See Search Box
lower down this column for searches of Finfacts news pages. Where there may be
the odd special character missing from an older page, it's a problem that
developed when Interactive Tools upgraded to a new content management system.
Welcome
Finfacts is Ireland's leading business information site and
you are in its business news section.
Markets News Friday: Microsoft undershoots Apple on earnings for first time since 1991; German average water bill €441 in 2010
By Finfacts Team
Apr 29, 2011 - 8:51 AM
Microsoft undershoots Apple on quarterly earnings for first time since
1991: Microsoft on Thursday announced record third-quarter revenue of
$16.43bn for the quarter ended Mar. 31, 2011, a 13% increase over the same
period of the previous year. Net income was $5.23bn.
Last week, Apple reported a profit of $6bn in the
first quarter of this year, up from $3.07bn a year earlier. Revenue surged 83%
to $24.67bn with about half coming from iPhone sales.
It was the first quarter in 20 years when Microsoft reported lower earnings
than Apple and worryingly for the software giant, it said while Windows 7
remains the fastest selling operating system in history with 350m licenses sold,
revenue for the segment was down 4% in the third quarter, in line with the PC
trends, excluding prior year launch impact.
Consumer PC shipments dipped 8% in the quarter, Microsoft chief financial
officer Peter Klein said.
Netbooks, inexpensive laptops, tumbled 40%, partially because of purchases of
tablet computers, he said.
At close of business on Thursday, Apple's market cap was $321bn; Microsoft's
market cap was $224bn.
Germany: The German federal statistics office, Destatis, reported today
that retail turnover in March 2011 in Germany decreased 2.0% in nominal terms
and 3.5% in real terms compared with the corresponding month in the previous
year.
When adjusted for calendar and seasonal variations, the
March turnover was in nominal terms 1.8% and in real terms 2.1% smaller than
that in February 2011.
Compared with the previous year, turnover in retail trade was in the first three
months of 2011 in nominal terms 1.6% and in real terms 0.2% larger.
Destatis also reported that agreed monthly earnings of employees in Germany
showed an average increase by 0.9% between January 2010 and January 2011, which
was below the 2.0% rise of consumer prices. The
cause of the comparably weak development of agreed earnings is the economic
crisis, which still had an impact on the collective agreements of 2010.
In September 2010, the gross monthly earnings of full-time employees in
agriculture amounted to an average €1,851. Earnings in the former territory of the Federal
Republic (€2,049) exceeded those of the new Länder - - East Germany (€1,772) by about
16%.
Destatis said the drinking water and waste water invoice of a model household consuming 80
cubic metres of water per year was €440.99 on a federal average in 2010. The statistics
office also said in advance of the “Water
Berlin International” trade fair to start on 2 May 2011 that this is €1.21
per day. Compared with 2009, the annual costs rose by €8.78 or 2%.
German Economy 'Not an Island': "The economy is not an island, it is going to be impacted by the performance or underperformance of its surrounding customer export target countries and so that's fed through to consumer demand," Moorad Choudhry, head of business treasury at RBS told CNBC after Germany posted lower than expected consumer spending figures:
Economic View: Irish commercial property
values now down 61% from the peak; Goodbody chief
economist, Dermot O’Leary comments - - "Whereas in the
past we would have analysed commercial property trends from the perspective of
possible loan losses in the Irish banks, the purchase by the Irish State, by way
of NAMA, of a large portfolio of property assets, means that that the
performance is important from a sovereign perspective too.
According to the latest update from IPD,
commercial rents and capital values remained in a deflationary trend in the
first quarter of the year. While the declines were smaller than that seen in Q4
2010 (-3.3% and -4.9%, respectively), capital values and rents still fell by
2.3% and 3.4% in Q1. The largest declines for both capital values and rents were
witnessed in the retail sector (-2.7% and -4.9%, respectively), as this sector
continues to struggle due to a weak consumer spending environment (yesterday’s
data show core retail sales volumes fell 3.5% in the first quarter).
However, values and rents also continued to
decline for offices (-2.0% and -3.6%) and industrial (-2.5% and -4.6%).
From the peak in late 2007, the IPD data shows that commercial property prices
have fallen by 61%, with the price of retail premises falling by as much as 65%.
From a competitiveness perspective, the 40% decline in rents from the peak at
the end of 2008 is a positive development (some other rental indices suggest
that the fall in rents has been closer to 50% from the peak).
In the recent stress test carried out by BlackRock for the Irish Central Bank,
it was assumed in a base case that prices would stabilise at 60% below their
peak level after a 2.5% fall this year. In the adverse scenario, a 22% fall in
2011 was assumed to take the peak-to-trough decline to 70%. Given the trends of
the first quarter, the reality is likely to be somewhere between these two
assumptions."
White House on GDP:
European consumer spending hit by higher energy prices in March: Davy
economist, Conall Mac Coille, comments - - "Data released early this morning
(April 29th) indicate that German retail sales fell by 2.1% in March, well below
the 0.2% expansion that the market had hoped for. This leaves the annual growth
of German retail sales 3.5% lower than in the corresponding month of 2010. As in
other countries, higher energy prices have pushed down on real incomes and
squeezed consumer spending. Today's weak German retail sales data follow
yesterday's release of French consumer spending data for March, which indicated
a contraction of 0.7% on the month (below expectations of a 0.2% expansion).
Personal spending figures for March in the US are released later today, and the
market expects a 0.5% rise. Given the weaker-than-expected European retail sales
data, the negative impact from higher energy prices on the US consumer could be
greater than anticipated.
In this context, yesterday's news that Irish retail sales rose by 0.1% on
the month in March is not a bad outcome. Excluding motor trades, retail sales
rose by 0.4% in Q1 over Q4. This suggests that some of the decline in consumer
spending in Q4 reflected the bad weather conditions in December and that Irish
GDP data for Q1 should benefit from a weather-related bounce-back. Of course,
the fiscal adjustment, weak nominal pay growth and poor consumer confidence will
continue to weigh down on Irish consumer spending going forward.
In the UK, markets are closed today for the royal wedding. Following a
very poor week for UK economic data, specifically the poor GDP data and renewed
decline in consumer confidence, there have been suggestions that the royal
wedding could itself provide a stimulus to the UK economy in Q2. The Centre for
Retail Research has predicted that the wedding will boost retail sales by around
£530m, around 2% of monthly retail sales. However, any increase in spending by
foreign visitors will be offset by those UK residents who have chosen to avoid
the wedding celebrations and have taken the extra bank holiday as an opportunity
to take a holiday abroad. Additional spending on wedding memorabilia could be
offset by lower spending on other items. Indeed, UK retail sales volumes fell by
2.0% month-on-month at the time of Prince Charles' wedding to Diana Spencer. So
it is not clear that there will be a large impact on UK consumer spending from
today's wedding.
The largest impact will be the decrease in working hours because of the
extra bank holiday (which reduces working days in the quarter by 1.5%). The
experience of the Queen's golden jubilee celebrations (which also included an
additional bank holiday) suggests that output in April is likely to fall
significantly. The Federation of Small Businesses estimates that the royal
wedding may cost the UK economy £6bn. Tracking the UK economy has been made
harder given the volatility in the data as the impact of the bad weather in
December unwound in Q1. So today's wedding celebrations will add an unwelcome
element of volatility to the Q2 data, which will make assessing the underlying
strength of UK economy all the more difficult over the coming months."
US
Markets
In New York Thursday, the
Dow rose 72 points or 0.57% to 12,763.
The S&P 500 added 0.36%
and the Nasdaq advanced 0.09%.
Asia
Markets
The
MSCI Asia Pacific Index ex-Japan fell 0.7% Friday.
Japan's markets were closed for a holiday; China's Shanghai composite index rosel
0.85%;
Australia's S&P/ASX 200 dipped 1.02% and the Bombay Stock Exchange's Sensex
index dropped 0.31% in Mumbai.
The
BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index
averaged 59% lower in 2009 than a year earlier.
On
Thursday, July 15, 2010, the index fell for the 35th straight session, by 9
points, or 0.537%, to 1,700 points,
Bloomberg report.
On Friday July16th, the BDI rose 20
points or 1.12% to 1,700 to break the 35-session losing streak.
On
Thursday this week, the BDI rose 10 points or 0.79% at 1,269.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
Crude oil for June 2011 delivery is
currently trading on the
Chicago York Mercantile Exchange (CME/Nymex) at $112.24 per barrel, down 44
cents from Thursday's close. In London, Brent for June delivery is trading on
the
International Commodities Exchange at $124.70.
The North Sea benchmark accounts for two-thirds of the global market.
The
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is over $12.
The FT
said in early February that a surge in oil inventories in Cushing, Oklahoma,
where WTI is delivered into America’s pipeline system, has depressed the value
of the benchmark against other yardsticks. The
International Energy Agency said on Thursday that with “few relief valves” to
cut the stock overhang in Cushing, the price dislocation “may persist for months
[or years] to come”.
