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PacificNet Profits Jump Despite Revenue Slump; Jeweler Signet's Results Don't Sparkle; Issues Profit Warning; Sanyo Posts First Profit in Three Years; BMO Financial Drops in Profits To Build Future Momentum
- PacificNet Inc. (PACT) – a leading provider of gaming, e-commerce and customer-relationship-management technologies in China – yesterday (Tuesday) announced un-audited third-quarter revenue of $9.8 million. Total revenue for the first nine months of 2007 was $28.09 million – a 13% decrease from the same time period last year. However, gross profits clocked in at $7.27 million, up 57% from the prior year. Gross profit for the quarter was $2.37 million, a 115% increase from last year's $1.1 million. "With our new focus on the rapidly growing gaming market in greater China, Macau, and Asia, we will continue the pursuit of becoming a leading technology and service provider to the casino operators and gaming industry in Asia, " , president of PacificNet said.
- Signet Group PLC (SIG), the largest specialty jewelry retailer in the world, announced yesterday (Tuesday) that it was likely to miss its annual profit forecasts. The revelation sent shares down to a five-year low. The London-based company said pretax profit was $2.5 million in the third quarter – down from $8 million last year – because of challenging retail conditions in the U.S. market. Signet makes 75% of its sales in the United States, where it trades through Kay Jewelers and Jared. said pretax profits were low as a result of a more challenging retail market in the United States. "Given the backdrop of trading in November and increased economic uncertainty on both sides of the Atlantic, we believe current analysts' expectations are unlikely to be met," Burman said. Shares of Signet closed at $12.40, a 22.26% drop in one day.
- After suffering three years' of net losses, Sanyo Electric Co. Ltd. (SANYF) posted a $149 million (15.98 billion yen) profit for the first six months of 2007. The profits were primarily the result of the sale of a credit affiliate and cost cuts. The company tried several different business plans, as well as a large-scale restructuring – and added in thousands of job cuts. Now, Sanyo seems to be making progress with the assistance and close guidance from Goldman Sachs Group Inc. (GS) and other large investors who funded a large bailout of the company in 2006. Sales dipped 0.4% to $10.17 billion (1.091 trillion yen) this year from 1.095 trillion yen last year. In its mid-term business plan, released with earnings, Sanyo said it would focus on its core battery and solar-energy operations. For now, at least, the company appears to be done restructuring. "We will not exit or sell any more complete businesses, but there will be more refocusing within each business category," said President Seiichiro Sano. He also said that Goldman Sachs had reviewed and approved the plan and made a commitment to keep the shares it owns for at least three more years.
- BMO Financial Group, parent of Bank of Montreal [BMO], said fiscal fourth-quarter profits declined on charges related to weakening capital markets, as well as losses in its commodities business and restructuring programs. Net income for the quarter ended Oct. 31 was $473.6 million, compared with earnings of $698 million in 2006. Deteriorating capital-markets operations – tied to structured-credit positions, Canadian asset-backed commercial paper and two structured investment vehicles – dented the company's balance sheet to the tune of $221.1 million. After-tax losses from its commodities business cost $16.8 million. Chief Executive Bill Downe said in a statement that the bank would continue "to take steps to lower the volatility in our trading businesses as the losses in 2007 were outside our risk tolerance, notwithstanding the difficult market environment." Other areas of the bank's business showed strong performance in the quarter. The company's personal and commercial banking division posted a 7% increase in profits. Canadian operations posted a 4.2% profit on the sale of MasterCard Inc. (MA) shares, a recovery of prior years' income taxes and an adjustment to increase liability for future customer redemptions related to its MasterCard loyalty rewards program. U.S. operations reported a 35% jump in profit. The private-client group saw net income rise 27% on growth in all lines of the business. "By focusing on our customers and delivering on our priorities, we were able to build solid momentum in most of our businesses," Downe said. BMO shares were up 4.12% yesterday (Tuesday), closing at $58.13.