BUSINESS NEWS
12 Feb 08. Fujitsu is to spin off its loss-making chip business next month, as increasing competition is forcing the Japanese group to create a leaner organisation. Japan’s integrated electronics companies such as Fujitsu, NEC and Hitachi, which make a wide range of goods from chips to nuclear reactors, are finding it increasingly difficult to compete with their nimbler rivals in other parts of Asia and in the US. (Source: FT.com)
11 Feb 08. Smiths Group shares fell sharply in early London trading after the engineering conglomerate reported lower margins in its flagship airport X-ray screening equipment division and a flat performance in medical equipment. A trading statement issued following the end of its first half on February 2 said sales and profit growth had risen in line with management expectations. Good performance in detection and speciality engineering divisions had offset flat performance in medical products. Underlying sales growth in X-ray screening devices such as the aTiX explosive and liquid detection system and the high energy cargo screening system had been strong. However, margins had fallen in the first half because of high start-up costs on new projects and the requirement to hold more inventory to fulfil recent contracts. (Source: FT.com)
06 Feb 08. John Chambers, chief executive of Cisco Systems, sought to reassure investors about the networking company’s long-term prospects even as he warned on Wednesday that the group was bracing itself for slower sales growth following a weaker-than-expected performance in January. The forecast, which followed a November warning from Cisco about softness in orders from big US customers, sent shares in the company down more than 8.4 per cent in after-hours trading. “We are seeing our US and European customers become increasingly cautious,” Mr Chambers said, pointing to stock market turmoil and increased concerns about an economic slowdown. Mr Chambers said that order growth at the company had slipped into the low-teens in January from its usual high-teens growth rate in December.
“January growth rates may continue over the next several months,” Mr Chambers said. “Our best estimate is that this is a relatively short-term challenge.”
However, he cautioned: “We are all seeing the challenges [of] the global stock markets and the US stock market, as well as a steady stream of economic and confidence data. “These events make forecasting next quarter’s business momentum extremely challenging.” Mr Chambers said that Cisco expected sales growth of only 10 per cent in the coming quarter – well below its long term growth goal of between 12 and 17 per cent. His comments came as Cisco met Wall Street expectations for sales and profit in the second quarter, in spite of the weaker-than-expected order growth in January. (Source: FT.com)
07 Feb 08. ROLLS-ROYCE GROUP plc Preliminary Results 2007.
Group Highlights:
• Order book increased by 76 per cent to a record £45.9bn (2006 £26.1bn), with the
Asia and Middle East order book more than doubling to £20bn in 2007.
• Group sales increased to £7,435m (£7,156m). Sales on an underlying basis.
increased by six per cent to £7,817m.
• Services sales increased by nine per cent to £4,265m on an underlying basis.
• Profit before financing was £512m (2006 £693m).
• Underlying profit before taxation* increased 13 per cent to £800m (2006 £705m).
• Net cash inflow, before a special contribution of £500m into the UK pension
schemes, was £562m (2006 £491m).
• Average net cash of £350m (2006 £150m), after reflecting the £500m pension
scheme contribution.
• Shareholder payments for 2007 will in aggregate be 35 per cent higher than in
2006.
• Final payment to shareholders increased by 51 per cent to 8.96p per share (2006
5.92p per share), making a full year total of 13.00p per share (2006 9.59p per
share).
Group Overview
Summary
Rolls-Royce made strong progress in 2007, delivering underlyi