Castrol net jumps 45% to Rs 381cr

MUMBAI: Castrol India has reported a 45% jump in profit after tax for the year ended December 31, 2009 at Rs 381.1 crore against Rs 262.3 crore in
the previous year. Net sales for the fiscal rose 5.1% to Rs 2,318.2 crore from Rs 2,205.7 crore, a company release said.

In the fourth quarter, the company clocked a PAT of Rs 80.8 crore, up 72% over the year-ago figure of Rs 47 crore. Net sales for the quarter was up 14% at Rs 609.5 crore.

Naveen Kshatriya, regional V-P, Asia & Pacific, BP Castrol Lubricants, told ET NOW, this newspaper’s business news channel, the company has done well in the last quarter of the fiscal due to the combination of a couple of things. “First, there is an uptrend in the economy and that’s reflecting in our volumes. Second, we have been very diligent in terms of execution of our strategy, focusing on specific areas and investing heavily in brands... I mean in terms of introducing new products or uplifting the quality of our products,” Mr Kshatriya said.

Ravi Kriplani, COO & automotive director, Castrol India, told ET NOW that the company has seen its volumes bounce back in the fourth quarter. “It’s a combination of better volumes, better margin management and better cost,” he said.

The board of directors of the company has announced a bonus issue in the ratio of 1:1 and recommended a final dividend of Rs 5 per share and a special dividend of Rs 10 per share for FY09. This dividend is in addition to an interim dividend of Rs 10 per share for the full-year 2009.

Mr Kshatriya said the bonus issue was in recognition of the company’s centenary year. “This will improve the liquidity in the market and will enable investors to participate in our business a bit more,” he said.

Mr Kshatriya said the company commands around 21% share of the Indian automotive lubricant market. “But if you look at the areas where we focus on... in the new generation truck oils, in motor cycle oils, in the premium passenger car oils, we have actually shown a growth in market share,” he added. “We will continue to improve our shares in the strategically important areas, Mr Kshatriya said. link...

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U.S. Helps Spanish Company to Buy Texas Bank

Guaranty Bank, a deeply troubled Texas lender, was sold on Friday to Banco Bilbao Vizcaya Argentaria of Spain in one of the largest government-assisted deals offered to a foreign firm.

Cody Duty/American-Statesman

The federal government agreed to absorb most of the losses on $11 billion of Guaranty Bank assets in the sale agreement

Federal regulators seized Guaranty Bank and simultaneously brokered the sale of its branches as well as most of the deposits and assets to BBVA Compass, the Spanish bank’s American subsidiary. The government, however, agreed to absorb most of the losses on $9.7 billion, or more than 80 percent, of the Guaranty assets included in the deal.

The failure is the fourth-largest since the financial crisis began, and the Federal Deposit Insurance Corporation projects that it will cost its deposit insurance fund about $3 billion.

Regulators also arranged for the sales of three smaller banks in Alabama and Georgia on Friday, bringing the total number of bank failures so far this year to 81. That compares with only 25 bank failures in all of 2008.

News that BBVA had submitted the winning bid leaked out earlier this week, but regulators waited until late Friday to orchestrate the takeover. That may be another sign that confidence in the financial system is being restored, since in contrast to past leaks, regulators did not immediately seize the bank over fears of rumors stoking a bank run.

Stockholders in Guaranty Bank will be wiped out, but the deal ensures that its depositors will not suffer losses. Although BBVA did not take control of the failed bank’s $344 million of brokered deposits, the F.D.I.C. said that it would reimburse brokers directly for those funds.

The government also agreed to shoulder the bulk of the losses on all of Guaranty’s loans — a deal sweetener that the government has rarely extended to overseas buyers.

BBVA agreed to buy $12 billion of the $13 billion assets left at Guaranty Bank, which it will ultimately sell to private investors. The F.D.I.C. agreed to take on the remaining $1 billion of assets, as well as cover losses on the $9.7 billion pool of risky loans that BBVA bought. The agreement calls for the government to take on about 80 percent of the first $2.3 billion of losses, and 95 percent of the losses above that threshold.

Loss-sharing agreements have become a standard part of the F.D.I.C.’s toolkit for resolving troubled banks, but rarely have they covered such a big portion of a failed bank’s assets.

And seldom are they offered to foreign buyers. Indeed, it appears the last time that an overseas bank received federal assistance in a failed bank deal was when the Bank of Ireland scooped up four New Hampshire banks in September 1991. link....

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Affordability Leads to Home Sales Spike in South

The last time the South saw such a marked increase in resales was September 2005. Affordable prices made home buying attractive, as did low mortgage rates. Also, first-time buyers rushed to grab a tax credit that expires in November.

And, while foreclosures are expected to be an obstacle into next year, they are making up a smaller percentage of sales in several markets.

In the South, the median sales price of resold homes fell 7 percent to $164,500 -- not exactly a reason to party. But prices have been steadily climbing since January, when the median was $143,300.

Nationally, July sales of existing homes also rose 5.6 percent compared to the same month last year. Median sales prices fell 15 percent to $178,400.

Continuing a months-long trend, home sales once again rose on an annual basis in Washington D.C. and the Florida metro areas of Miami, Orlando and Tampa, according to The Associated Press-Re/Max Housing Report released Friday.

But in July, other markets joined in, with cities such as Little Rock, Ark., and San Antonio, Texas, posting sales increases. In all, eight of the 19 metro areas covered by the AP-Re/Max report showed year-over-year sales gains.

Meanwhile, prices were flat or up in seven Southern cities, with Little Rock leading the way with a 3 percent jump to $144,000, according to the AP-Re/Max report. Miami, by contrast, had a 44 percent decrease to $150,100.

The report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Lawrence Yun, chief economist for the Realtors group, described the Orlando market as recovering. In that central Florida city, ''demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,'' Yun said.

Sales in Orlando rose an eye-popping 64 percent compared with July 2008, with prices dipping 36 percent to $130,000, the AP-Re/Max report showed.

''Assuming that interest rates stay low and that builders don't flood the market with product as things improve, then we're on the road to recovery,'' said Steve Moreira, chief executive of Magic Property and Investments. link.....

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Fidelity Assets Rise 8% to $2.8 Trillion

Fidelity Investments said it expanded its mutual-fund market share in the first half of 2009, stoked by strong investment inflows.

In a presentation in Boston aimed at showing it was doing relatively well in the economic downturn, Fidelity said net investment inflows to its fund family in the half totaled $44.2 billion, which it said was an industry-leading sum. It said revenues were holding up better than the competition's, though it declined to give figures.

The closely held firm is coming off a 2008 performance in which it saw operating profit decline about 18% to $2.36 billion; revenues slid 3.7% to $12.9 billion. It recently shed about 3,000 workers, or about 7% of its former employee base of about 44,000.

Rodger Lawson

President Rodger Lawson, hired two years ago to bolster fund flows and investment performance, said in an interview he believes the company now has the right work-force levels, based on his modest expectations for the economy. "I don't see our head count growing a lot" in the next few years, he said. "That being said, I don't see any more big layoffs."

Mr. Lawson, 62 years old, said it was unlikely he would step down from the post by the end of 2009, although Fidelity has screened "very strong people" as potential future presidents this year as part of succession planning. "I will stay at the company in one role or another as long as Fidelity needs me, even if it's 10 years," he said in an interview. Last month, The Wall Street Journal reported that Mr. Lawson had told a long-time acquaintance he would like to leave by the end of the year.

Assets under management, including mutual funds and other types of investments, grew 9% to $1.36 trillion. Relying on its own calculations and those of an outside consultant, Fidelity said it had expanded its share of all mutual-fund assets to 12.4% from 11.7%.

Fidelity said its assets under administration -- a category that includes other companies' funds it holds in investor accounts -- grew about 8% to $2.8 trillion in the first half.

On the question of U.S. economic recovery, Mr. Lawson said he doesn't see any short-term signs of recovery and anticipates international markets will recover faster. "I think we'll be paying back for the next few years for the largess and the indulgences of the prior few years," he said.

Profit Declines at Eaton Vance

Investment manager Eaton Vance's fiscal third-quarter earnings fell 37% on a charge related to an initial public offering and falling revenue, though assets under management soared from the prior quarter.

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Delta, Atlanta deal to lead to big bond: report

U.S. carrier Delta Air Lines Inc (DAL.N) and the Atlanta airport are close to a lease agreement that would pave the way for an $800 million bond sale, the biggest such offering in the U.S. this year, Bloomberg reported, citing people familiar with the talks.

The world's busiest airport will use the proceeds to pay for a new international terminal, the news agency said. It said the airport is in talks with Atlanta-based Delta and other airlines as their leases expire after 30 years.

A lease accord may come this month, clearing a path for the bonds, the news agency quoted the people as saying.

Delta, the airport's largest tenant, linked the lease negotiations and the debt sale by threatening to move some flights unless the city cut the terminal's price, according to the news agency.

The Atlanta airport and Delta did not immediately respond to calls seeking comment. link.......

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Clearwire's loss narrows, shares fall

Wireless service provider Clearwire Corp (CLWR.O) posted a slightly narrower quarterly loss on Tuesday, but its revenue missed Wall Street estimates, sending its shares down almost 7 percent.

Analysts said subscriber growth was weaker than expected and that some investors had been hoping Clearwire, which is 51 percent owned by Sprint Nextel Corp (S.N), would announce new funding arrangements along with its results.

"The big question revolves around the potential market opportunity and business case for the service," said Soleil Nelson Alpha Research analyst Michael Nelson, who added that Clearwire's 12,000 customer additions were less than half the 25,000 net additions he had expected for the quarter.

The company, which is building a network based on a high-speed wireless technology known as WiMax, did not break out how many customers it had signed up to recently launched markets such as Atlanta and Las Vegas.

Clearwire was progressing in its search for $2 billion to $2.3 billion new financing it needs to fund its plan to expand its WiMax network to cover a population of 120 million people by the end of 2010, Chief Executive William Morrow said.

"We really want to have this buttoned down by the end of this year," Morrow told Reuters. He listed options such as vendor financing, raising new debt, a public equity offering and a strategic investment.

Morrow also said that the company would apply for funding from the U.S. government's broadband stimulus project, but noted that this money, if received, would have to be used for markets outside of its current expansion plan.

The company said its loss narrowed to $73.4 million, or 38 cents a share, from a loss of $74.6 million, or 40 cents per share, in the same quarter a year ago.

Excluding items, its loss would have been 35 cents per share, compared with analysts' average expectation for a loss of 39 cents per share, according to Reuters Estimates. link.....

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Japan Bond Yields Rise to 7-Week High on Signs Recession Easing

Japanese bonds fell, pushing 10-year yields to the highest level in seven weeks, after government reports showed machinery orders and exports improved, curbing demand for the relative safety of debt.

Ten-year yields climbed the most in a week after the Cabinet Office said machine orders increased 9.7 percent in June and a Ministry of Finance report showed the current-account surplus widened for the first time since February 2008. Demand for debt also declined after U.S. reports last week showed companies cut fewer jobs than economists estimated in July and the jobless fell for the first time since April 2008.

“Machine orders in June were certainly good,” said Takashi Nishimura, a Tokyo-based analyst at Mitsubishi UFJ Securities Co., a unit of Japan’s largest bank by assets. “Risk appetite is improving and investors are looking for higher- yielding assets. Bonds are being sold.”

The yield on the benchmark 10-year bond rose 2.5 basis points to 1.455 percent as of 4:33 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price of the 1.5 percent security due June 2019 fell 0.217 yen to 100.387 yen. The yield earlier climbed to 1.46 percent, matching the highest since June 22.

Twenty-year yields climbed four basis points to 2.185 percent and five-year rates increased 2.5 basis points to 0.74 percent. A basis point is 0.01 percentage point.

Ten-year bond futures for September delivery fell the most in two months, declining 0.37 to 137.22, at the afternoon close at the Tokyo Stock Exchange.

Should the 10-year yield advance to near 1.50 percent, investors will likely buy the securities, Nishimura said.

Machine Orders

Bonds declined after the Cabinet Office said machine orders, an indicator of spending by companies in the next three to six months, rebounded from a 3 percent decline in May. The current- account surplus widened to 1.153 trillion yen ($11.86 billion) in June, from 471 billion yen a year earlier, the Finance Ministry said.

U.S. employers cut 247,000 jobs in July after a 443,000 reduction in June, the Labor Department said Aug. 7. The jobless rate declined to 9.4 percent in July from 9.5 percent in June. link....

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Marine Corps logs off social networking sites

The U.S. Marine Corps announced this past week that it will block its troops from logging onto social networking sites — Facebook, MySpace and Twitter, among others — from its computers. The news must have left a few Robins Air Force Base airmen wondering how their Marine counterparts got away with logging onto these sites until now.

“Almost anything that is entertainment related is blocked,” said John Birdsong, spokesman for the base. Robins Air Force Base airmen have long since been prohibited from logging onto social networking sites from their office computers. Most online radio stations and dating sites are also blocked from base computers.

The Marine Corps cited security concerns as the reason to block the sites, though the orders do not apply to Marines in their off-duty hours. Robins Air Force Base airmen are also permitted to log onto social networking sites at home.

Despite the new policy, the U.S. Marine Corps does have an official Facebook page with more than 75,000 friends. The Robins Air Force Base page is less popular; it only has seven friends.

OBAMA OFFICIAL: “WAR ON TERROR” NO MORE

The Obama administration will not use the moniker commonly used to describe the common purpose of post-9/11 engagements, the “War on Terror,” a senior official said last week. John Brennan, head of the White House Homeland Security Office, told an audience in Washington that Obama intends a “clear, more precise definition of the challenge.”

“Terrorism is a tactic, a means to an end,” Brennan said in his prepared remarks to the Center for Strategic and International Studies. “Ultimately, confusing ends and means is self defeating, because you can never fully defeat a tactic like terrorism.”

NAVY ORGANIZATION IN MACON THIS WEEKEND

The regional Fleet Reserve Association will host its 64th convention at the Ramada Plaza in downtown Macon this weekend, beginning Friday. The national association comprises current and former enlisted service members in the Navy, Marine Corps and Coast Guard. This weekend’s convention will bring together members from Georgia, Tennessee, Alabama, South Carolina and Florida. The Fleet Reserve Association last met in Macon in 2000. This convention is expected to bring in about 150 members. They are expected to elect new board members and review bylaws, according to a press release announcing the event.

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* Magna Posts 2Q Loss,45% Sales Drop; Hurt By Vehicle Output Decline

Hurt by major drops in vehicle production, auto-parts giant Magna International Inc. (MGA) swung to a second-quarter loss as sales dropped 45%.

Magna lost $205 million or $1.83 a share in its latest quarter, compared with a profit of $227 million or $1.98 a share a year earlier. Unususal items reduced earnings by 54 cents a share in the latest quarter and 6 cents in the year-earlier quarter.

It posted an operating loss of $237 million versus an operating profit of $319 million.

Sales plummeted to $3.71 billion from $6.71 billion.

Analysts had been expecting a loss of $1.01 a share on sales of $4.10 billion.

During the quarter, Magna's North American vehicle production dropped 49% to 1.8 million units and European vehicle production fell 28% to 3.1 million units%. Its North American and European average dollar content per vehicle fell 10% and 7%, respectively, from a year earlier.

Magna said continued weak automotive sales and higher dealer inventories for many vehicles were largely responsible for the decline in vehicle production.

In the first quarter, Magna suspended its quarterly dividend in a bid to conserve cash, and warned that its results would be hurt in the short term by planned shutdowns at its major customers.

Auto-parts suppliers are struggling from the unprecedented downturn in the U.S. auto industry. Analysts are predicting a very tough second quarter for auto-parts makers, given their high exposure to the Detroit three, especially General Motors Corp. (GM) and Chrysler LLC (C.XX), which both filed for bankruptcy protection in the U.S. in the second quarter. GM is Magna's largest customer and Chrysler is its fourth largest.

Analysts, however, are predicting that as the economic recovery gains momentum, it should help sustain a recovery in light vehicle production over the next three to four years in both North America and Western Europe. UBS is predicting Magna's earnings will recover to $5.28 in 2012 and $6.36 in 2013, but cautions that the path to recovery is not without some risk.

Magna said there appear to be signs of improvement in certain key automotive markets, noting July's U.S. auto sales rate was the highest so far in 2009.

As reported, Magna and RHJ International SA (RHJI.BT) submitted final offers for GM's Adam Opel GmbH unit on July 20 and the two companies have been in talks with GM this week. Politicians and Opel's union have been clear in their preference for Magna, though reports Thursday said the U.S. government has reservations about a sale to Magna if Russian investors would gain acess to GM patents, particulary military ones. Magna is bidding for Opel with Russian bank Sberbank (SBER.RS). link....

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PRECIOUS-Gold inches up as dollar stays weak vs euro,ETF flat

Gold inched up on Thursday, drawing
support from the dollar's weakness against the euro and investor
risk appetite which has helped boost assets across markets.

FUNDAMENTALS

* Spot gold XAU= was up 0.2 percent at $963.60 per ounce as
of 0000 GMT, compared with New York's notional close of $961.95.

* U.S. gold futures for December delivery GCZ9 were little
changed at $966.50 an ounce, compared to $966.30 an ounce on the
COMEX division of the New York Mercantile Exchange.

* Gold futures dipped on Wednesday as weaker equities
prompted funds to consolidate recent profits, but the market drew
support from a renewed appetite for risk among investors.

* The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust GLD, said holdings stood at 1,072.87 tonnes as
of Aug. 5, unchanged from the previous business day. [GOL/SPDR]

MARKET NEWS

* The Nikkei was up 0.1 percent. [.T]

* U.S. stocks slipped on Wednesday after weak data on the
services sector and private payrolls cooled recent optimism the
recession was retreating, but the market finished off its lows as
investors ventured into riskier financial shares. [.N]

* The dollar stayed near its 2009 lows against the euro on
Thursday, after hitting a nine-month low versus the single
currency and slipped against the yen the day before on hopes a
slower pace of U.S. private job losses in July hinted at a
gradual improvement in the economy. [USD/]

DATA EVENTS

* The following data is expected on Thursday: ECON

- Japan coincident indicator for June. (0500 GMT)

- Germany June industrial orders. (1000 GMT)

- Bank of England policy decision. (1100 GMT)

- European Central Bank policy decision. (1145 GMT)

- ECB's President Jean-Claude Trichet holds a news
conference. (1230 GMT)

- Weekly U.S. jobless claims. (1230 GMT)

RELATED NEWS

>Gold dips but risk appetite supports market [GOL/]

>HSBC raises '09 gold forecast to $925 vs $875 [ID:nN05267339]

>South Africa strike threat ups power cut fears [ID:nL5252552]

>US jobs, services data raise recovery worries [ID:nN05240699]

>Oil, copper up but analysts wary of correction[ID:nN05282940]

PRICES

Precious metals prices at 0000 GMT
Metal Last Change Pct chg Day ago pct MA 30 RSI
Spot gold $963.45 $1.50 +0.16% +7.41% $860.10 66
Spot silver $14.66 $0.02 +0.14% +22.37% $11.29 75
Spot plat $1279.00 -$3.50 -0.27% +34.77% $948.98 78
COMEX gold $964.30 $76.10 +8.57% +7.20% $857.64 64
TOCOM gold 2,946 363 +14.05% +12.92% 2,476 66
TOCOM plat 3,900 1160 +42.34% +41.05% 2,659 76
Currencies
Euro/dlr $1.441 $0.127 +9.70% +9.36%
Dlr/yen 94.79 4.41 +4.88% +6.60%
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Cisco’s Sales Will Drop as Much as 17%, Chambers Says

Cisco Systems Inc., the largest maker of networking equipment, predicted that revenue will drop for a fourth straight quarter as the recession crimps orders of networking equipment.

Revenue will fall 15 percent to 17 percent in the fiscal first quarter, which ends in October, the company said today. That equates to between about $8.6 billion and $8.8 billion, down from $10.4 billion a year earlier.

Global sales of routers and switches, which account for almost half of Cisco’s sales, will fall about 20 percent this year, according to the research firm Dell’Oro Group. Chief Executive Officer John Chambers aims to revive growth by getting into markets such as video cameras and computer servers.

“It’s disturbing in the fact that you’d like to see them gaining momentum,” said Cisco investor Daniel Morgan, a portfolio manager for Synovus Securities Inc. in Atlanta. “But then you have to take a step back and realize what’s going on in the industry.”

Cisco, based in San Jose, California, fell 74 cents to $21.43 in late trading after giving the forecast. The shares, up 36 percent this year, closed at $22.17 today on the Nasdaq Stock Market.

Profit Margin

The company’s gross margin -- the percentage of sales remaining after production costs -- will be 64 percent this quarter, Cisco said. That compares with 65.3 percent last quarter. Less-profitable consumer products could be taking a toll, said Mark Demos, portfolio manager for Fifth Third Asset Management in Minneapolis.

“The big issue is profitability,” said Demos, who helps manage $19.8 billion in assets. His firm had about 3 million shares of Cisco as of March 31. “They’re saying there could be an issue because of a mix of products.”

Orders began to rebound in the fourth quarter, though it’s too early to tell if the recovery will last, Chambers, 59, said on a conference call.

Sales in the fourth quarter were typical for the season, unlike the previous three quarters, he said. “While it’s too soon to call a recovery, it’s the first positive trend we’ve seen,” Chambers said.

Fourth Quarter

Fourth-quarter net income fell 46 percent to $1.08 billion, or 19 cents a share, from $2.01 billion, or 33 cents, a year earlier, Cisco said today. Excluding costs such as stock compensation, profit was 31 cents. Analysts in a Bloomberg survey had estimated 29 cents on average.

Revenue fell 18 percent to $8.54 billion in the quarter, which ended July 25. Analysts had projected $8.51 billion.

To cope with the slump, Cisco just completed more than $1.5 billion in budget cuts. It eliminated more than 2,000 jobs, curtailed hiring and merged offices. Cisco had $35 billion in cash and equivalents at the end of last quarter, up from $26.2 billion a year earlier.

Investors view Cisco as a technology-industry bellwether because it dominates the market for routers and switches, products that direct the flow of data. Large companies account for most sales of switches, used to run their corporate networks. Phone carriers and Internet-service providers mostly purchase routers, which are costlier. link.....

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Xstrata Profit Falls 77% After Metals Prices Drop

Xstrata Plc, the world’s largest exporter of coal used for power, said first-half profit fell 77 percent after metals prices slumped.

Net income slipped to $643 million, from $2.77 billion a year earlier, the Zug, Switzerland-based company said today in a statement. That missed the $773 million median of six analyst estimates compiled by Bloomberg. Sales dropped 39 percent to $9.9 billion.

Chief Executive Officer Mick Davis is proposing a “merger of equals” with Anglo American Plc and has cut spending and output of some metals after commodity prices slumped in the second half of 2008 amid a global economic slowdown. Xstrata, the world’s fourth-largest copper producer, is still seeking talks with London-based Anglo, which rejected the bid in June.

“This is without doubt an opportunity which merits serious consideration, without the defensiveness and usual distractions that often stand in the way of the pursuit of shareholder value,” Davis said in today’s statement.

Davis, who wants to combine mines in Canada, Australia and South Africa with nearby sites operated by Anglo, said the merger would add $1 billion a year to the enlarged company’s earnings before interest, tax depreciation and amortization by the third year following the deal. The merger would also give Xstrata access to platinum, diamond and iron ore through Anglo’s stakes in Anglo Platinum Ltd., De Beers and Kumba Iron Ore Ltd.

Cost Reduction

Anglo CEO Cynthia Carroll last week said the approach was “a distraction” and reiterated her pledge to boost job cuts to 19,000 this year to help save $2 billion of costs by 2011.

Xstrata reduced operating costs by 1.1 percent to save $119 million in the first half, the company said. Its debt to equity ratio fell to 28 percent, from 40 percent at the end of 2008 following a 4.1 billion-pound ($7 billion) rights offer which completed in March, it said.

“While some uncertainty remains over the short-term outlook, the medium to longer-term fundamentals for commodities remain very robust,” Davis said.

Xstrata last week reported first-half production of coal rose 11 percent on increased output from the Newlands Northern mine in Australia and as the inclusion of the Prodeco unit’s Colombian mines added 5 million tons of output.

Chrome Slump

Mined copper and nickel production also rose while chrome output slumped 60 percent as Xstrata’s venture with Merafe Resources Ltd. suspended 17 of 20 furnaces in response to weak demand.

Average realized prices for Australian thermal coal rose 14 percent in the first half to $89 a metric ton, while prices for coking coal, used in steelmaking, fell 14 percent to $143 a ton, the company said last week. Coal was the largest contributor to Xstrata’s operating earnings last year, followed by copper.

The average price of copper for immediate delivery on the London Metal Exchange fell 50 percent in the first half to $4,067 a ton from a year earlier. Nickel prices slid 57 percent to $11,788 a ton and zinc slumped 42 percent to $1,330 a ton. link....

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Nissan Rises in Tokyo After Displaying Electric Car

Nissan Motor Co., Japan’s third- largest automaker, rose to the highest in 10 months after displaying its first electric car, aimed at a market it anticipates will be larger than hybrids.

Nissan gained 5.4 percent to 726 yen, the highest since Sep. 29., at the close of Tokyo Stock Exchange trading.

Nissan Chief Executive Officer Carlos Ghosn said yesterday electric cars may account for at least 10 percent of global vehicle sales by 2020. Nissan has failed to match the popularity of Toyota Motor Corp.’s Prius hybrid and Honda Motor Co.’s Insight, and is betting demand for emission-free cars will offset the restrictions of limited range.

“Investors are jumping to Nissan after it actually unveiled the much-awaited car,” said Koichi Nishi, an equity strategist at Nikko Cordial Securities Inc. “Products that fulfill the promise of environmental-friendliness are encouraging.”

The company plans to sell its electric car, the Leaf, in the U.S., Japan and Europe next year. Nissan’s new electric car can travel 100 miles on a full charge and can seat as many as five people. The car’s lithium-ion battery pack can be fully recharged at a 200-volt outlet in eight hours, or in less than 30 minutes from a so-called fast-charge station, according to Nissan. In contrast, hybrids can refuel at conventional gasoline stations.

U.S. Loan

Nissan aims to use a $1.6 billion U.S. loan to retool a factory in Tennessee so battery-powered cars can be made on the same line that currently produces hybrids and other models. The automaker will also receive grants and loans from the U.K. and Portugal to build factories for lithium-ion batteries. The company hasn’t disclosed the amount of aid it will receive from the two European governments.

The Japanese automaker has said it will have the capacity to produce 200,000 electric vehicles in the U.S., 100,000 in Europe and 50,000 in Japan. Nissan and partner Renault SA, which owns 44 percent of the Japanese carmaker, plan to offer electric vehicles in the U.S. and Japan starting in 2010 and globally in 2012.

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BEFORE THE BELL:US Futures Down Before Orders Data, Beige Book

U.S. stock futures slipped on Wednesday ahead of the release of a Federal Reserve report on the state of the economy.

S&P 500 futures fell 3.4 points to 972.30 and Nasdaq 100 futures slipped 3.25 points to 1,598.20. Futures on the Dow Jones Industrial Average lost 31 points.

U.S. stocks finished mostly lower on Tuesday after a dip in consumer confidence, as the Dow Jones Industrial Average dropped 11 points and the S&P 500 fell 2 points, while the Nasdaq Composite rose 7 points.

Economic rebound hopes that have driven stock markets since second-quarter earnings season began will be tested as data on durable goods orders for June will be released at 8:30 a.m. Eastern and the Federal Reserve's Beige Book of anecdotal evidence on the economy will be released at 2 p.m.

"We expect a bit better tone than seen in the past couple of Beige Book reports indicating some progress toward economic recovery. Specifically, the summary should reference widespread indications of a slower pace of decline and some signs of tentative stability in economic conditions," said David Greenlaw, an economist at Morgan Stanley, in a note to clients.

New York Fed President William Dudley also is speaking on the factors driving growth and inflation, with his speech due to start at 8:30 a.m. EDT.

There's another heavy day of reports in the U.S. as well, with ConocoPhillips (COP), General Dynamics (GD) and Time Warner (TWX) among the companies due to release figures on second-quarter performance.

Health-care firms WellCare Health Plans (WCG) and McKesson (MCK) may rise on better-than-hoped 2009 outlooks, and Conseco (CNO) may climb after the insurer forecast a second-quarter profit.

A number of insurers will report results after the closing bell.

The big move in international stock markets came out of Shanghai, where the Shanghai Composite ended 5% lower in late afternoon selling.

Hong Kong stocks also dropped, while fortunes were brighter in Europe, where automakers and chemicals firms led a 0.9% advance for the Dow Jones Stoxx 600.

The dollar rose against both the yen and the euro, while oil futures slumped $1.54 to $65.69 a barrel ahead of weekly energy inventory data.

Yields on 10-year Treasury bonds fell 3 basis points to 3.66%. Yields move in the opposite direction to prices. link......

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Hitachi Offers to Buy Out Units for 282.2 Billion Yen

Hitachi Ltd., Japan’s third-largest manufacturer, offered to buy out five publicly traded subsidiaries and affiliates for 282.2 billion yen ($3 billion) to help speed up business decisions and reduce overlapping costs.

The company will acquire outstanding shares of Hitachi Maxell Ltd., Hitachi Software Engineering Co., Hitachi Information Systems Ltd., Hitachi Plant Technologies Ltd. and Hitachi Systems & Services Ltd., according to statements to the Tokyo Stock Exchange today.

President Takashi Kawamura aims to lower costs by 500 billion yen this fiscal year by cutting jobs, separating some operations and merging its unprofitable chip unit with another semiconductor maker. Hitachi, recovering from a record annual loss, plans to reduce more than 100 units by March 31.

“Investors have no idea what the company wants to focus on. By buying out the units, Hitachi’s made it even more ambiguous,” said Seiichiro Iwamoto, who helps manage $977 million of Japanese stocks at Mizuho Asset Management Co. in Tokyo, which owns Hitachi shares. “I’m doubtful the company will gain from what they spend to buy those affiliates.”

Hitachi fell 3.6 percent to close at 293 yen on the Tokyo Stock Exchange. The stock has lost 15 percent this year, while the benchmark Nikkei 225 Stock Average has climbed 14 percent.

Shares Rise

The Nikkei newspaper reported yesterday Hitachi may spend 300 billion yen for the buyouts, sending shares of the five units up by their daily limits in Tokyo trading. The stocks all rose again today.

Hitachi, based in Tokyo, in March spent 26.7 billion yen increasing its stakes in Hitachi Koki Co. and Hitachi Kokusai Electric Inc. Hitachi Mobile Co. and Hitachi Electronics Engineering Co. were bought out and de-listed.

Hitachi today reported an 82.7 billion yen net loss in the three months ended June 30, compared with a 31.6 billion yen profit a year earlier. The operating loss, or sales minus the cost of goods sold and administrative expenses, was 50.6 billion yen, compared with 77.7 billion yen profit a year earlier, as revenue fell 26 percent.

The maker of products ranging from nuclear reactors, household appliances to hard-disk drives kept its May forecast for annual loss to narrow to 270 billion yen this fiscal year.

‘One-Stop Service’

The buyouts of Hitachi Information Systems, Hitachi Software and Hitachi Systems & Services would allow the parent to offer “one-stop service” comprising of data centers, consulting, as well as information-technology software and hardware, the company said. Buying Hitachi Maxell would help speed up the development of lithium-ion batteries for industrial use, the parent said.

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Cash for clunkers has curious car-hunting

Car shoppers can take advantage of new government incentives worth $3,500 to $4,500, and trade in a clunker for a new, more fuel-efficient vehicle.

The federal "cash for clunkers" program started Friday and some local dealerships are already starting to see prospective buyers.

In an effort to spur auto sales and retire some fuel inefficient cars and trucks from the road, Congress approved $1 billion for drivers to trade in their cars for models that get more miles per gallon of gasoline. New vehicles must have a price of less than $45,000.

Tom Van Prooyen, owner of Schepel Buick-GMC Truck in Merrillville, said word of mouth for the program had people expressing interest in a trade-in for the last month.

"It is stimulating interest in car sales and definitely might create some sales where there weren't before," Van Prooyen said. "People are finding out maybe we don't qualify, but it's putting more interest in making an automotive purchase."

To participate in the program, vehicles must meet several benchmarks:

* It must have been manufactured less than 25 years before the date you trade it in, but no later than 2001.

* It must have a combined city/highway fuel economy of 18 miles per gallon or less and be in drivable condition.

* The vehicle must be continuously insured, titled and registered to the same owner for the full year preceding the trade-in.

Van Prooyen said the last qualification prevents people from just trading in a clunker that they haven't insured in years.

He said it's worth checking out a vehicle's blue book value before taking advantage of the program.

"If your vehicle is worth $5,000 or $8,000, you probably don't want to use this program; you would probably want to trade it in on its own," Van Prooyen said.

The incentives vary depending on the fuel efficiency of the new vehicle. For example, with passenger cars, consumers can get $3,500 if the new vehicle gets at least 4 mpg more than the trade-in and $4,500 if the new vehicle gets at least 10 mpg more than the trade-in.

With SUVs, pickups or minivans, owners can get a $3,500 rebate if the new vehicle gets at least 2 mpg higher and $4,500 if the new vehicle gets at least 5 mpg higher than the trade-in. Large work trucks weighing at least 6,000 pounds can also qualify for rebates of $3,500 to $4,500.

Dealers must use the rebate in addition to -- instead of as a substitute for -- other rebates and discounts available to consumers. Many automakers are combining internal incentives with the government rebates to lure customers to showrooms. For example, Chrysler is offering $4,500 in cash toward the purchase of a new vehicle. Dealers are also required to disclose the best estimate of the salvage value of each vehicle.

The program will be in effect until Nov. 1. link.....

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TeliaSonera Second-Quarter Profit Rises on Cost Cuts

TeliaSonera AB, Sweden’s largest telephone company, said second-quarter profit increased 8.2 percent as it cut costs to make up for lower customer spending.

Net income rose 8.2 percent to 4.47 billion kronor ($595 million), or 1 krona a share, from 4.13 billion kronor, or 0.92 krona, a year earlier, the Stockholm-based company said in a statement today. Sales increased 8.7 percent to 27.5 billion kronor. The stock rose as much as 7.5 percent.

Revenue was hurt by lower equipment sales, lower usage and less business travel, the company said. TeliaSonera raised its margin forecast for this year, citing measures that reduced its cost base by 5.8 percent in the second quarter from a year earlier. The company is cutting 2,900 jobs by the end of 2009.

“The margin was excellent due to cost cuts and the upped Ebitda guidance is clearly positive,” said Kimmo Stenvall, an analyst at Finland’s Pohjola Bank who has an “accumulate” rating on the stock. Stenvall said he will probably increase his target price of 45 kronor after today’s report.

TeliaSonera predicts its margin based on earnings before interest, tax, depreciation and amortization will be higher than last year’s level of 31.8 percent excluding non-recurring items. The previous forecast was for an unchanged margin at that level.

TeliaSonera rose as much as 3.3 kronor to 47.4 kronor, the most in eight months. It traded at 46.9 kronor as of 11:04 a.m. in Stockholm, giving the company a market value of 211 billion kronor. Before today, the stock had risen 13 percent this year.

Revenue Outlook

TeliaSonera trimmed its revenue forecast to “in line with or slightly below the level of 2008” from “around the same level” as last year, based on local currencies and excluding acquisitions. Until April, TeliaSonera had forecast higher revenue this year.

“Looking ahead, we expect that our efforts to lower addressable costs and capital expenditure will offset the negative impact from declining GDP and rising unemployment in our markets,” Chief Executive Office Lars Nyberg said in the statement.

TeliaSonera said sales in its mobility services unit went up almost 8 percent to 13 billion kronor in the period, boosted by mobile data and mobile broadband in Sweden.

The economic slump has so far had limited effect on sales in the broadband services unit, where TeliaSonera said it’s still investing in faster networks to support Internet Protocol TV and broadband. The unit reported sales of 10.7 billion kronor. link.....

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Earnings Climb Nearly 8% at Yahoo

SAN FRANCISCO — Carol Bartz, Yahoo’s chief executive, is known for peppering her public presentations with the odd expletive or two. But her conference call Tuesday to discuss Yahoo’s second-quarter financial results was entirely family-friendly. Then again, Ms. Bartz did not have much to swear about.


Paul Sakuma/Associated Press
“I think Microsoft should be getting kudos for Bing,” Carol Bartz, Yahoo’s chief, said in a conference call with investors.
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Times Topics: Yahoo! Inc.

Yahoo’s revenue declined 13 percent in the second quarter as advertisers continued to reduce spending in the downturn. But cost-cutting initiatives helped to soften the blow, and profits climbed nearly 8 percent, beating analysts’ expectations.

Yahoo also said that it planned a new round of investment in products and a rebranding campaign, which would lead to a drop in profit in the current quarter. Investors reacted by sending shares down nearly 3 percent in after-hours trading.

“Over all, the long and protracted turnaround process continues,” said Jeffrey Lindsay, an analyst with Sanford C. Bernstein & Company. “We don’t see a catalyst that is going to turn things around soon.”

Yahoo continues to discuss a search and advertising partnership with Microsoft that would create a more viable rival to Google. The talks have intensified recently, according to people briefed on them.

Both companies have declined to discuss their talks publicly and, for the first time since Ms. Bartz became chief executive in January, analysts did not ask her about them.

But Ms. Bartz recognized that Yahoo’s search business would fare better with many more users, or more “scale,” and she praised Bing, Microsoft’s new search engine. “I think Microsoft should be getting kudos for Bing,” Ms. Bartz said in a conference call with investors. “They’ve done a nice job.”

Some analysts interpreted those comments as an indication that she appeared more willing to consider a deal than ever before.

“She talked about scale being an issue,” said Ross Sandler, an analyst with RBC Capital Markets. “She talked about Microsoft having a pretty good search engine. That’s all an admission that it might make sense for these parties to come together.”

Yahoo reported net income of $141 million, or 10 cents a share, compared with $131 million, or 9 cents a share, a year earlier. Revenue dropped to $1.57 billion, from $1.8 billion a year earlier.

Net revenue, which excludes commissions paid to advertising partners, was $1.14 billion, down 15 percent from $1.35 billion a year earlier.

On average, Wall Street analysts had expected Yahoo to report net income of 8 cents a share on net revenue of $1.14 billion.

“Considering the economy I am pleased with our results,” Ms. Bartz said. “Over all we are seeing less fear in the marketplace.” Ms. Bartz said advertisers appeared ready to spend more, but she added that it was too early to say how that would affect Yahoo.

Yahoo said search advertising revenue on its sites declined 15 percent, even as the number of searches on Yahoo rose. By comparison, Google, whose business is largely driven by search advertising, last week reported a 3 percent growth in revenue. Analysts said Yahoo did not give good reasons for the disappointing results.

On Tuesday, Yahoo also introduced an overhauled home page, a major initiative intended to restore its luster with users, advertisers and investors.

The new home page allows users to preview Yahoo services like mail and Flickr, and also third-party applications and sites, like Facebook, Gmail or BBC World News, in a section on the left side of the page called My Favorites. As Internet users’ attention is increasingly fragmented across a growing number of sites and services, the company’s decision to include third-party content on its home represents an effort by Yahoo to establish itself as the “center point of people’s lives online,” said Tapan Bhat, a senior vice president at Yahoo who is responsible for the company’s home page.

With 114 million visitors in June in the United States alone, Yahoo.com remains the most visited home page online. But Yahoo’s efforts to cash in on its huge audience have faltered in recent years, as prices for premium brand ads have declined and as advertising networks have given marketers the ability to reach large audiences across vast arrays of Web sites at lower cost. link....

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Teenagers may receive pay raise this week

Michigan teenagers who have jobs might see a pay raise this week.

Michigan's subminimum wage, a wage paid to employees younger than 18, will jump from $6.55 to $7.25 when the federal minimum wage rises to that rate on Friday.

Administrator Jack Finn of Michigan's Wage & Hour Division says the federal wage increase will not affect Michigan's minimum wage of $7.40 per hour.

Under Michigan law, the subminimum wage is set at either the federal minimum wage or 85 percent of the state minimum wage, whichever is higher.

Many teenagers under 18 already earn more than the federal minimum wage. link....

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HK shares gain for 4th day; China stocks at 13-mnth high

Hong Kong shares jumped 2.4 percent in a fourth straight winning session on Friday as investors, cheered by strong earnings reports from U.S. companies and reassuring data from China, flocked to banking and property stocks.

Shanghai stocks lagged, inching up to a 13-month closing high, bolstered by this week's solid economic data and a surge in aluminium shares on hopes producers will soon reach an agreement that will slash their energy costs.

BEST WEEKLY GAIN IN HK SINCE END-MAY

The benchmark Hang Seng Index closed up 443.79 points at 18,805.66, gaining 6.2 percent in its best weekly advance in seven weeks.

Turnover dropped to HK$66.2 billion ($8.5 billion) from HK$70.9 billion on Thursday. Average daily turnover, which has been on the decline since a year-high of around HK$80 billion in May, has been languishing at an average HK$57 billion so far in July.

"Falling turnover is calling for more caution on the market's direction. Even if the index can make its way up to 20,000 points in the near term, it can change direction momentarily," said Alex Tang, research director with Core Pacific-Yamaichi International.

The China Enterprises Index, which represents top locally listed mainland Chinese stocks, finished up 2.2 percent or 243.96 at 11,146.43.

Heavyweight HSBC (0005.HK) led the charge with a 2.2 percent gain after its U.S. peer JPMorgan trumped expectations with its quarterly earnings on Thursday.

"A number of companies have already issued profit warnings here, so earnings are likely to be mixed. Further upside seems relatively difficult once corporate results start pouring in. Investors would much rather put their money into the IPO market," said Ben Kwong, chief operating officer with KGI Asia.

Orient Overseas (International) (0316.HK) clawed back 49.6 percent after a programme trade in the final minute of trade on Thursday sent the stock plunging 32 percent. The stock rose to HK$34.40 after closing at a 2-½ month low of HK$23 in the previous session.

China WindPower Group (0182.HK) dropped 6.2 percent after saying it would sell 700 million new shares to major shareholder Gain Alpha in a top-up placement to raise HK$579 million ($74.71 million) to fund acquisitions and increase installed capacity.

Hisense Kelon Electrical Holdings (0921.HK) gained 23.6 percent to HK$1.73 after agreeing buy home electronics manufacturing and sales assets from parent Qingdao Hisense for 1.24 billion yuan ($181.5 million). Its Shenzhen-listed shares (000921.SZ) gained 0.3 percent. The deal will be settled by an issue of up to 362.05 million A shares at 3.42 yuan each. link.....

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