywide Financial Corp., (CFC, Fortune 500) the nation’s largest mortgage lender, is also under scrutiny.
Additionally, two former Bears Stearns managers were indicted last month on conspiracy and securities and wire fraud charges alleging they lied to investors in a hedge fund that tanked last year as the subprime market collapsed cash advance loan. Those charges marked the first criminal charges to arise on Wall Street from the subprime mortgage debacle.
In all, the FBI is now investigating 21 companies tied to the subprime mortgage crisis, up from 19 last month. Authorities are looking into at least 1,400 mortgage fraud cases nationwide, and more than 400 real estate industry players have been indicted since March.
FBI Director Robert Mueller has said the investigations focus on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments. Losses homeowners and other borrowers are estimated at over $1 billion.
Telus Corp (T.TO: Quote, Profile, Research) will likely wait for the dust to settle in the courtroom drama surrounding BCE Inc (BCE.TO: Quote, Profile, Research)(BCE.N: Quote, Profile, Research) and its C$34.8-billion ($35.2 billion) privatization before it seriously considers returning with a renewed bid for the company.
Telus, Canada’s No. 2 telephone company, will also want to wait until it sees the outcome of an upcoming auction of Canadian wireless spectrum, which will help it gauge how much more competition is coming to the country’s wireless market.
Analysts say the auction should be wrapped up by mid-July, as should an appeal to the Supreme Court of Canada that was launched by BCE after this week’s surprise court ruling that sided with the company’s bondholders and threatened to scuttle the BCE buyout.
The bondholders alleged that the buyout by the Ontario Teachers’ Pension Plan and its U.S http://pay-day-home.com. private-equity partners is unfair to them.
There would be no point in Telus bidding before the Supreme Court’s opinion is known. If the court sides with BCE and overturns this week’s ruling, the Teachers’ buyout will triumph.
Teachers’ current C$42.75 a share offer price is too rich to match for Vancouver-based Telus, which was in talks last year to acquire BCE before walking away, citing “inadequacies” in the bidding process.
Credit markets are also tight and Telus shares are down 28 percent from a year ago, making them a less attractive takeover currency.
However, if the Supreme Court sides with the bondholders, the Teachers’ buyout could collapse, taking BCE’s already battered share price with it to C$30 or so.
Chevron Corp (CVX.N: Quote, Profile, Research), the second-largest U.S. oil company, said on Friday its first-quarter earnings rose 10 percent as record oil prices outweighed weak profits from gasoline production.
Oil prices have soared more than five-fold since 2002 on surging demand from emerging economies, supply concerns and the weak dollar. They broke $100 a barrel for the first time during the first quarter and hit a record of nearly $120 earlier this week.
Chevron’s largest peers, Exxon Mobil Corp (XOM.N: Quote, Profile, Research), Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) and BP Plc (BP.L: Quote, Profile, Research), all posted sizable gains in the quarter, although Exxon’s results disappointed on weak oil and natural gas production.
Chevron’s net income in the quarter rose to $5.17 billion, or $2.48 a share, from $4.72 billion, or $2.18 a share, a year before online payday loan. Analysts, on average, had expected the company to earn $2.41, according to Reuters Estimates.
Last year’s results included a one-time $700 million gain from the sale of refining assets in the Netherlands.
Sales and other revenue in the quarter rose 40 percent to $64.67 billion.
Benchmark U.S. oil prices averaged a record of nearly $98 a barrel during the quarter, up nearly 70 percent from a year earlier.
But margins to produce gasoline have plummeted, with refiners struggling to push through higher crude costs to customers. First-quarter gasoline prices rose only 33 percent year over year in the U.S. — less than half crude’s rise.
The race is on.
Facing greater scrutiny from regulators and higher losses on loan portfolios as the credit crunch hits the real economy, U.S. and European banks are scrambling to raise over $50 billion to shore up their capital.
Since the start of the financial crisis last summer, some $191 billion of capital has been raised to rebuild the balance sheets of U.S. and European banks, according to UBS research.
While the first round of fund raising had been driven by sovereign wealth funds, a second round, triggered by UBS’ (UBSN.VX: Quote, Profile, Research) $15 billion rights issue on April 1, has mainly been supported by public share sales.
Analysts and bankers are expecting another $50 billion to $80 billion to be raised over the next one to two months following RBS’s (RBS.L: Quote, Profile, Research) 12 billion pound ($23.66 billion) rights issue, as banks improve their capital positions.
It may be better to be safe than sorry.
“I know of several banks who are thinking about doing a rights issue or hybrid convertibles even though they don’t absolutely need the money,” a London-based equity capital markets banker said 500 fast cash.
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