Profits rise

Well a couple of the American owned IT giants released financial data yesterday.
Both very encouraging results as well.
First Apple..
http://www.zdnet.com/blog/hardware/appl ... ag=nl.e589

Highlights for their first quarter 2011 year include...

Record revenue of $26.74 billion and record net quarterly profit of $6 billion (compare to revenue of $15.68 billion and net quarterly profit of $3.38 billion in the year-ago quarter).

4.13 million Macs sold, a 23% unit increase over the year-ago quarte

16.24 million iPhones in the quarter, a 86% unit growth over the year-ago quarter.

Infact just about the only blot on the Apple horizon is that CEO Steve Jobs has taken another health reasons break from the job.

Second IBM
http://www.zdnet.com/blog/btl/ibm-deliv ... ag=nl.e589
Their financial reporting was for their last quarter of 2010 - so the year results as well.

For 2010, IBM reported earnings of $14.8 billion, or $11.52 a share on revenue of $99.9 billion, up 4 percent from a year ago. Those results handily topped Wall Street estimates.

Equally important though is that IBM are pretty bullish about what their outlook is for this year.

The only maybe worrying trend in both companies is that a great deal of their growth was driven by overseas markets rather than the American one. There was certainly healthy USA market growth (9%) last year for IBM but the big increases were coming from Russia & China.. For Apple now, 62% of their business is generated abroad.

Report of the Citigroup Jimbo mentioned.

Citigroup profits below expectations

http://www.bbc.co.uk/news/business-12219075

The actual result does not look bad when compared to the last couple of years

Citi made $1.3bn (£811m) in the last three months of 2010, reversing a $7.6bn loss for the period in 2009.
It meant that full-year profits were $10.6bn, compared with losses Citi made in 2008 and 2009.

But the way the figures come together tells rather a different story

The profits were boosted by smaller provisions for bad debts.
However there was a sharp fall in Citi's fixed income revenues, money made from day-to-day trading in things such as bonds and credit derivatives.

On the Apple front I see that their shares actually fell 6% in New York - really on the back of Mr. Jobs health issues. One man does not make a company but Apple fell into the doldrums the last time he gave up the job. All the good things about Apple in the marketplace all happened after he had returned to head it up again. Maybe coincidence, maybe not. Apple will face stiffer competition this year both on the phone & the pad front & the market is obviously worried as to how they can react without him..

Google also posted better than expected results for its 4th. quarter.
http://www.zdnet.com/blog/btl/google-ea ... ag=nl.e589

For the quarter ending December 31, the company reported $2.85 billion, or $8.75 per share, up from $6.79 for the year-ago quarter. Revenue was $6.37 billion, excluding traffic acquisition costs. Those costs, at $2.07 billion, represented 25 percent of advertising revenue. Wall Street had been expecting earnings of $8.09 per share on revenue of $6.05 billion.

With a nice little bonus for all its employees.

Pichette announced across-the-board salary increases of 10 percent for all employees, effective January 1

The real news (as if that was not enough) however were some management changes at the very top.

# Starting April 4, co-founder Larry Page, becomes CEO and takes over day-to-day operations.
# Co-founder Sergey Brin will focus on strategic projects, specifically, new products.
# Eric Schmidt becomes Executive Chairman and will focus externally on “deals, partnerships, customers and broader business relationships, government outreach and technology thought leadership–all of which are increasingly important given Google’s global reach.”

Google were not the only American IT high flyer making changes at the top though. Hewlett-Packard finally made some decisions after the resignation of CEO Mark Hurd last summer. He went because of his relationship with a marketing contractor.
The Board of Directors has 5 new members in what is seen as an attempt to wipe the slate clean after a couple of years when anytime the HP name has been in the news it has been for the wrong reasons. Sadly the Hurd story rumbles on with some shareholders taking HP to court over the size of his severance package...

In a nice turnaround of reports from the banking sector Morgan Stanley saw some good figures for the last 3 months of the year. They were still very much as the market expected. Also as Citigroup & Goldman Sachs had earlier stated the investment bank unit had a poor time with little client activity.

For real growth though China is very much the place to be. GDP grew by 10.3% last year. Not all good news even there as inflation was 3.3% for the year after food prices eased in the last couple of months.
The Chinese Government are taking the inflation rise very seriously & say it is currently their number 1 priority. They point to ways that they have tried to curb the money markets in the last year - increased reserve requirements for banks & interest rate increases. However they blame money flowing into the country from abroad for fuelling the issue. Ma Jianting, the head of the National Bureau of Statistics knows where the issue is & puts it firmly...

that inflation was being fuelled by overly loose monetary policy in developed countries.

You have to think this is Chinas' response to American calls to let their currency freely float on the markets - put your own house in order first & then we will look at it!!

BobHelm wrote:Infact just about the only blot on the Apple horizon is that CEO Steve Jobs has taken another health reasons break from the job.

Apple shares sank after Steve took time off for his health the last time and I note the same is happening again. Down by $15 since Wednesday.

Well Banking still looks like the business not to be in.

Bank of America reports $1.2bn loss

http://www.bbc.co.uk/news/business-12252392

Significant sums were put aside by the bank for bad debts on both the mortgage & credit card business.

For the whole of 2010, writedowns totalled $12.4bn, leaving the bank with a net loss of $2.2bn for the year.

Not in the BBC report I also read this with interest...

When the housing bust and financial crisis hit, lots of these loans and securities turned toxic. Now Fannie, Freddie, mortgage investors and insurers are looking for errors in the underwriting of these loans and asking the banks to repurchase them at the original value. That’s left the banking industry facing billions of dollars in losses.

On Jan. 3, Bank of America unveiled a deal with Fannie and Freddie that resolves a big chunk of this exposure. The bank said it would record a $2 billion charge related to the settlement.

It said it was also setting aside a provision of about $3 billion related to repurchase obligations for residential mortgage loans that were sold by company affiliates to Fannie and Freddie

Pretty obvious why Mr.Murdoch is so keen to take over all of BSkyB

Soaring BSkyB profit puts pressure on Murdoch

http://uk.news.yahoo.com/22/20110127/tt ... 02f96.html

On Thursday it reported first-half adjusted operating profit of 520 million pounds, compared with a Reuters poll forecasting 500 million, and revenue up 15 percent to 3.2 billion pounds, also slightly ahead of forecasts.

The important thing however is where this revenue is coming from.

...is adding new customers at a heady rate and selling them an increasing number of products...

This means it is monthly repeat business with very little effort. As long as you don't turn the customers off completely they are unlikely to change & the money will continue to pour in..

Good to see an American manufacturing company providing some positive figures.

Ford sees best profit in 11 years

http://www.bbc.co.uk/news/business-12306344

The figures were not as good as the market expected, but it did include

The 2010 results included $853m in charges for reducing the company's debt.

Ford also wrote off $339m charge for discontinuing the Mercury brand.

The first charge should allow it to be even more profitable in the future & the second is (hopefully) a not to be repeated mistake.
Even better news was this

The company said it had made money in every region including Europe, where last year it lost money.

which suggests that it is a brand going well everywhere in the world.
Probably the most important thing about the figures though is that they were achieved on the back of growing sales figures, rather than inventory or staff reductions.

Sales volumes climbed by 20% as the US carmaker

It seems that the advertising business is picking up in the USA...

News Corp profit boosted by TV income

http://www.bbc.co.uk/news/business-12351256
I will readily admit that Mr. Murdoch would never make it onto my top 100 list of 'Businessmen to be admired', but even I have to begrudgingly admit these are good figures..

Rupert Murdoch's News Corporation said income at its television businesses had helped its profits jump 150% in the last three months of 2010.

The company made $642m (£385m) in the period from $254m a year earlier, on sales up about 1% to $8.76bn.

Time Warner had earlier announced good final quarter figures as well..

Time Warner profits boosted by advert sales

http://www.bbc.co.uk/news/business-12348924

A jump in television advertising sales helped Time Warner to a better-than-expected 21% jump in profits in the last three months of 2010.

The US media firm made $769m (£474.3m) in the period.