ABB redoubles its work to fix power systems unit after shock profit drop
SWISS engineer ABB said it would up work to overhaul its power systems unit after posting an unexpected fall in first-quarter profit because of weak orders and costly delays to wind and solar power projects. Shares in the Zurich-based firm dropped seven per cent after more than a year’s work to turn around its least profitable division failed to yield results. First-quarter net profit fell 18 per cent to $544m (£323.7m), missing the average forecast of $726m.
Sprint trims losses after slashing expenses but subscribers drop off
SPRINT, the No3 US mobile provider, yesterday reported an increase in quarterly revenue in line with analysts’ expectations, due to a new billing plan that lowered wireless expenses. The company, which is 80 per cent owned by Japan’s SoftBank, said it lost 467,000 net subscribers in the quarter. Its quarterly net income loss narrowed to $151m, or 0.04 cents per share, in the first quarter, from $643m, or 21 cents per share, in the year-ago quarter.
Peugeot unveils phase two of fundraising as new board meets
FRENCH carmaker PSA Peugeot Citroen launched the second stage of a long-awaited €3bn (£2.46bn) capital increase yesterday to fund its Back in the Race recovery plan and tie-up with Dongfeng. As its new board met yesterday, the firm surprised markets by issuing more shares than expected at a larger discount to raise €1.95bn from existing shareholders. The issue allows investors to buy seven new shares at €6.77 for every 12 held, a discount of 41 per cent to Monday’s close.
North American comparable sales tumble 21 per cent for Coach
COACH reported a sharp drop in North American sales yesterday as the upscale leather goods maker continued to lose ground to fast-growing rivals in the competitive handbags market. Sales at North American stores open at least a year fell for the fourth quarter in a row, tumbling 21 per cent. The New York company, known for its Poppy handbags, said overall revenue fell 7.4 per cent to $1.1bn in the third quarter, with sales gains overseas, including a 25 per cent jump in China.
Demand for luxury leather goods and fashion boosts sales at Hermes
FRENCH luxury goods maker Hermes posted a forecast-beating 14.7 per cent rise in like-for-like first-quarter sales yesterday, driven by strong demand for its fashion and leather goods. Hermes' first-quarter revenue of €943.5m (£774.8m) was hit by a negative foreign exchange impact of €40m, the company said in a statement. Leather goods generated sales growth of 15.5 per cent on a like-for-like basis, while ready-to-wear and fashion accessories sales rose 19.1 per cent.
LG Electronics says World Cup TV marketing could hit second quarter
SOUTH Korea’s LG Electronics said yesterday increased marketing spending on new products could pull down earnings in its mainstay TV business, making it difficult for second-quarter profit to match the first. An advertising push ahead of the World Cup in June could render second-quarter profit short of the first and closer to the 479bn won (£275.37m) of April-June last year, said finance chief Jung Do-hyun. Operating profit for January-March reached 504bn won.
Bristol-Myers Squibb’s drug sales fall short of Wall Street’s hopes
AMERICAN drugs firm Bristol-Myers Squibb yesterday reported higher-than-expected quarterly earnings, helped by cost cuts and lower taxes, but sales missed Wall Street estimates.
The company earned $937m (£557m) in the first quarter, compared with $609m a year earlier. Bristol-Myers also benefited from the recent sale of its diabetes drugs business to its longtime partner, UK pharma giant AstraZeneca.