(Reuters) - The pursuit of German carmaker Opel has narrowed to a three-way race between Italy's Fiat, Canadian-Austrian car parts group Magna and investment firm RHJ International.
In North America, bankrupt U.S. auto parts maker Chrysler won court approval for financing and other requests to help move it quickly through a sale to a group led by Fiat and also named a chairman for the merged company.
Meanwhile, GM Canada planned to tell dealerships on Wednesday which of the country's roughly 700 dealers likely will close under a plan to slash the network by about 42 percent.
The German government had set a Wednesday deadline for bids on the unit of struggling U.S. automaker General Motors Corp, which is hurtling toward a June 1 U.S. government deadline to complete restructuring talks with stakeholders.
Fiat submitted an offer for GM's Opel and British brand Vauxhall, while a financial source told Reuters that RHJ had put in a bid and that Magna also was expected to.
A spokesman for GM Europe confirmed the automaker had received three bids on the Opel unit. GM has said a bankruptcy filing is probable and industry analysts and experts believe it could come within weeks.
Both GM and Germany, where Opel has four plants that employ some 25,000 staff, are in a race against time to finalize a sale of the group based in Ruesselsheim, western Germany.
GM will decide which investor gets Opel, but the German government will also play a big role because it would likely provide billions of euros in financing to help any buyer.
How far Berlin should go to prop up Opel, which traces its roots back to the 19th century, has become a topic of fierce debate ahead of a federal election in September.
Read more here
Wednesday, May 20, 2009
Tuesday, May 19, 2009
World Bank Says China Recovery Hopes May Be Premature
(Bloomberg) -- Enthusiasm about an economic recovery in China may be “premature” as private investment lags behind government spending, the World Bank said.
“Until we see a recovery in private investment, it’s hard to get too excited about the future,” David Dollar, country director for China, said at a forum in Beijing today.
The Shanghai Composite Index has climbed 47 percent this year on optimism that a 4 trillion yuan ($586 billion) stimulus package will revive growth after exports collapsed because of the global recession. The world’s third-biggest economy is “struggling” and may fall short of the government’s target of an 8 percent expansion this year, Oppenheimer & Co. said this week.
Private investment, the main driver of growth, was “way down” in the first quarter, Dollar said, without citing a figure. Manufacturers have excess capacity and “a lot of the real-estate sector is over-built,” he said.
Shanghai’s stock index fell 0.1 percent as of the break in trading at 11:30 a.m. local time.
While China is the only one of the world’s five biggest economies that is still expanding, growth slowed to 6.1 percent in the first quarter, the weakest pace since at least 1999.
Stimulus spending has “stabilized” the Chinese economy, Dollar said, adding that it can’t be the source of long-term sustainable growth and the country needs to do more to increase consumption.
“Until we see a recovery in private investment, it’s hard to get too excited about the future,” David Dollar, country director for China, said at a forum in Beijing today.
The Shanghai Composite Index has climbed 47 percent this year on optimism that a 4 trillion yuan ($586 billion) stimulus package will revive growth after exports collapsed because of the global recession. The world’s third-biggest economy is “struggling” and may fall short of the government’s target of an 8 percent expansion this year, Oppenheimer & Co. said this week.
Private investment, the main driver of growth, was “way down” in the first quarter, Dollar said, without citing a figure. Manufacturers have excess capacity and “a lot of the real-estate sector is over-built,” he said.
Shanghai’s stock index fell 0.1 percent as of the break in trading at 11:30 a.m. local time.
While China is the only one of the world’s five biggest economies that is still expanding, growth slowed to 6.1 percent in the first quarter, the weakest pace since at least 1999.
Stimulus spending has “stabilized” the Chinese economy, Dollar said, adding that it can’t be the source of long-term sustainable growth and the country needs to do more to increase consumption.
Sunday, May 17, 2009
One-time N.Y. Pension Overseer McCall in Cuomo Probe
(Bloomberg) -- Former New York state Comptroller H. Carl McCall, once chief fiduciary of the third-largest public- employee pension fund, said a deal he made three years after leaving office has involved him in a widening investigation of so-called placement agents.
McCall, state comptroller from 1993 to 2002, preceded Alan Hevesi, whose administration is the focus of a probe by New York Attorney General Andrew Cuomo that has produced four criminal charges, two guilty pleas and investigations from New York to California. At issue are the middlemen who secure for investment firms millions of dollars in pension business. Last week, McCall, 63, received a Cuomo subpoena.
Three years after he left office, Manhattan-based Steinberg Asset Management LLC paid him $48,000 for helping it obtain $25 million to invest for the state pension, McCall said in a telephone interview. David Loglisci, Hevesi’s chief investment officer, told him the fund needed a “small-to-mid-cap firm to manage a portfolio.”
“I was in a unique position of having this knowledge that they were looking for such a firm, and I knew a lot about this firm, so I made the referral,” McCall said.
Hevesi resigned Dec. 22, 2006 after pleading guilty to charges he used state-paid drivers as his wife’s chauffeurs. Loglisci now faces Cuomo’s 13-count indictment.
Cuomo’s Charges
Cuomo has charged Henry “Hank” Morris, 55, with orchestrating kickbacks by exploiting work he did to advance Hevesi’s political career; Loglisci, 39, for facilitating and benefiting from the arrangement; former state Liberal Party chairman Raymond Harding, 74, for pocketing illicit payments, and Saul Meyer, 38, a Dallas money manager for Aldus Equity Partners, for paying kickbacks.
Barrett Wissman, 46, a Dallas, Texas hedge fund manager, and Julio Ramirez Jr., 48, a former Blackstone Group LP employee, have pleaded guilty to charges stemming from the probe.
McCall received one of about 100 subpoenas Cuomo earlier this month seeking information about transactions in which individuals acted as “pension placement agents,” linking private equity and hedge firms with public pensions.
The last time McCall and Cuomo were at odds was in 2002, when Cuomo opposed McCall for, and later quit, the race for the Democratic gubernatorial nomination. McCall said he doesn’t resent Cuomo’s subpoena.
Understanding Subpoena
“If I had been the only person subpoenaed then I could question it, but the fact that some 100 people were subpoenaed, I could understand it,” he said in the interview.
“As far as the investigation is concerned, I think it’s a very troubling thing to have emerged, and I commend the attorney general for persisting and trying to get to the bottom of this, because the integrity of the pension fund is very important,” McCall said.
As comptroller, McCall was solely responsible for all state pension investment decisions. Politically influential acquaintances and friends approached him with deals that would benefit them and their clients, McCall said.
“This is what I struggled with in terms of people who made referrals,” he said. “Was somebody simply bringing something to you because they expected you to give them money, because you knew them? Or, were they really making recommendations that added some value? You don’t want to tell them don’t bring anything in, because something might be good.”
Selecting Investments
His office tried to focus on the merits of the deal, not the identity of the placement agent, McCall said. “We looked at it very carefully to determine whether or not this was something that made sense for us as an investment,” he said.
Restrictions on middlemen instituted by the current state Comptroller Thomas DiNapoli and city Comptroller William Thompson in the past month make sense, McCall said, in light of the abuses uncovered by Cuomo’s investigation.
McCall endorsed a code of conduct proposed by Cuomo and agreed to yesterday by the Washington-based Carlyle Group, the second-largest private equity firm. The code would ban investment firms from using placement agents or other third parties to negotiate with public pension funds. It prohibits investment firms from doing business with pension funds for two years if the firm made a campaign contribution to a public official who can influence fund investment decisions.
Read more here
McCall, state comptroller from 1993 to 2002, preceded Alan Hevesi, whose administration is the focus of a probe by New York Attorney General Andrew Cuomo that has produced four criminal charges, two guilty pleas and investigations from New York to California. At issue are the middlemen who secure for investment firms millions of dollars in pension business. Last week, McCall, 63, received a Cuomo subpoena.
Three years after he left office, Manhattan-based Steinberg Asset Management LLC paid him $48,000 for helping it obtain $25 million to invest for the state pension, McCall said in a telephone interview. David Loglisci, Hevesi’s chief investment officer, told him the fund needed a “small-to-mid-cap firm to manage a portfolio.”
“I was in a unique position of having this knowledge that they were looking for such a firm, and I knew a lot about this firm, so I made the referral,” McCall said.
Hevesi resigned Dec. 22, 2006 after pleading guilty to charges he used state-paid drivers as his wife’s chauffeurs. Loglisci now faces Cuomo’s 13-count indictment.
Cuomo’s Charges
Cuomo has charged Henry “Hank” Morris, 55, with orchestrating kickbacks by exploiting work he did to advance Hevesi’s political career; Loglisci, 39, for facilitating and benefiting from the arrangement; former state Liberal Party chairman Raymond Harding, 74, for pocketing illicit payments, and Saul Meyer, 38, a Dallas money manager for Aldus Equity Partners, for paying kickbacks.
Barrett Wissman, 46, a Dallas, Texas hedge fund manager, and Julio Ramirez Jr., 48, a former Blackstone Group LP employee, have pleaded guilty to charges stemming from the probe.
McCall received one of about 100 subpoenas Cuomo earlier this month seeking information about transactions in which individuals acted as “pension placement agents,” linking private equity and hedge firms with public pensions.
The last time McCall and Cuomo were at odds was in 2002, when Cuomo opposed McCall for, and later quit, the race for the Democratic gubernatorial nomination. McCall said he doesn’t resent Cuomo’s subpoena.
Understanding Subpoena
“If I had been the only person subpoenaed then I could question it, but the fact that some 100 people were subpoenaed, I could understand it,” he said in the interview.
“As far as the investigation is concerned, I think it’s a very troubling thing to have emerged, and I commend the attorney general for persisting and trying to get to the bottom of this, because the integrity of the pension fund is very important,” McCall said.
As comptroller, McCall was solely responsible for all state pension investment decisions. Politically influential acquaintances and friends approached him with deals that would benefit them and their clients, McCall said.
“This is what I struggled with in terms of people who made referrals,” he said. “Was somebody simply bringing something to you because they expected you to give them money, because you knew them? Or, were they really making recommendations that added some value? You don’t want to tell them don’t bring anything in, because something might be good.”
Selecting Investments
His office tried to focus on the merits of the deal, not the identity of the placement agent, McCall said. “We looked at it very carefully to determine whether or not this was something that made sense for us as an investment,” he said.
Restrictions on middlemen instituted by the current state Comptroller Thomas DiNapoli and city Comptroller William Thompson in the past month make sense, McCall said, in light of the abuses uncovered by Cuomo’s investigation.
McCall endorsed a code of conduct proposed by Cuomo and agreed to yesterday by the Washington-based Carlyle Group, the second-largest private equity firm. The code would ban investment firms from using placement agents or other third parties to negotiate with public pension funds. It prohibits investment firms from doing business with pension funds for two years if the firm made a campaign contribution to a public official who can influence fund investment decisions.
Read more here
Thursday, May 14, 2009
Rio Tinto Shares Gain After Reaffirming Chinalco Deal
(Bloomberg) -- Rio Tinto Group rose the most in almost four months in Sydney trading after the world’s third- largest mining company said it will proceed with plans to raise $19.5 billion from Aluminum Corp. of China.
Rio climbed 8.2 percent to A$62.31 as of 1 p.m. Sydney time, the biggest gain since Jan. 27. Speculation that Rio would scrap the deal with Chinalco, as the state-owned entity is known, and pursue a rights offer instead pushed the London-based company down 20 percent in the first four days of this week.
“The company remains committed to delivering this strategic partnership,” Rio said today in a statement. Chinalco hasn’t received any request to revise the plan, Chinalco Vice President Lu Youqing said today by phone from Beijing.
Rio is trying to convince investors and regulators that the accord signed in February with Chinalco is the best way to slash the company’s $38.9 billion of debt. Rio may drop the deal in favor of a five billion pound ($7.6 billion) rights issue, the Telegraph newspaper said this week.
Any possible share sale is “potentially a lot further down the track than what the market may have been anticipating here in recent days,” said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. “It just probably eliminates some of the added uncertainty, which had probably aided in a bit of a nervous sell-off in recent days.”
Shares of Aluminum Corp. of China Ltd., Chinalco’s Hong Kong-listed unit, gained 3.1 percent to HK$7.07.
‘Best Way Forward’
The Chinalco deal is “the best way forward” for Rio and Chairman Jan du Plessis is meeting investors in the U.K. this week to listen to their views, spokesman Nick Cobban said yesterday in London. The company has agreed to sell $7.2 billion of convertible bonds and stakes in projects worth $12.3 billion to Chinalco.
The probability of Chinalco completing the investment in Rio is below 50 percent, Liberum Capital Ltd. said last month, citing a rebound in financial and commodity markets.
“With changed market conditions, a rebound in metals prices, rebounding investor sentiment and a strong share price appreciation, it now gives them an opportunity to vary the deal,” said Shaun Giacomo, who helps manage $2.5 billion at SG Asset Management Pte. in Singapore including Rio stock. “Directors do have a fiduciary duty to respond to a changed investment climate.”
Read more here
Rio climbed 8.2 percent to A$62.31 as of 1 p.m. Sydney time, the biggest gain since Jan. 27. Speculation that Rio would scrap the deal with Chinalco, as the state-owned entity is known, and pursue a rights offer instead pushed the London-based company down 20 percent in the first four days of this week.
“The company remains committed to delivering this strategic partnership,” Rio said today in a statement. Chinalco hasn’t received any request to revise the plan, Chinalco Vice President Lu Youqing said today by phone from Beijing.
Rio is trying to convince investors and regulators that the accord signed in February with Chinalco is the best way to slash the company’s $38.9 billion of debt. Rio may drop the deal in favor of a five billion pound ($7.6 billion) rights issue, the Telegraph newspaper said this week.
Any possible share sale is “potentially a lot further down the track than what the market may have been anticipating here in recent days,” said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. “It just probably eliminates some of the added uncertainty, which had probably aided in a bit of a nervous sell-off in recent days.”
Shares of Aluminum Corp. of China Ltd., Chinalco’s Hong Kong-listed unit, gained 3.1 percent to HK$7.07.
‘Best Way Forward’
The Chinalco deal is “the best way forward” for Rio and Chairman Jan du Plessis is meeting investors in the U.K. this week to listen to their views, spokesman Nick Cobban said yesterday in London. The company has agreed to sell $7.2 billion of convertible bonds and stakes in projects worth $12.3 billion to Chinalco.
The probability of Chinalco completing the investment in Rio is below 50 percent, Liberum Capital Ltd. said last month, citing a rebound in financial and commodity markets.
“With changed market conditions, a rebound in metals prices, rebounding investor sentiment and a strong share price appreciation, it now gives them an opportunity to vary the deal,” said Shaun Giacomo, who helps manage $2.5 billion at SG Asset Management Pte. in Singapore including Rio stock. “Directors do have a fiduciary duty to respond to a changed investment climate.”
Read more here
Wednesday, May 13, 2009
Yachts Land at Cannes Festival With Fewer Film Buyers
(Bloomberg) -- The Cannes Film Festival opening today looks less like “The Great Gatsby” and more like “Risky Business” as 4,000 independent movies vie for the attention of a shrinking cast of distributors.
Advance bookings suggest attendance at the world’s largest film festival will be down about 15 percent, complicating moviemakers’ efforts to find distributors. The number of films at Cannes, known for celebrity sightings and yacht parties, is roughly the same as a year ago, organizers say.
The number of films reflects production financing available in previous years. Now, a lack of capital is squeezing everyone from distributors like those looking to buy movies at Cannes to filmmakers including Steven Spielberg, who is trying to raise money for his newly independent DreamWorks studio.
“It’s very tough out there,” said Jerome Paillard, director of the Cannes Marche du Film, the independent film market that runs parallel to the festival. “The credit crunch is really a problem for distributors with no strong cash flow and who rely on credit lines to buy films.”
Time Warner Inc. said last month it had to absorb $120 million in costs because film finance partner Village Roadshow Pictures couldn’t obtain funds. Village Roadshow said this week it restructured a bank credit line, freeing money to cover its share of 2008 productions. In February, Lions Gate Entertainment Corp. said Pride Pictures LLC won’t participate in three films.
Heath Ledger Film
This year’s screenings include the late Heath Ledger’s final film, “The Imaginarium of Doctor Parnassus,” directed by Terry Gilliam, and Ken Loach’s “Looking for Eric,” which stars soccer legend Eric Cantona. Filmmakers Quentin Tarantino, Ang Lee and Pedro Almodovar are showing works.
Movies with early buzz include Jane Campion’s “Bright Star,” about the romance between 19th century poet John Keats and Fanny Brawne, said Michael Schaefer, senior vice president of acquisitions at Summit Entertainment, an independent producer and distributor based in Santa Monica, California.
The festival begins with “Up,” the 3-D feature from Walt Disney Co.’s Pixar, the first animated film to open Cannes.
With less money in the pockets of distributors, producers have lowered their budgets. The cost to make the average movie in the Marche du Film has declined about 20 percent to $5.2 million this year, Paillard said.
The falling costs also reflect the glut of movies now coming to market, said Stephen Margolis, the head of Future Films, a financier and producer based in London.
“Some films will not see the light of day,” Margolis said. “Banks are beginning to leave the sector.”
Film Budgets
Not everyone is coming with less money.
Revolver Entertainment, a London-based distributor, is holding its acquisition budget steady this year, said Managing Director Justin Marciano. The company has released movies including “Tell No One,” the French film featuring Francois Cluzet and Kristin Scott-Thomas, and Charlie Kaufman’s “Synecdoche, New York.”
“There will be some good films that don’t make it and from our buying perspective at the moment, the state of the economy obviously has an impact,” Marciano said. “It’s super tough for producers at the moment and there will be fewer films made.”
The backlog of movies “hurts the marketplace,” said Michael Cerenzie of Cerenzie-Peters Productions, an independent producer in Los Angeles. “We’re still another year away from getting through this saturation.”
Cerenzie’s production credits include “Before the Devil Knows You’re Dead,” starring Philip Seymour Hoffman, and “Den of Lions.”
Read more here
Advance bookings suggest attendance at the world’s largest film festival will be down about 15 percent, complicating moviemakers’ efforts to find distributors. The number of films at Cannes, known for celebrity sightings and yacht parties, is roughly the same as a year ago, organizers say.
The number of films reflects production financing available in previous years. Now, a lack of capital is squeezing everyone from distributors like those looking to buy movies at Cannes to filmmakers including Steven Spielberg, who is trying to raise money for his newly independent DreamWorks studio.
“It’s very tough out there,” said Jerome Paillard, director of the Cannes Marche du Film, the independent film market that runs parallel to the festival. “The credit crunch is really a problem for distributors with no strong cash flow and who rely on credit lines to buy films.”
Time Warner Inc. said last month it had to absorb $120 million in costs because film finance partner Village Roadshow Pictures couldn’t obtain funds. Village Roadshow said this week it restructured a bank credit line, freeing money to cover its share of 2008 productions. In February, Lions Gate Entertainment Corp. said Pride Pictures LLC won’t participate in three films.
Heath Ledger Film
This year’s screenings include the late Heath Ledger’s final film, “The Imaginarium of Doctor Parnassus,” directed by Terry Gilliam, and Ken Loach’s “Looking for Eric,” which stars soccer legend Eric Cantona. Filmmakers Quentin Tarantino, Ang Lee and Pedro Almodovar are showing works.
Movies with early buzz include Jane Campion’s “Bright Star,” about the romance between 19th century poet John Keats and Fanny Brawne, said Michael Schaefer, senior vice president of acquisitions at Summit Entertainment, an independent producer and distributor based in Santa Monica, California.
The festival begins with “Up,” the 3-D feature from Walt Disney Co.’s Pixar, the first animated film to open Cannes.
With less money in the pockets of distributors, producers have lowered their budgets. The cost to make the average movie in the Marche du Film has declined about 20 percent to $5.2 million this year, Paillard said.
The falling costs also reflect the glut of movies now coming to market, said Stephen Margolis, the head of Future Films, a financier and producer based in London.
“Some films will not see the light of day,” Margolis said. “Banks are beginning to leave the sector.”
Film Budgets
Not everyone is coming with less money.
Revolver Entertainment, a London-based distributor, is holding its acquisition budget steady this year, said Managing Director Justin Marciano. The company has released movies including “Tell No One,” the French film featuring Francois Cluzet and Kristin Scott-Thomas, and Charlie Kaufman’s “Synecdoche, New York.”
“There will be some good films that don’t make it and from our buying perspective at the moment, the state of the economy obviously has an impact,” Marciano said. “It’s super tough for producers at the moment and there will be fewer films made.”
The backlog of movies “hurts the marketplace,” said Michael Cerenzie of Cerenzie-Peters Productions, an independent producer in Los Angeles. “We’re still another year away from getting through this saturation.”
Cerenzie’s production credits include “Before the Devil Knows You’re Dead,” starring Philip Seymour Hoffman, and “Den of Lions.”
Read more here
Tuesday, May 12, 2009
U.S. credit rating at risk: former agency chief
(Reuters) - The United States is at risk of losing its triple-A credit rating unless it starts putting its finances in order, a former head of the agency in charge of fiscal accountability said in the Financial Times on Wednesday.
David Walker, former director of the Government Accountability Office, cited a warning from Moody's Investors Service nearly two years ago about ballooning healthcare and social security costs.
"Signs are abound that we are in even worse shape now, and that confidence in America's ability to gain control of its finances is eroding," the former comptroller general and current chief executive of Peter G. Peterson Foundation, wrote to the FT.
Read more here
David Walker, former director of the Government Accountability Office, cited a warning from Moody's Investors Service nearly two years ago about ballooning healthcare and social security costs.
"Signs are abound that we are in even worse shape now, and that confidence in America's ability to gain control of its finances is eroding," the former comptroller general and current chief executive of Peter G. Peterson Foundation, wrote to the FT.
Read more here
Monday, May 11, 2009
Boeing Targets $10 Billion Market for Leased Drones
(Bloomberg) -- Boeing Co., the second-largest U.S. defense contractor, is leasing drones to government agencies and militaries seeking to bypass years-long purchasing processes, a market the company says may grow to $10 billion in a decade.
Boeing won contracts in 2007 and 2008 for a total of $312.7 million to supply the U.S. Navy and Marine Corps with ScanEagle spy drones on a fee-for-service basis and got a $250 million contract from the U.S. Special Operations Command on similar terms last month. Under the deals, Boeing owns the equipment and sends the operators where the military wants them.
Drones including the ScanEagle, the A-160 Hummingbird and the Unmanned Little Bird may be used to perform surveillance and cargo-delivery missions for militaries and civilian agencies worldwide, said Phil Panagos, Boeing’s director of Intelligence, Surveillance and Reconnaissance Services.
“The purpose of our business is to provide platforms and systems to customers who don’t want to purchase” them right away, Panagos said in an interview. The global market for supplying drones and other services on that basis may be worth “$10 billion over the next 10 years,” he said. He declined to give an estimate of what Boeing’s share of that market may be.
Chicago-based Boeing fell $1.11, or 2.4 percent, to $44.72 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 4.8 percent this year.
Pirate Surveillance
The Navy’s contract with Boeing allowed it to deploy a drone from the USS Bainbridge destroyer to help rescue Captain Richard Phillips from pirates off Somalia’s coast on April 13, said Navy Captain J.R. Brown, program manager for Small Tactical Unmanned Air Systems.
The Bainbridge was equipped with ScanEagle and Boeing- supplied operators as part of the ship’s maritime surveillance mission, he said.
The drone used optical and infrared cameras to track the lifeboat holding Phillips, who was captured by pirates that hijacked the Maersk Alabama cargo ship. He was rescued after Navy commandos shot and killed three pirates in the lifeboat.
Boeing’s drones are used only for surveillance and reconnaissance missions, not to shoot at targets. The U.S. Air Force and Central Intelligence Agency own Predator drones made by privately held General Atomics in San Diego. The Predators are equipped with two laser-guided Hellfire missiles and are used to fire at targets in Afghanistan and Iraq.
The ScanEagle is launched from a pneumatic catapult, flies to an altitude of 16,000 feet and can loiter for about 20 hours, according to the Navy. On return, the drone is captured by a rope suspended from a 50-foot high tower.
‘Feet in the Water’
“Some militaries would like the unmanned aerial vehicles for temporary use in peacekeeping operations, and other militaries are still trying to understand their use,” said Philip Finnegan, an analyst at Teal Group Corp., a defense consulting firm in Fairfax, Virginia. “This may allow them to get their feet in the water and understand what it is.”
Boeing’s estimate of a $10 billion global market for leased drones “seems conservative,” with the U.S. military budgeting $3.8 billion to buy drones in its fiscal 2010, Peter Arment, an analyst at Broadpoint AmTech Inc., in Greenwich, Connecticut, said in an interview.
“We know that the military services’ demand for these systems is going to go up exponentially,” he said. He rates Boeing shares “neutral.”
Read more here
Boeing won contracts in 2007 and 2008 for a total of $312.7 million to supply the U.S. Navy and Marine Corps with ScanEagle spy drones on a fee-for-service basis and got a $250 million contract from the U.S. Special Operations Command on similar terms last month. Under the deals, Boeing owns the equipment and sends the operators where the military wants them.
Drones including the ScanEagle, the A-160 Hummingbird and the Unmanned Little Bird may be used to perform surveillance and cargo-delivery missions for militaries and civilian agencies worldwide, said Phil Panagos, Boeing’s director of Intelligence, Surveillance and Reconnaissance Services.
“The purpose of our business is to provide platforms and systems to customers who don’t want to purchase” them right away, Panagos said in an interview. The global market for supplying drones and other services on that basis may be worth “$10 billion over the next 10 years,” he said. He declined to give an estimate of what Boeing’s share of that market may be.
Chicago-based Boeing fell $1.11, or 2.4 percent, to $44.72 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have gained 4.8 percent this year.
Pirate Surveillance
The Navy’s contract with Boeing allowed it to deploy a drone from the USS Bainbridge destroyer to help rescue Captain Richard Phillips from pirates off Somalia’s coast on April 13, said Navy Captain J.R. Brown, program manager for Small Tactical Unmanned Air Systems.
The Bainbridge was equipped with ScanEagle and Boeing- supplied operators as part of the ship’s maritime surveillance mission, he said.
The drone used optical and infrared cameras to track the lifeboat holding Phillips, who was captured by pirates that hijacked the Maersk Alabama cargo ship. He was rescued after Navy commandos shot and killed three pirates in the lifeboat.
Boeing’s drones are used only for surveillance and reconnaissance missions, not to shoot at targets. The U.S. Air Force and Central Intelligence Agency own Predator drones made by privately held General Atomics in San Diego. The Predators are equipped with two laser-guided Hellfire missiles and are used to fire at targets in Afghanistan and Iraq.
The ScanEagle is launched from a pneumatic catapult, flies to an altitude of 16,000 feet and can loiter for about 20 hours, according to the Navy. On return, the drone is captured by a rope suspended from a 50-foot high tower.
‘Feet in the Water’
“Some militaries would like the unmanned aerial vehicles for temporary use in peacekeeping operations, and other militaries are still trying to understand their use,” said Philip Finnegan, an analyst at Teal Group Corp., a defense consulting firm in Fairfax, Virginia. “This may allow them to get their feet in the water and understand what it is.”
Boeing’s estimate of a $10 billion global market for leased drones “seems conservative,” with the U.S. military budgeting $3.8 billion to buy drones in its fiscal 2010, Peter Arment, an analyst at Broadpoint AmTech Inc., in Greenwich, Connecticut, said in an interview.
“We know that the military services’ demand for these systems is going to go up exponentially,” he said. He rates Boeing shares “neutral.”
Read more here
Sunday, May 10, 2009
Australia May Face Debt Crisis From Grants to Young Home Buyers
(Bloomberg) -- Australian Prime Minister Kevin Rudd’s bid to ensure his housing market avoids the global property slump may push a generation of buyers into a debt crisis.
Grants of as much as A$21,000 ($16,142) to first-time buyers and the lowest interest rates in 49 years have emboldened more than 40,000 young Australians to take out home loans since October, stoking demand for properties that cost less than A$500,000.
These buyers may be vulnerable when interest rates begin rising, potentially triggering a jump in foreclosures that will drive down property prices, cut profits at banks and damp household spending, which accounts for half the economy. A surge in defaults in America was a key trigger for the financial crisis that pushed the global economy into its worst recession since World War II.
“We’re mirroring what happened to the U.S. three years ago, when people who shouldn’t have been in the market bought houses,” said Martin North, managing director of Fujitsu Australia, a Sydney-based property-consulting company. “It’s a strategy set for an unfortunate outcome.”
As Australia slides into its first recession since 1991, Rudd’s payments have been criticized by economists and newspapers for fueling a property boom that may burst once the grants are reduced, possibly as soon as July 1.
No Subprime Crisis
While the central bank says Australia doesn’t have a subprime crisis because banks have tightened lending standards, recent reports show first-time buyers are driving a residential construction industry that employs 5 percent of the workforce. New home sales have surged 22 percent this year, and building approvals climbed 12 percent in February and March.
“March was the busiest month I’ve ever had,” said Peita Jackson, a real-estate agent at Bradfield & Prichard, who specializes in selling homes in Sydney’s eastern suburbs. “I sold six properties, and four were to first-time buyers.”
Former Prime Minister John Howard introduced the grants in 2000 to boost a slumping housing market. Last year Rudd tripled the payments for new homes to A$21,000 and doubled handouts for existing houses to A$14,000 to support the economy.
The increases coincided with record interest-rate cuts by Reserve Bank Governor Glenn Stevens, who has reduced the overnight cash rate target by 4.25 percentage points since September to a 49-year low of 3 percent.
Tax-Free Boost
The rate cuts have lowered payments on an average A$250,000 mortgage to A$1,470 from A$2,120. The Reserve Bank says that equals an 8 percent tax-free boost to family incomes. About 90 percent of Australians hold variable-rate loans that are adjusted when the central bank changes its benchmark rate.
“All these things have increased the demand side of property and not the supply side, which always results in increased prices,” said John Lindeman, head of research at property-information company Residex Pty in Sydney.
The 10 suburbs with the biggest prices gains in Sydney during the six months through March were all in locations where homes cost less than the city’s median price of A$564,500, according to Lindeman. The biggest jump was in Greenfield Park, 36 kilometers (22 miles) west of the city center, where the median price rose by A$23,700 to A$420,000.
“We’re setting up a whole generation of people for grief,” Lindeman said. “Interest rates will go up, and that’s when they will feel the pain.”
Prospective Owners
The government grants and interest-rate cuts have prompted first-time buyers, who accounted for a record 27 percent of dwellings financed in February, to borrow more than other prospective home owners. Lending to these consumers surged 6.1 percent between October and February to an average of A$280,600, the Statistics Bureau said. By contrast, home loans to all borrowers fell 1.1 percent to A$253,200.
“For many buyers, the grant was critical,” said Fujitsu’s North. “Over 30 percent had loan-to-valuation ratios on their properties of 95 percent or higher.”
This may eventually leave some new buyers with so-called upside-down loans, as they owe more on their mortgage than the market price of their home. That threat will be heightened if unemployment climbs above 7 percent from the current rate of 5.4 percent, as forecast by the government.
Rudd, Stevens and the International Monetary Fund have all said Australia is in a recession as companies such as BHP Billiton Ltd. and Qantas Airways Ltd. fire workers. Gross domestic product declined 0.5 percent in the quarter ended December 2008 from the previous three months.
Read more here
Grants of as much as A$21,000 ($16,142) to first-time buyers and the lowest interest rates in 49 years have emboldened more than 40,000 young Australians to take out home loans since October, stoking demand for properties that cost less than A$500,000.
These buyers may be vulnerable when interest rates begin rising, potentially triggering a jump in foreclosures that will drive down property prices, cut profits at banks and damp household spending, which accounts for half the economy. A surge in defaults in America was a key trigger for the financial crisis that pushed the global economy into its worst recession since World War II.
“We’re mirroring what happened to the U.S. three years ago, when people who shouldn’t have been in the market bought houses,” said Martin North, managing director of Fujitsu Australia, a Sydney-based property-consulting company. “It’s a strategy set for an unfortunate outcome.”
As Australia slides into its first recession since 1991, Rudd’s payments have been criticized by economists and newspapers for fueling a property boom that may burst once the grants are reduced, possibly as soon as July 1.
No Subprime Crisis
While the central bank says Australia doesn’t have a subprime crisis because banks have tightened lending standards, recent reports show first-time buyers are driving a residential construction industry that employs 5 percent of the workforce. New home sales have surged 22 percent this year, and building approvals climbed 12 percent in February and March.
“March was the busiest month I’ve ever had,” said Peita Jackson, a real-estate agent at Bradfield & Prichard, who specializes in selling homes in Sydney’s eastern suburbs. “I sold six properties, and four were to first-time buyers.”
Former Prime Minister John Howard introduced the grants in 2000 to boost a slumping housing market. Last year Rudd tripled the payments for new homes to A$21,000 and doubled handouts for existing houses to A$14,000 to support the economy.
The increases coincided with record interest-rate cuts by Reserve Bank Governor Glenn Stevens, who has reduced the overnight cash rate target by 4.25 percentage points since September to a 49-year low of 3 percent.
Tax-Free Boost
The rate cuts have lowered payments on an average A$250,000 mortgage to A$1,470 from A$2,120. The Reserve Bank says that equals an 8 percent tax-free boost to family incomes. About 90 percent of Australians hold variable-rate loans that are adjusted when the central bank changes its benchmark rate.
“All these things have increased the demand side of property and not the supply side, which always results in increased prices,” said John Lindeman, head of research at property-information company Residex Pty in Sydney.
The 10 suburbs with the biggest prices gains in Sydney during the six months through March were all in locations where homes cost less than the city’s median price of A$564,500, according to Lindeman. The biggest jump was in Greenfield Park, 36 kilometers (22 miles) west of the city center, where the median price rose by A$23,700 to A$420,000.
“We’re setting up a whole generation of people for grief,” Lindeman said. “Interest rates will go up, and that’s when they will feel the pain.”
Prospective Owners
The government grants and interest-rate cuts have prompted first-time buyers, who accounted for a record 27 percent of dwellings financed in February, to borrow more than other prospective home owners. Lending to these consumers surged 6.1 percent between October and February to an average of A$280,600, the Statistics Bureau said. By contrast, home loans to all borrowers fell 1.1 percent to A$253,200.
“For many buyers, the grant was critical,” said Fujitsu’s North. “Over 30 percent had loan-to-valuation ratios on their properties of 95 percent or higher.”
This may eventually leave some new buyers with so-called upside-down loans, as they owe more on their mortgage than the market price of their home. That threat will be heightened if unemployment climbs above 7 percent from the current rate of 5.4 percent, as forecast by the government.
Rudd, Stevens and the International Monetary Fund have all said Australia is in a recession as companies such as BHP Billiton Ltd. and Qantas Airways Ltd. fire workers. Gross domestic product declined 0.5 percent in the quarter ended December 2008 from the previous three months.
Read more here
Thursday, May 7, 2009
Sallie Mae Plans Life Without Loans Obama Wants Gone
(Bloomberg) -- Sallie Mae, the biggest U.S. provider of college loans, says it doesn’t oppose President Barack Obama’s plan to wipe out much of that business. The company just has a few suggestions.
“What we’ve thought about here is how to make the president’s proposal better,” Jack Remondi, chief financial officer of the company, known formally as SLM Corp., said in an interview.
Obama has proposed saving $94 billion over 10 years by issuing all federal college loans directly instead of using private lenders led by Sallie Mae. The company is pushing a counterproposal that wouldn’t reduce its lending as much. It’s also mounting a public relations effort, pledging to bring jobs home from abroad and deploying lobbyists with Democratic connections.
“They’re not expending political capital to block something that’s going to be very hard to block,” said Charles Gabriel, an industry analyst at Washington-based Capital Alpha Partners. The company is “trying to build a new future.”
The company’s version of Obama’s proposal would let the private lenders continue to market federal student loans. They would sell the loans to the Education Department instead of financing them through capital markets, and collect a fee from the government for each loan purchased.
Sallie Mae’s plan would prevent disruptions in the student- loan system, minimize defaults and give students a continued choice among lenders, Remondi said in the interview.
Pell Grants
Obama and Democratic leaders in Congress say they want to put taxpayer dollars to better use and help more students get a college education. The administration plans to use the money saved by cutting out the private lenders to increase Pell Grants, which help low-income families afford college. Its plan would restrict lenders to less profitable tasks such as processing payments and collecting on defaulted loans.
Reston, Virginia-based Sallie Mae is the biggest of more than 2,000 student-loan providers, followed by Citigroup Inc.’s Student Loan Corp., and Lincoln, Nebraska-based Nelnet Inc. Sallie Mae made $24.2 billion in student loans last year, 74 percent of them federally guaranteed.
Under either Obama’s plan or the company’s version, “Sallie Mae would earn significantly less” on federal student loans than it has in the past, said Martha Holler, a company spokeswoman. Current market conditions make specific estimates difficult, she said.
Shares Plunge
Sallie Mae may lose as much as 40 percent of its revenue if Congress passes Obama’s plan without modifications, said Matt Snowling, an analyst with Friedman Billings Ramsay Group Inc. in Arlington, Virginia. Sallie Mae’s revenue totaled $1.78 billion last year, and most of the rest came from private loans and from services such as collecting on defaulted loans.
The projection of $94 billion in savings over 10 years comes from the nonpartisan Congressional Budget Office. The savings stem partly from the government’s ability to finance loans at lower interest rates than private lenders. The CBO plans to analyze the lender’s counterproposal.
SLM fell 49 cents, or 8 percent, to $5.62 at 4:01 p.m. in New York Stock Exchange composite trading and is down 37 percent this year. The shares tumbled 31 percent on Feb. 26, the day Obama released his budget outline calling for an end to loan subsidies.
Five of 10 analysts surveyed by Bloomberg recommend holding SLM shares, one rates the company a “sell” and four recommend buying.
Read more here
“What we’ve thought about here is how to make the president’s proposal better,” Jack Remondi, chief financial officer of the company, known formally as SLM Corp., said in an interview.
Obama has proposed saving $94 billion over 10 years by issuing all federal college loans directly instead of using private lenders led by Sallie Mae. The company is pushing a counterproposal that wouldn’t reduce its lending as much. It’s also mounting a public relations effort, pledging to bring jobs home from abroad and deploying lobbyists with Democratic connections.
“They’re not expending political capital to block something that’s going to be very hard to block,” said Charles Gabriel, an industry analyst at Washington-based Capital Alpha Partners. The company is “trying to build a new future.”
The company’s version of Obama’s proposal would let the private lenders continue to market federal student loans. They would sell the loans to the Education Department instead of financing them through capital markets, and collect a fee from the government for each loan purchased.
Sallie Mae’s plan would prevent disruptions in the student- loan system, minimize defaults and give students a continued choice among lenders, Remondi said in the interview.
Pell Grants
Obama and Democratic leaders in Congress say they want to put taxpayer dollars to better use and help more students get a college education. The administration plans to use the money saved by cutting out the private lenders to increase Pell Grants, which help low-income families afford college. Its plan would restrict lenders to less profitable tasks such as processing payments and collecting on defaulted loans.
Reston, Virginia-based Sallie Mae is the biggest of more than 2,000 student-loan providers, followed by Citigroup Inc.’s Student Loan Corp., and Lincoln, Nebraska-based Nelnet Inc. Sallie Mae made $24.2 billion in student loans last year, 74 percent of them federally guaranteed.
Under either Obama’s plan or the company’s version, “Sallie Mae would earn significantly less” on federal student loans than it has in the past, said Martha Holler, a company spokeswoman. Current market conditions make specific estimates difficult, she said.
Shares Plunge
Sallie Mae may lose as much as 40 percent of its revenue if Congress passes Obama’s plan without modifications, said Matt Snowling, an analyst with Friedman Billings Ramsay Group Inc. in Arlington, Virginia. Sallie Mae’s revenue totaled $1.78 billion last year, and most of the rest came from private loans and from services such as collecting on defaulted loans.
The projection of $94 billion in savings over 10 years comes from the nonpartisan Congressional Budget Office. The savings stem partly from the government’s ability to finance loans at lower interest rates than private lenders. The CBO plans to analyze the lender’s counterproposal.
SLM fell 49 cents, or 8 percent, to $5.62 at 4:01 p.m. in New York Stock Exchange composite trading and is down 37 percent this year. The shares tumbled 31 percent on Feb. 26, the day Obama released his budget outline calling for an end to loan subsidies.
Five of 10 analysts surveyed by Bloomberg recommend holding SLM shares, one rates the company a “sell” and four recommend buying.
Read more here
Wednesday, May 6, 2009
News Corp profit slides, Murdoch says worst is over
(Reuters) - News Corp posted a 47 percent drop in operating income on Wednesday as advertising revenue declined, but Chairman Rupert Murdoch said the worst effects of the recession are behind the media company.
"It is increasingly clear that the worst is over," he said, echoing executives at other media conglomerates such as Walt Disney Co and Viacom Inc. "There are emerging signs in some of our businesses that the days of precipitous decline are done," Murdoch said.
Profit and revenue slid in News Corp's fiscal third quarter because of lower ad sales at its television stations and newspapers. The company maintained its earlier forecast that operating income would fall 30 percent in fiscal 2009.
While still a decline, the outlook reflects stabilizing ad sales and "other bright spots" in different parts of the business, Murdoch said on a conference call with analysts to discuss News Corp's results.
News Corp reported third-quarter net income of $2.7 billion, or $1.04 a share, compared with $2.7 billion, or 91 cents a share, in last year's quarter. The results included a gain of $1.2 billion for selling an ownership stake in NDS Group Plc and a $1.2 billion non-cash tax benefit.
Operating income fell 47 percent to $755 million.
Revenue fell 15.7 percent to $7.37 billion, short of the average analyst forecast. The recession damaged the company's heavily advertising based-businesses around the world which include Dow Jones and The Wall Street Journal, the Fox TV network, and satellite TV network Sky Italia.
"The notion is that even though they missed, they missed on the divisions that have been generally underperforming anyway," said Miller Tabak analyst David Joyce. "The market's getting more confident that a rebound's starting to form."
Operating income in News Corp's television and newspaper segments fell more than 95 percent in the quarter, while cable network programing rose 30 percent.
To the relief of analysts displeased with Murdoch's portfolio of newspapers, he said he has no plans to buy more. He has been mentioned as a possible suitor for The New York Times Co.
Murdoch also dismissed buying Internet company AOL, which parent Time Warner Inc plans to spin off. "We've never really thought about it, to be honest," he said. "They're always talking ridiculous prices."
MYSPACE
News Corp's "other" segment reported an operating loss of $89 million, due in part to lower ad revenues and higher costs for its MySpace music project.
Online social network MySpace has ceded ground to rival Facebook in terms of worldwide users. In the United States, Facebook has 54.5 million monthly unique visitors, compared with 76 million for MySpace, according to comScore data released in March.
MySpace is profitable, Murdoch said, but he wants to make it "really profitable." He said MySpace and Fox Interactive Media will undergo "major cost savings," but did not say if that would involve layoffs.
Read more here
"It is increasingly clear that the worst is over," he said, echoing executives at other media conglomerates such as Walt Disney Co and Viacom Inc. "There are emerging signs in some of our businesses that the days of precipitous decline are done," Murdoch said.
Profit and revenue slid in News Corp's fiscal third quarter because of lower ad sales at its television stations and newspapers. The company maintained its earlier forecast that operating income would fall 30 percent in fiscal 2009.
While still a decline, the outlook reflects stabilizing ad sales and "other bright spots" in different parts of the business, Murdoch said on a conference call with analysts to discuss News Corp's results.
News Corp reported third-quarter net income of $2.7 billion, or $1.04 a share, compared with $2.7 billion, or 91 cents a share, in last year's quarter. The results included a gain of $1.2 billion for selling an ownership stake in NDS Group Plc and a $1.2 billion non-cash tax benefit.
Operating income fell 47 percent to $755 million.
Revenue fell 15.7 percent to $7.37 billion, short of the average analyst forecast. The recession damaged the company's heavily advertising based-businesses around the world which include Dow Jones and The Wall Street Journal, the Fox TV network, and satellite TV network Sky Italia.
"The notion is that even though they missed, they missed on the divisions that have been generally underperforming anyway," said Miller Tabak analyst David Joyce. "The market's getting more confident that a rebound's starting to form."
Operating income in News Corp's television and newspaper segments fell more than 95 percent in the quarter, while cable network programing rose 30 percent.
To the relief of analysts displeased with Murdoch's portfolio of newspapers, he said he has no plans to buy more. He has been mentioned as a possible suitor for The New York Times Co.
Murdoch also dismissed buying Internet company AOL, which parent Time Warner Inc plans to spin off. "We've never really thought about it, to be honest," he said. "They're always talking ridiculous prices."
MYSPACE
News Corp's "other" segment reported an operating loss of $89 million, due in part to lower ad revenues and higher costs for its MySpace music project.
Online social network MySpace has ceded ground to rival Facebook in terms of worldwide users. In the United States, Facebook has 54.5 million monthly unique visitors, compared with 76 million for MySpace, according to comScore data released in March.
MySpace is profitable, Murdoch said, but he wants to make it "really profitable." He said MySpace and Fox Interactive Media will undergo "major cost savings," but did not say if that would involve layoffs.
Read more here
Tuesday, May 5, 2009
Plan to Sell Chrysler to Fiat Clears Bar
The judge overseeing the bankruptcy of Chrysler on Tuesday took a significant step toward allowing the sale of most of the automaker to Fiat, approving the bidding procedures advocated by the company and backed by the Obama administration.
The decision by the federal bankruptcy judge, Arthur J. Gonzalez, is a setback for a group of Chrysler creditors who have argued that liquidation of the company or some other transaction could yield greater value. These lenders, primarily investment firms, have said that the plan for the Fiat transaction ran afoul of bankruptcy law and would chill efforts by others to produce competing, potentially higher bids.
But Judge Gonzalez disagreed, saying, “The court concludes that the bidding procedures are appropriate and necessary.”
The judge’s decision was a victory for Chrysler and the government, which together argued that a speedy sale was the only way to protect tens of thousands of jobs and help resuscitate the American economy.
“It’s a very big first step,” said Howard Seife, the head of the bankruptcy practice at the law firm Chadbourne & Parke. “It’s clear that the company is moving down the road to a Fiat sale.”
The judge’s decision was the second blow dealt to the holdout lenders during a marathon hearing on Tuesday that began mid-afternoon and ended at 11 p.m.
Judge Gonzalez earlier ordered the disclosure of identities of the Chrysler creditors, who had argued that their identities should be kept secret to protect them from retaliation.
A lawyer representing them claimed that the creditors had been harassed, and some had even received death threats.
Judge Gonzalez gave the creditors until Wednesday morning to reveal their identities, saying that their lawyers had not presented enough evidence of risk. The primary evidence cited by their lawyers was a set of anonymous comments on The Washington Post Web site.
Read more here
The decision by the federal bankruptcy judge, Arthur J. Gonzalez, is a setback for a group of Chrysler creditors who have argued that liquidation of the company or some other transaction could yield greater value. These lenders, primarily investment firms, have said that the plan for the Fiat transaction ran afoul of bankruptcy law and would chill efforts by others to produce competing, potentially higher bids.
But Judge Gonzalez disagreed, saying, “The court concludes that the bidding procedures are appropriate and necessary.”
The judge’s decision was a victory for Chrysler and the government, which together argued that a speedy sale was the only way to protect tens of thousands of jobs and help resuscitate the American economy.
“It’s a very big first step,” said Howard Seife, the head of the bankruptcy practice at the law firm Chadbourne & Parke. “It’s clear that the company is moving down the road to a Fiat sale.”
The judge’s decision was the second blow dealt to the holdout lenders during a marathon hearing on Tuesday that began mid-afternoon and ended at 11 p.m.
Judge Gonzalez earlier ordered the disclosure of identities of the Chrysler creditors, who had argued that their identities should be kept secret to protect them from retaliation.
A lawyer representing them claimed that the creditors had been harassed, and some had even received death threats.
Judge Gonzalez gave the creditors until Wednesday morning to reveal their identities, saying that their lawyers had not presented enough evidence of risk. The primary evidence cited by their lawyers was a set of anonymous comments on The Washington Post Web site.
Read more here
Monday, May 4, 2009
iPhone Outsold By BlackBerry Curve In U.S. Last Quarter
(alleyinsider.com) -- Apple's (AAPL) iPhone was not the most-purchased consumer smartphone in the first quarter, according to research firm NPD Group. That title goes to RIM's (RIMM) BlackBerry Curve 8300 series, which was on sale at more carriers and had the benefit of a buy-one, get-one free sale at Verizon Wireless during the quarter.
Based on U.S. consumer sales of smartphone handsets in NPD's "Smartphone Market Update" report, the first-quarter 2009 ranking of the top-five best- selling smartphones is as follows:
1. RIM BlackBerry Curve (all 83XX models)
2. Apple iPhone 3G (all models)
3. RIM BlackBerry Storm
4. RIM BlackBerry Pearl (all models, except flip)
5. T-Mobile G1
Overall, smartphones made up 23% of U.S. phone sales in Q1, up from 17% during Q1 '08. That's good news for wireless carriers, as smartphone subscribers spend roughly 1.5x as much per month on service per month as people with "dumb" phones.
Read more here
Based on U.S. consumer sales of smartphone handsets in NPD's "Smartphone Market Update" report, the first-quarter 2009 ranking of the top-five best- selling smartphones is as follows:
1. RIM BlackBerry Curve (all 83XX models)
2. Apple iPhone 3G (all models)
3. RIM BlackBerry Storm
4. RIM BlackBerry Pearl (all models, except flip)
5. T-Mobile G1
Overall, smartphones made up 23% of U.S. phone sales in Q1, up from 17% during Q1 '08. That's good news for wireless carriers, as smartphone subscribers spend roughly 1.5x as much per month on service per month as people with "dumb" phones.
Read more here
Sunday, May 3, 2009
3M, Kimberly-Clark Among Few to Make Swine Flu Masks
(Bloomberg) -- 3M Co. and Kimberly-Clark Corp. are among the few manufacturers that make respiratory masks sophisticated enough to ward off swine flu, exacerbating a shortage at retailers.
Only masks rated N95 or above, which can filter at least 95 percent of airborne particles, are effective at blocking the H1N1 virus, according to the U.S. Department of Health and Human Services. N95 respirators require sophisticated manufacturing techniques because they contain a filter often made of carbon, health officials said.
“If you are going to wear a mask, the N95 is the one, but it has to be fitted properly and is difficult to breathe from,” said Georges Benjamin, executive director of the American Public Health Association in Washington, in a telephone interview. Regular face masks are loose-fitting and block only large particles, he said in an April 29 interview.
Swine flu has been found in 11 countries and has killed at least 10 people as of May 1, according to the World Health Organization. The U.S. Centers for Disease Control and Prevention has identified 109 cases in 11 states. No mask or respirator can completely halt the contagion, the Atlanta-based CDC said on its Web site.
Other manufacturers include Markham, Ontario-based Alpha Pro Tech Ltd. and Mine Safety Appliances Co. in Pittsburgh, which delivered truckloads of respirators to workers cleaning up after the Sept. 11 terrorist attacks.
Not Enough Capacity
Cantel Medical Corp.’s Crosstex unit received requests for about 1 million N95 masks this week, about twice what it had available, Andrew Whitehead, a company spokesman, said April 30.
“There just isn’t enough capacity in the industry to supply everyone in the country with an N95,” he said. Little Falls, New Jersey-based Cantel had 2008 sales of $249.4 million.
With few manufacturers and high demand, retailers are running out fast. CVS Caremark Corp. and Walgreen Co., the two largest U.S. drugstore chains, are sold out on their Web sites and at some stores. Wal-Mart Stores Inc. and Home Depot Inc. are out of stock at many locations, and only a few types of the mask are still available through Amazon.com Inc., the world’s largest online retailer.
“Whether we will be able to replenish the supply hasn’t yet been determined,” said Tiffani Washington, a Walgreen spokeswoman, said in an April 30 interview. CVS is working with suppliers to meet increased demand for masks, Michael DeAngelis, a company spokesman, said in an April 30 e-mail.
3M rose 28 cents to $57.88 at 4 p.m. in New York Stock Exchange composite trading. The shares have risen less than 1 percent this year. Kimberly-Clark added 61 cents to $49.75 and has declined 5.7 percent this year.
Read more here
Only masks rated N95 or above, which can filter at least 95 percent of airborne particles, are effective at blocking the H1N1 virus, according to the U.S. Department of Health and Human Services. N95 respirators require sophisticated manufacturing techniques because they contain a filter often made of carbon, health officials said.
“If you are going to wear a mask, the N95 is the one, but it has to be fitted properly and is difficult to breathe from,” said Georges Benjamin, executive director of the American Public Health Association in Washington, in a telephone interview. Regular face masks are loose-fitting and block only large particles, he said in an April 29 interview.
Swine flu has been found in 11 countries and has killed at least 10 people as of May 1, according to the World Health Organization. The U.S. Centers for Disease Control and Prevention has identified 109 cases in 11 states. No mask or respirator can completely halt the contagion, the Atlanta-based CDC said on its Web site.
Other manufacturers include Markham, Ontario-based Alpha Pro Tech Ltd. and Mine Safety Appliances Co. in Pittsburgh, which delivered truckloads of respirators to workers cleaning up after the Sept. 11 terrorist attacks.
Not Enough Capacity
Cantel Medical Corp.’s Crosstex unit received requests for about 1 million N95 masks this week, about twice what it had available, Andrew Whitehead, a company spokesman, said April 30.
“There just isn’t enough capacity in the industry to supply everyone in the country with an N95,” he said. Little Falls, New Jersey-based Cantel had 2008 sales of $249.4 million.
With few manufacturers and high demand, retailers are running out fast. CVS Caremark Corp. and Walgreen Co., the two largest U.S. drugstore chains, are sold out on their Web sites and at some stores. Wal-Mart Stores Inc. and Home Depot Inc. are out of stock at many locations, and only a few types of the mask are still available through Amazon.com Inc., the world’s largest online retailer.
“Whether we will be able to replenish the supply hasn’t yet been determined,” said Tiffani Washington, a Walgreen spokeswoman, said in an April 30 interview. CVS is working with suppliers to meet increased demand for masks, Michael DeAngelis, a company spokesman, said in an April 30 e-mail.
3M rose 28 cents to $57.88 at 4 p.m. in New York Stock Exchange composite trading. The shares have risen less than 1 percent this year. Kimberly-Clark added 61 cents to $49.75 and has declined 5.7 percent this year.
Read more here
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