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Crude Surges as PEMEX Stumbles; Mitsubishi Electric Boosts Outlook; Fushi Finalizes Deal; Oriental Financial Reports Stellar Quarter
From Staff Reports
- Crude-oil futures roared past $93 a barrel for the first time ever yesterday (Monday), closing at a record $93.53 a barrel on the New York Mercantile Exchange. Crude futures for December delivery hit an intraday high of $93.80 a barrel, MarketWatch reported. Crude, which has gained 16% this month, has now risen for four straight days, and yesterday's advance was helped by a surprise announcement from one of the U.S. market's biggest crude-oil suppliers. Mexico's state-owned Petróleos Mexicanos, also known as Mexican Petroleum, or PEMEX, was forced to halt the production of 600,000 barrels of oil per day due to inclement weather. PEMEX is the third-largest producer of crude oil in the world, according to the company's web site. Production is expected to resume within the week. Oil prices have been particularly sensitive recently, driven to new highs by a declining U.S. dollar, political turbulence in oil producing regions, and speculative investing.
- The Mitsubishi Electric Corp. (MIELY) announced better-than-expected semi-annual profits in Tokyo yesterday. Japan's fifth-largest industrial electronics maker experienced a 38% rise in operating profits for the first half of the year, Reuters News Service reported. Strong product sales in the world's emerging regions helped Mitsubishi to rake in $798 million (91.59 billion yen) in net profit, a 62% increase from last year. Despite a list of concerns that included soaring copper and crude oil prices, and a decline in corporate investment caused by the credit crunch, the company raised its annual forecast by 17%. The firm has raised its full-year net profit forecast by 18% to a record $1.29 billion (148 billion yen).
- Fushi International Inc. (FSIN), a leading Chinese manufacturer, has announced the closing of its deal to buy Copperweld Bimetallics PLC. Fushi International is a global manufacturer of bimetallic composite wire products that combine the conductivity and corrosion resistance of copper with the low costs and weight advantages of aluminum. The transaction values Copperweld at $22.5 million. About $8 million of that is debt that Fushi will assume once the deal closes. Fushi funded the acquisition with part of the $39 million in proceeds from its recently announced private placement of newly issued common shares. Fushi cut its profit outlook for this year to a range of 86 cents to 96 cents a share, down from its previous guidance of $1.03 to $1.13, because of the cost of financing this transaction. Analysts expected the company to earn $1.13 this year and $1.55 in 2008. The company's shares fell 23 cents each, or 1.4%, to close at $16.21 each yesterday. Over the past 52 weeks, the shares have traded between $4.75 and $17.34.
- Oriental Financial Group Inc. (OFG), a banking and mortgage lender based in San Juan, Puerto Rico, yesterday reported third-quarter profits of $7.3 million, or 30 cents a share, up from profits of $5.5 million, or 21 cents a share, for the comparable quarter a year ago. Total banking and financial service revenues jumped 3.7% from the preceding quarter to $6.7 million. Non-interest expenses totaled $16.5 million for the third quarter, 5.5% lower than the second. The bank's total assets increased from a value of $5.3 billion as of June 30, to $5.9 billion as of September 30. Key financial performance measurements also showed dramatic improvement with a return on assets of 0.59%, up from 0.2%, and a return on equity that climbed from 1.69% to 11.17%. Interest income increased 23.1% in the quarter, mostly due to higher overall interest yields. The banking company's shares rose 81 cents each, or 7.05%, to close at $12.30. The have ranged between $8.09 and $14.15 over the past 52 weeks.