Global Investing Roundup

Isuzu Profits Skid; Telefonica Dials Up Big Profits; Sinotruck IPO Should Haul Away $1.2 Billion; Rexel Finds Breaking Up Easy To Do; Doral Loses $70.5 million For Third Quarter 

• Isuzu Motors Ltd. (ISUZY) of Japan yesterday (Monday) announced it had experienced a 26% drop in third-quarter operating profits, according to Reuters News Agency. The company reported that operating profits were $227 million (25 billion yen). Net profits fell to $142.5 million (15.8 billion yen) while revenue rose 10% to $4.67 billion. Sales in Japan, North America and Thailand were off significantly, but overall foreign sales were up with large gains from oil rich countries in the Middle East, as well as from Russia. The first half of the year was well ahead of Isuzu’s forecast, but management decided to maintain its earlier full-year estimate of $1 billion (100 billion yen) operating profits and $790 million (80 billion yen) in net profits. Isuzu has released a plan to boost overseas sales by 64% over the next three years, and to increase operating profit by 50% over the same time frame.

• Telefonica SA (TEF), the largest telecommunication company in Spain and Latin America, announced that third quarter net profits rose 39% to $2.85 billion (4.02 billion euros), The Associated Press reported. This was well ahead of the average analyst estimate for Telefonica of $2.12 billion (3 billion euros). Of the company’s overall profit number, $992 million (1.4 billion euros) came from the capital gains reaped when the company sold part of its stake in Endemol NV. The rest was the result of continued growth in key European and South American markets. In Spain, the Telefonica Espana division experienced revenue growth of 4.3%, with gains due to high-speed Internet growth offsetting a decline in fixed-line usage. Broadband subscribers in Spain rose to 5.13 million, while cellular customers grew 6.7% to 22.4 million customers. The Latin American division had a revenue increase of 11% in the quarter, with total clients in the region reaching 126.4 million, a gain of almost 15%. The number of worldwide customers also advanced 11% during the quarter, reaching 218.6 million. Telefonica shares fell $1.41 each, or 1.45%, to close at $95.97.

• Sinotruck Ltd. of China announced yesterday (Monday) that it would be raising $1.2 billion in its initial public offering (IPO) on the Honk Kong exchange. The company will be offering 702 million shares. It plans to use the money to expand production capacity. Right now, as much as 75% of China’s cargo is carried over the road and demand for large trucks is rising. Sinotruck, and its parent company – China Heavy Truck Group – are the largest makers of heavy-duty trucks in China with a 20% share of the total market. Truck sales are expected to benefit from both the growth of the world’s fourth-largest economy and a government plan to connect 90% of Chinese cities with new highways by the year 2010. China International Corp. and JPMorgan Chase & Co. (JPM), who are collaborating to underwrite the sale, estimate that as many as 250,000 trucks in China need to be replaced. Chinese companies have raised more than $27 billion on the Hong Kong Exchange so far this year.

• Paris-based Rexel SA announced it is buying Hagemeyer NV for $4.5 billion. This is a 5% increase from its previous offer to buy the Netherlands-based electrical-parts distributor. Rexel plans to split Hagemeyer following the takeover. It will sell the United States and Asian units to rival bidder Sonepar of France. The move is expected to help Rexel diversify away from the United States market, where it derives 47 % of its sales, and where slumping home-construction market has slowed sales. Rexel has already arranged financing for the offer with a consortium of six banks. It doesn’t plan to do an equity offering or to sell shares to finance the acquisition.

• Doral Financial Corp. (DRL), a Puerto Rico-based financial services company, announced yesterday  (Monday) that it suffered a $70.5 million net loss for the third quarter. The loss was primarily caused by costs incurred in restructuring the company and a large loss in the sale of the company’s $1.9 billion portfolio of assets. Doral said the moves better position the company for the fourth quarter. It raised $620 million via a recapitalization and strengthened its balance sheet by reducing the assets for sale. Provisions for loan losses were $5.1 million, compared with provisions of $10.1 million in the third quarter of 2006. The reduction was related to the stabilization of its loan-receivable portfolios after a period of large increases in loan loss allowances during the past nine months. Doral reported total assets of $9.5 billion, a 20% decrease from a year ago, and a reduction caused by the sale of $1.9 billion worth of assets. Doral’s shares fell 60 cents each, or 3.54%, to close at $16.37.