Electrolux Loses Steam; Cisco Switches On Profits; High Ratings at MetLife; Greek Bourse Sneaks Into Slovenia; Wheat Futures Hit Record High; India's Growth Slows; D.R. Horton's Dismal First Quarter; Icahn Moves in on Motorola
Europe's largest appliance manufacturer, Electrolux AB (OTC:ELUXY), reported a 22% drop in fourth quarter profits. Chief Executive Officer Hans Straaberg closed 13 of 35 high cost plants and moved operations to lower wage countries such as Poland, but it wasn't enough to remain competitive with cheaper imports from China. The company is currently undertaking a five-year restructuring plan set to end in 2009. If Straaberg cannot improve margins by that time, there will likely be management changes at the 89-year old appliance maker, Bloomberg News reported.
Cisco Systems Inc. (CSCO) reported higher quarterly profits than expected due to orders from the telecom industry. Shares fell 28% from November when Chief Executive John Chambers said that orders from U.S. banking firms were in decline due to the subprime-related crisis, Reuters reported.Profit for the second fiscal quarter ended Jan. 26, was $2.1 billion, or 33 cents per share, compared with $1.9 billion, or 31 cents a share, for the same period a year prior.
MetLife, Inc. (MET) told investors yesterday (Thursday) that less than 1% of its $345 billion home mortgage portfolio had a subprime rating. “We remain comfortable with both the amount and quality of our subprime residential mortgage-backed securities," said Chief Investment Officer Steven Kandarian, on a conference call, Reuters reported.The company further assured shareholders that 97% of the portfolio was rated AAA or AA.
In a microcosm of Nasdaq's takeover of Scandinavia's OMX exchange, Greece's Hellenic Exchanges said that it made a non-binding offer for about 64% of Slovenia's Ljubljana Stock Exchange, Forbes reported. Hellenic Exchanges' Chief Executive Spyros Capralos said that more acquisitions could occur in the future, but also said that he needed consider the risk of becoming an acquisition target as well.
Wheat futures hit a record of $10.63 a bushel on Chicago's exchange – moving up its 30-cent daily limit for the fourth day in a row – on concerns of supply shortages. “There is a genuine physical shortage" of higher-grade wheat, Tobin Gorey, commodity strategist at Commonwealth Bank of Australia Ltd., told Bloomberg. “We're in a phase of the market where people just have to buy it and price has stopped being a real consideration."
India's economy is slowing rapidly for the first time in three years, according to government statistics released yesterday (Thursday). India's growth rate for the year ending March 2008 will be 8.7%, down from 9.6% the previous year, the government's statistics office reported. Citigroup Inc. (C), slashed its 2009 growth forecast for the country as well, paring it down from 9% to 8.3%.
D.R. Horton Inc. (DHI), the nation's largest homebuilder, has reported a $128.8 million loss for the quarter ended Dec. 31. That compares with profit of $109.7 million a year earlier. The company took heavy charges to write off inventory and land values as the housing slump tore through the economy. Revenue plunged to $1.71 billion from $2.8 billion a year ago. The builder closed on 6,549 homes, down sharply from 10,202 in the 2007 period, the Associated Press reported.
Activist investor Carl Icahn took a 5% stake in Motorola Inc (MOT) Wednesday, according to a filing with the SEC. Icahn said he acquired Motorola shares in the belief that they were undervalued, MarketWatch reported. Icahn's affiliates own about 114.4 million Motorola shares, up from about 75.58 million shares, or a 3.3% stake, they held as of Sept. 30, according to the filing.