Commerzbank posts surprise fourth-quarter loss
Germany’s second-biggest bank said yesterday it posted a more-than-forecast fourth-quarter net loss of €720mn (€976mn) following charges related to the sale of its Ukrainian bank offshoot and the depreciation of tax assets.
The Frankfurt-based bank said it booked an extraordinary depreciation on deferred tax accruals of €560mn and charges of €185mn following the sale of its Ukrainian Bank Forum operation.
Analysts had expected the partly owned state bank would report a loss of about €560mn in the final three months of 2012.
Net profit last year came in at 6mn euros compared with €638mn in 2011, Commerzbank said.
Announcing the result, Commerzbank said it expects to book restructuring charges of about €500mn during the first quarter of this year as a result of its move to trim its workforce by 4,000-6,000 people over the next four years.
JAL
Japan Airlines said yesterday net profit in the nine months to December fell to $1.52bn, but it lifted its full-year profit forecast by more than 16% despite recent Dreamliner woes.
JAL, which re-listed its shares in Tokyo last year after a high-profile bankruptcy restructuring, credited its European, US and Southeast Asian business for the boost to the earnings estimate.
However, it warned that Tokyo’s strained relations with China and a slow recovery in the global economy made its outlook less clear.
The carrier and rival All Nippon Airways (ANA) have been hit by the worldwide grounding of Boeing’s Dreamliner after a number of incidents including a fire on a JAL plane in Boston and an emergency landing on an ANA flight in Japan.
The global no-fly order imposed by US regulators has seen Japan’s two biggest carriers — major customers of the aircraft, with more than 100 combined orders that are central to their ambitious expansion plans — slash hundreds of flights, affecting tens of thousands of passengers.
The regulators have said they will not allow the 787 to fly again until they are sure the problems around the battery system are fixed.
Yesterday, JAL posted a ¥140.64bn ($1.52bn) net profit in April-December, down 3.7% from a year earlier, but said it would see a profit in the year to March of ¥163bn from an earlier ¥140bn forecast.
Sales over the nine-month period rose 3.6% at ¥942.04bn.
Earlier yesterday, JAL said it has postponed the launch of its Tokyo-Helsinki route due to the Dreamliner problems, with a ¥300mn hit to its January sales over the Dreamliner.
Operating profit in February and March would shrink by ¥500mn, added JAL President Yoshiharu Ueki.
However, JAL’s chief, a former pilot, stood behind the next-generation Dreamliner, which Boeing says is more fuel-efficient due to its construction from lightweight composite fibre materials.
“The battery incident was unfortunate. But it is a wonderful aircraft,” Ueki told a Tokyo press briefing.
Yesterday, JAL said its international passenger segment sales rose 6.7% over the year earlier on new routes and services, while domestic passenger revenue rose 1.7% year on year in the nine-month period.
The domestic figures reflected a recovery following the 2011 quake-tsunami disaster, the carrier said.
JAL re-listed its shares in September, marking a spectacular turnaround three years after it went bankrupt with massive debts and saw its stock delisted from the Tokyo Stock Exchange, Japan’s premier bourse.
The new listing followed a share offering that raised around $8.5bn, the second biggest in the world in 2012 after Facebook’s $16bn offering.
Hitachi
Japan’s Hitachi said yesterday that its quarterly profit plunged 41%, pointing to weaker demand for construction machinery and automotive equipment for the hit to its earnings.
The conglomerate, whose products range from diggers to nuclear reactors, said it earned ¥20.2bn ($217.8mn) in its third quarter to December, down from ¥34.2bn a year earlier.
Sales slipped 7% to ¥2.11tn, it said.
For the nine months to December, Hitachi said net profit was down to ¥50.3bn from ¥85.1bn a year earlier.
The company slashed its full-year to March net profit estimate by ¥50bn to ¥150bn on ¥8.9tn in revenue.
Weakness in the construction equipment unit was largely due to “lower sales of hydraulic excavators due to the impact of lower demand in China”, it said, as concerns remain over the strength of the world’s second-biggest economy.
But Hitachi said its power systems unit as well as social infrastructure and industrial systems division, which includes its elevator and escalator business, both saw a boost in sales.
In October, Hitachi said it would buy British atomic power venture Horizon to expand its nuclear business overseas, as the Japanese remain wary about atomic power after the Fukushima disaster in 2011.
The purchase price was £696mn ($1.09bn).
Horizon planned to build two or three 1,300-megawatt-class reactors at each of two nuclear power stations in Britain and Hitachi will take over the task, the Japanese company said at the time.
Amplats
Strike-hit and top global platinum producer Anglo American Platinum (Amplats) reported yesterday a switch into a steep operating loss in 2012 amid surging operating costs, and said it was focusing on turning its performance around.
The company reported an operating loss of 6,334mn rand for 2012 from a profit of 7,965mn rand in 2011 and said that what it termed headline earnings per share also switched into a loss of 5.62 rand from a profit of 13.65 rand ($1.53, €1.13) in the previous year.
Net debt shot up by 186%, and the company waived its dividend.
The company took a knock from low mineral prices, high inflation levels and wildcat violent strikes.
In a bid to swing back to profitability, the company plans to cut 14,000 jobs and shut two of its shafts in the platinum belt of Rustenburg, northwest of Johannesburg.
“We need to do something about the profitability of the company,” chief executive officer Chris Griffith said in a conference call. “We have got to turn around this company.”
Amplats reported an 8% fall in its output of refined platinum to 2.22mn ounces, mainly because of the two months of industrial action in the last half of the year.
Chief financial officer Bongani Nqwababa said there is still “significant headroom to manoeuvre.”
In response to the rolling losses, the firm has decided to cut its investment programme drastically.
“We have reduced our capital expenditure target for 2013 to 2015 by approximately 11bn rand ($1,2bn, 910,000 euros) and for the next decade by 25%, to 100bn rand ($11,2bn, €8.2bn),” it said in a statement.
The company announced on January 15 that it would lay-off 14,000 workers in a restructuring, but has stalled the process pending talks following an outcry from unions and the government.
Griffith said yesterday that “30% of those jobs are likely to be redeployed within the company.”
Panasonic
Panasonic shares soared nearly 17% yesterday as investors reacted to the Japanese electronics giant’s latest earnings, while rivals Sony and Sharp also spiked on upbeat sentiment.
Panasonic jumped 16.89% to ¥692 in Tokyo morning trade, following the company’s announcement after the close of Friday’s session that it posted an operating profit of ¥121.95bn ($1.32bn) in the nine months to December, and a ¥61.4bn net profit in the last three months of 2012.
That marked a huge reversal from a net loss of ¥197.6bn a year earlier, with Panasonic citing aggressive cost-cutting as part of a massive corporate overhaul aimed at stemming record losses.
However, Panasonic also said it lost about $6.77bn in the nine months to December and was on track to lose a whopping $8.3bn over its fiscal year to March, after posting a record loss in the previous year.
Sony, which reports earnings this week, jumped 9.44% to ¥1,483.
Sharp was up 7.90% to ¥355 by the break, after the embattled maker of Aquos-brand electronics offered a glimmer of hope on Friday, saying it eked out a small operating profit in its October-December quarter.
The company, which last year warned over its survival, also said that its restructuring meant its future as a going concern was no longer in serious doubt, although it doubled its nine-month net loss to $4.6bn.
The embattled trio has seen sales slump on the back of the global slowdown, a strong yen, fierce overseas competition, and strategic blunders as they also took on huge restructuring costs which hit their bottom line. However, the firms have been helped by the yen’s recent slide, which make exports more competitive and ups the value of repatriated foreign earnings.
Yesterday’s surge was also due to short-covering by investors who had bet on a decline in the firms’
share prices, analysts said.
Swatch
Swatch Group said it was optimistic about 2013 as it reported higher margins, providing further evidence the luxury goods sector was set to benefit from improved demand in major markets such as China and the US.
The group, which makes colourful plastic watches as well as Omega and Breguet timepieces, is targeting double-digit growth this year after having enjoyed “continued healthy growth in January.”
Looking ahead, it said it expected long-term growth in the Swiss watch industry of 5-10% per year.
Swatch’s comments come after sector peers such as LVMH and Burberry said last month they expected good trading conditions in China helped by improved consumer confidence after the regime change.
Swatch’s positive outlook and forecast-beating results helped lift the stock more than 3%, compared with an unchanged European sector index.
Swatch said it expected growth to come as well from the high-end jewellery arm of Harry Winston which it acquired last month and which analysts expect to start lifting sales and profit in second half of this year.
The acquisition boosts Swatch’s presence in the jewellery market — which is set to enjoy solid growth this year — as well as in the US where it was not very present and where luxury executives see a rebound.
The group underlined its optimism with a 17% increase in its dividend to 6.75 Swiss francs ($7.48) per bearer share from 5.75 francs in 2011, and 1.35 francs per registered share, previously 1.15 francs.
Full-year results from Swatch, which also makes Tissot watches, showed net income rising 26% to 1.61bn Swiss francs ($1.78bn), far ahead of expectations according to analysts polled by Reuters.
The group’s operating margin rose to 25.4%, versus 23.9% a year ago, which Vontobel analyst Rene Weber contrasted to the decline reported last week by the world’s biggest luxury goods group LVMH.
Julius Baer
Swiss private bank Julius Baer yesterday posted a 15% hike in its 2012 net profit, beating analyst expectations amid healthy cash inflows as global financial markets began bouncing back.
Net profit at the bank, which specialises in wealth management, jumped to 298mn Swiss francs ($328mn, €240mn) last year, while its assets under management swelled 11% to 189bn Swiss francs, it said in a statement.
“We remained well in favour with clients in all our markets in 2012,” company chief executive Boris Collardi said in the statement.
He said “substantial net new money inflow near the top end of our target range underlines the fundamental strength” of the bank.
Analysts polled by financial agency AWP had expected the Zurich-based bank to rake in a net profit of 275mn Swiss francs last year, while managing 189.3bn in assets.
Net inflows at Julius Baer were, meanwhile, down 5.7% last year at 9.7bn Swiss francs.
The board of directors would propose a dividend of 0.60 Swiss francs, unchanged from the year before, the bank said.
Julius Baer, one of Switzerland’s biggest private banks, announced last August that it would buy Merrill Lynch’s wealth management business outside the US and Japan for some 860mn Swiss francs, in a bid to strengthen its presence in emerging markets.
The purchase was finalised last week, the bank said.
“We initiated the transition into Julius Baer’s next strategic phase of growth, (and) the integration ... is well on track,” Collardi said.
Simon Property
Simon Property Group reported a 21.9% increase in a key earnings measure in the fourth quarter, helped by higher rents and sales at its malls and outlet centres, easily beating estimates.
The company also raised its dividend for the sixth straight quarter.
Simon said fourth-quarter funds from operations (FFO) increased to $827.4mn, or $2.29 per share, from $678.9mn, or $1.91 per share, a year earlier. Revenue rose to $1.34bn from $1.17bn.
Analysts, on average, had expected FFO of $2.17 a share, according to Thomson Reuters.
FFO is a REIT performance measure that usually excludes gains or losses from property sales and removes the effect that depreciation has on earnings. The company, the No1 US mall and outlet center owner, also raised its quarterly dividend to $1.15 per share from $1.10 per share. The dividend is payable February 28 to shareholders of record on February 14.
Clorox
Clorox quarterly profit soundly beat analysts’ estimates as a severe flu season boosted sales of disinfecting wipes, and results were helped by a new concentrated version of its namesake bleach.
The company also yesterday raised its full-year sales forecast to an increase of 3% to 5%, from 2% to 4%.
The company, which also makes Brita water filters and Burt’s Bees skin care products, said it earned $123mn, or 93¢ per share, in its fiscal second quarter ended December 31. It earned $105mn, or 79¢ per share, a year earlier.
Analysts, on average, targeted 81 cents a share, according to Thomson Reuters.
Sales rose 9% to $1.33bn, topping the average analyst estimate of $1.27bn.
The volume of goods sold rose 5%.
Price increases and cost cuts have helped Clorox’s recent results. Over the past few years it has raised prices on a variety of products, such as its namesake bleach, Pine-Sol cleaners, GladWare disposable containers and Brita filters, as it has faced higher costs for materials.
Aside from raising its sales forecast, Clorox increased its fiscal-year earnings outlook to $4.25 to $4.35 a share, from $4.20 to $4.35 a share.
Gannett
Gannett Co reported a rise in fourth-quarter revenue on strong ad sales at its television stations and as subscribers paid more for its newspapers as profit topped estimates.
Gannett, the largest newspaper chain in the US, yesterday reported revenue of $1.52bn versus $1.38bn in the year-earlier period, and topped analysts’ expectations of $1.49bn, according to Thomson Reuters.
Part of the increase in revenue had to do with an extra week in the quarter, compared to the same period last year.
Still, the company benefited from political advertising at its local TV stations and from its digital pay model it has rolled out at its newspapers.
Net income totaled $103mn, or 44¢ per share, compared with $116mn, or 49¢ per share for the same period last year.
Excluding special items, earnings came to 89¢ per share compared with 72¢ in the same period last year.