Toyota yesterday said it was on track for record $17.5bn full-year net profit, as Japan’s major automakers wrapped up a bumper earnings season, but a slowdown in Asia, including China, could slam the brakes on growth.
The world’s biggest automaker revised up its fiscal year profit forecast by 12.4% to ¥2.0tn, and said revenue would come in at ¥26.5tn, as it saw strong results in North America.
It also booked a ¥1.13tn net profit for the six months through September, from ¥1.00tn a year ago, while revenue rose 3.3% to ¥12.94tn.
The results came a day after rival Nissan said its half-year net profit rose 25% to ¥237bn and Honda last week reported a nearly 19% jump in its six-month net profit to ¥288.41bn.
The Japanese auto industry has benefited from the big-spending policies of Prime Minister Shinzo Abe, with huge monetary easing measures from the premier’s hand-picked team at the Bank of Japan helping push down the yen since last year.
A weaker yen boosts the competitiveness of exporters and inflates their repatriated overseas profits, although analysts say the effect has been waning in recent months.
Toyota reported a nearly 7.0% increase in the huge market, but half-year results were down in some other key Asian markets including Indonesia and Thailand, which has been hammered by political unrest, with sales tumbling 26% from a year earlier.
Toyota’s North American unit sales rose 7.5% to 1.39mn and Europe saw a 1.78% increase to 414,217 vehicles.
Magna
Canadian auto parts maker and contract vehicle manufacturer Magna International reported a 47% jump in third-quarter earnings that beat analyst expectations yesterday, boosted by strong demand in North America.
Adjusted earnings before interest and taxes in North America, the company’s biggest market, grew to $470mn in the quarter through September 30, from $365mn a year earlier. External production sales were up 10% at $4.43bn.
Magna raised its forecasts slightly for full-year 2014 light vehicle production to 17.0mn units in North America, from 16.9mn forecast previously, and to 20.2mn units in Europe, from 19.8mn.
Automakers reported their strongest US sales for October in more than a decade on Monday, and Canadian sales are on track to set an all-time record in 2014.
Net income attributable to Magna rose to $470mn, or $2.19 per share, from $319mn, or $1.39 per share, a year earlier.
Duke Energy
Duke Energy Corp, the largest US power company by market value, reported a lower-than-expected quarterly revenue and profit as a milder summer hit demand and expenses rose.
The company’s shares were down 1.5% at $81 before the bell yesterday.
Duke said demand was hurt by a below normal weather in the Carolinas and in the Midwest.
The company’s income from its international energy unit was hurt by lower volumes and higher purchased power costs in Latin America.
Duke said expenses for fuel used in power generation and purchase in the regulated sector rose 6%, while it jumped about 14% in the non-regulated business.
Net income attributable to Duke rose 27% to $1.3bn, or $1.80 per share, in the quarter ended Sept. 30, from $1bn, or $1.42 per share, a year earlier.
Penn West
Penn West Petroleum, one of Canada’s largest conventional oil producers, reported a third-quarter loss, hurt by a drop in production and weaker oil prices.
The net loss was C$15mn, or 3 Canadian cents per share, in the quarter ended September, compared with a profit of C$34mn, or 7 Canadian cents.
Total average production fell 25%.
Gross revenue fell 24.5% to C$584mn ($510.3mn).
Funds flow, a key measure of a company’s ability to pay for new projects and drilling, fell 22% to C$231mn, or 47 Canadian cents per share, from C$296mn, or 61 Canadian cents.
Hannover Re
German reinsurer Hannover Re said yesterday it is confident of meeting its full-year targets after a strong rise in profits in the third quarter and first nine months.
“In view of its results for the first nine months, Hannover Re is confident of achieving its full-year targets for 2014,” the group said in a statement.
In concrete terms, Hannover Re said it is pencilling in “stable to slightly higher gross premium and net profit in the order of €850mn” ($1.06bn) for the whole of 2014.
In the period from July to September, Hannover Re booked a 21.4% rise in net profit to €251mn.
Underlying or operating profit rose by 39.1% to 407.1mn euros on a 9.9% increase in gross premium income to €3.64bn.
ING
ING Group NV, the largest Dutch bank, said it would repay the last of its state aid ahead of schedule this week, signalling an extra dividend for shareholders as lending growth drove a jump in pretax earnings.
In its first full quarter as a pure banking business, ING’s underlying earnings before tax from its banking operations rose more than a third to €1.5bn ($1.88bn), beating analysts’ average forecasts of €1.4bn.
The bank, once the globe-spanning flagship of Dutch financial capitalism and still Europe’s eighth largest by stock market value, was forced to retrench in the years after the financial crisis, taking €10bn in state aid in 2008 and selling many of its international businesses.
It sold a stake in its insurance arm NN Group in July to comply with the terms of the rescue package.
Announcing the early repayment of the final 1bn euro tranche of aid, Chief Executive Ralph Hamer said the bank was seeing signs of a recovery in its home market and of structural recoveries in parts of Europe.
ING’s interest income rose 7.5% year on year while the underlying interest margin improved to 1.53% from 1.44%. Loan loss provisions were cut by 41.7% as lending risks fell in commercial banking and general lending.
Voestalpine
Steelmaker Voestalpine kept its forecast for higher operating profits this financial year, even after stripping out one-off boosts to income, despite a difficult business environment in Europe.
The Austrian firm said yesterday earnings before interest and tax (EBIT) in its second quarter to the end of September were €226mn ($283mn), above the average estimate of €197mn in a Reuters poll.
Its core profit in the three-month period, however, was boosted by one-off items of €45.2mn from assets sales in its Metal Forming Division and a pensions reorganisation in some of the division’s Dutch companies.
Voestalpine shares fell 1.7% after the release of the second-quarter results. The company said the second-quarter one-off items helped it counter slightly declining sales in the first half as a whole. The company’s specialised steel products for its core automotive and energy businesses generate more than 60% of revenues.
It said operating profit in the first half rose 12.2% to €444.7mn.
Lancashire
Lancashire Holdings, a British property and casualty insurer, posted a 40% rise in third-quarter profit, helped by fewer major catastrophe losses and its acquisition of Lloyd’s of London insurer Cathedral Capital.
The company, which writes policies for heavy-duty assets such as oil rigs, ships and aircraft, also said it would pay a special dividend of $1.20 per common share. Pretax profit rose to $36.1mn in the quarter ended September 30 from $25.7mn a year earlier.
Net premiums earned were up 34% to $179.6mn, due mainly to Lancashire’s Lloyd’s of London business that came with its acquisition of Cathedral in late 2013.
HKEx
Hong Kong Exchanges & Clearing (HKEx) posted a 6% rise in third-quarter profit as trading volumes climbed ahead of a proposed trading link with Shanghai, but said it did not know when the delayed scheme would launch.
The world’s second-largest listed stock market operator reiterated that while it had completed preparations, the scheme, seen as a milestone in the opening up of China’s capital markets, had not received regulatory approval.
The launch had been expected on October 27 and the Hong Kong Securities and Futures Commission had also said it is ready. Charles Li, chief executive of the bourse, said last month he could not clarify which agency in Beijing is responsible for giving the green light. Some market watchers believe the launch date might have been postponed due to China’s dismay over pro-democracy protests in Hong Kong, which have paralysed parts of the financial centre.
Lack of clarity on how capital gains tax will be applied is also hindering the launch of the scheme, market professionals speaking at a Reuters China Summit said last week.
The bourse’s net profit climbed to HK$1.28bn ($165mn) in July-September from HK$1.2bn a year earlier, according a Reuters calculation from HKEx’s statement on Wednesday.
Time Warner
Time Warner reported better-than-expected quarterly revenue and profit, helped by higher subscription fees for channels offered by its Turner Broadcasting and Home Box Office businesses.
Shares of the company, which also raised its adjusted profit growth forecast for 2014, rose as much as 4% in early trading.
Revenue from Turner Broadcasting, the operator of channels such as CNN, TBS and TNT, rose 4.6% in the third quarter, mainly due to price increases in the US.
The unit accounted for more than one-third of the company’s total revenue.
Revenue from the Home Box Office unit, which runs the successful crime show “True Detective”, rose 10% and accounted for about 21% of Time Warner’s total revenue. Warner Bros, the company’s movie and TV studio unit, reported a 3% rise in revenue, helped by subscription video-on-demand revenue from its television products.
Growth at the unit, the company’s biggest revenue generator, was partially offset by weaker performance of movies such as “The Conjuring” and “Pacific Rim”. Time Warner raised its percentage growth forecast for full-year adjusted profit to high teens from low teens.
Net income attributable to common shareholders fell to $967mn, or $1.11 per share, in the third quarter ended Sept. 30 from $1.18bn, or $1.26 per share, a year earlier.
