HTTP://WWW.STOPNATO.ORG.UK ---------------------------Business this week
Jan 10th 2002
From The Economist print edition
Compaq Computer, the world's second-largest PC maker, said that surprisingly strong fourth-quarter sales, particularly in Europe, would produce a modest profit rather than the expected loss. The turnaround might even improve the chances of Compaq's proposed merger with Hewlett-Packard.
SAP, Europe's leading software company, said that sales in the fourth quarter had exceeded analysts' expectations, topping euro1 billion ($885m).
America's Justice Department confirmed that it was pursuing a criminal investigation into events surrounding the bankruptcy of Enron, the erstwhile energy-trading giant. The company has close links with the Bush administration.
AOL Time Warner is to write off as much as $60 billion in the first quarter thanks to new rules over accounting for “GOODWILL”. The write-off reflects some of the company's expensive dotcom acquisitions. It also forecast that advertising revenues would decline for at least the first half of the year, confirming the miserable outlook for all media companies.
AT&T is to take a provision of $1 billion in the latest quarter, mainly to pay for 10,000 job cuts. The telecoms giant has already laid off half this number and the rest will go in 2002. Merrill Lynch, an investment bank, also said it would take a charge of $2.2 billion in the quarter, the cost of 9,000 redundancies.
Accenture, the world's biggest management consultancy, reported that profits for its latest quarter were up by 11% over a year ago to $258m and that it had made its highest-ever quarterly revenues. Perhaps, at a tough time for many businesses, Accenture was able to provide valuable advice on downsizing.
EasyJet showed the bullishness of Europe's low-cost airlines with plans to buy 75 new passenger jets worth some $4 billion. In an effort to secure a favourable deal, easyJet signalled that it would consider buying from Airbus Industrie rather than Boeing, the usual supplier to no-frills carriers.
Club Mediterranée, a French resort group, said it would report losses for 2001 of euro70m ($62m); the company blamed the effects of a sagging world economy, compounded by the events of September 11th. Others blamed a weak business plan.
DaimlerChrysler, Mitsubishi and Hyundai unveiled plans to develop and produce an engine to power a range of smaller cars. Significant cost savings are expected as adaptations of the power unit could come to propel more than 1m vehicles.
The Detroit motor show was dominated by gloom over expected job cuts at Ford, the world's second-biggest car maker. The Bush administration also announced a new push to encourage the development of fuel-cell-powered vehicles.
See article:
Fuel cells and cars
Patricia Russo, charged with reviving Eastman Kodak's fortunes in the digital age, left after less than nine months as chief operating officer and president and returned from whence she came, to Lucent Technologies. She will become chief executive of the struggling telecoms-equipment company.
Vizzavi, a European Internet portal that came rather late to the game, said its chief executive and 100 other staff would go. The joint venture between Vodafone and Vivendi Universal cost some euro1.6 billion ($1.4 billion) to set up but has attracted fewer subscribers than hoped for and has had trouble making money.
Investor indifference met Vivendi Universal's stockmarket offer of a 5% stake in the company. Shares fell below the opening price, leaving the two banks underwriting the deal stuck with big holdings.
Alcoa, the world's biggest aluminium firm, launched a bid for the 60% that it does not yet own of Norway's number two aluminium concern, Elkem, valuing the company at some $850m. Elkem described the offer as “very bad”. Norsk Hydro, Norway's leading aluminium maker, agreed to pay euro3.1 billion ($2.8 billion) to Germany's E.ON for its VAW aluminium unit, to make it the world's number three aluminium company.
Yves Saint Laurent said that he would hang up his hat. The ageing haute couture guru expressed disillusionment with today's more commercial fashion industry.
See article: Yves Saint Laurent retires
Stockmarkets around the
world have continued their steady recovery since the post-September 11th lows,
as investors hope for a swift end to America's recession. Both American and
European markets have gained, though Japan is less perky.
See article:
Is irrational exuberance in the air again?
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