Record Budget Surplus Expected in Hong Kong; Molson Coors Posts Frothy Fourth-Quarter Profit; Monsanto Reaping Big Rewards; Bill Miller Chimes in on Yahoo Takeover; GM Stuck in Reverse; Valeant Shares Soar on Successful Drug Trial; Another Blackberry Service Disruption
- Analysts from PricewaterhouseCoopers LLP said that Hong Kong may post a record budget surplus of $13.5 billion for its 2007-08 fiscal year, Bloomberg reported. It would mark the second straight year of budget surplus in China’s special administration region and would allow Hong Kong to offer tax cuts. “With the large budget surplus, we believe the government can afford to give out some concessions to help out the less fortunate in society,” PricewaterhouseCoopers analyst Tim Lui said.
- The third-largest U.S. beer maker, Molson Coors Brewing Co. (TAP), posted a frothy 74% gain in net income for the fourth quarter, causing its share price to leap almost 9% during day trading. The company said sales increased 4.5%, with much credit going to flagship Coors Light and Belgian-style Blue Moon brand.
- Monsanto Co. (MON), the world's biggest seed producer, raised its 2008 profit forecast because of demand for weed killer and genetically modified corn and soybeans, Bloomberg reported. Profit in the year ending Aug. 31 will increase to $2.70 to $2.80 a share, above the Jan. 3 estimate of $2.50 to $2.60, St. Louis-based Monsanto said today in a statement.
- Bill Miller, a renowned value investor and asset manager at Legg Mason Inc. (LM), has voiced his support of a deal between Yahoo! Inc. (YHOO) and Microsoft Corp. (MSFT), albeit at a higher price than the one currently offered. “We think MSFT (Microsoft) will need to enhance its offer if it wants to complete a deal,” Miller said in his quarterly letter to investors, which was released yesterday (Tuesday). He estimated that s fair value for Yahoo would be around $40. Microsoft’s current cash-and-stock bid values Yahoo at $28.91 a share. Miller’s Legg Mason Growth Trust (LMGTX) is Yahoo’s second biggest shareholder.
- General Motors Corp. (GM) reported a $38.7 billion loss for 2007 yesterday (Tuesday), the largest annual loss ever for an automotive company. The company also announced another round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help. During a conference call with analysts and media, Chief Financial Officer Fritz Henderson said 2008 will be difficult, but the company sees the potential for significant earnings increases by 2010 or 2011 the Associated Press reported.
- Valeant Pharmaceuticals International (VRX) announced yesterday (Tuesday) that late-stage trials for its experimental epilepsy drug were successful in decreasing the frequency of seizures, CNNMoney.com reported. Valeant stated the drug, retigabine, had "statistically significant results" and plans to apply to the FDA by the end of this year. Shares climbed 13.93% to close at $13.25 the day of the announcement.
- Research in Motion Ltd. (RIMM), makers of the ubiquitous business smartphone line, Blackberry, confirmed a service disruption that lasted for three hours on Monday, leaving many users without access to email or the internet. The recent outage is the second such problem in the last year, as a more serious disruption in April affected 8 million subscribers. The problems have concerned investors who worry that Research in Motion will not be able to keep pace with the demands of its 12 million Blackberry service subscribers.