Samsung Electronics of South Korea
reported today that its quarterly profit jumped 76%, as its Galaxy
smartphones beat rival Apple's iPhone in each quarter of 2012.
However, the company said today it expects
earnings to fall during the current quarter because of seasonally low demand for
It left its 2013 capital expenditure unchanged at
23tn won ($21.5bn).
The company cited the strong won as a challenge and it
said it expects more than 3tn won will be cut from its 2013 operating profit due
to the stronger currency.
Net profit for the final quarter of 2012 was
7.04tn won ($6.6bn), a 76% surge from 4.01tn won a year earlier. Sales were up
19% over a year earlier to 56.06tn won and operating income jumped 89% to 8.84tn
Thursday reported that its profit fell 4% in the holiday second fiscal
quarter as its entertainment and office divisions posted double-digit dips in
The Windows division, which accounts for more
than a quarter of total company revenue, produced a 24% rise to $5.88bn but that
included revenue from the new Windows 8 sales before the product was officially
available last November. Microsoft was required to defer that revenue because of
accounting rules. Without it, Windows sales would have grown only 11%.
The software giant said
its net income for the quarter was $6.38bn, or 76 cents a share, compared to
$6.62bn, or 78 cents a share, in the same period a year earlier. Revenue
rose 3% to $21.46bn from $20.89bn a year ago.
"It's early days and an ambitious endeavor like
this takes time," said Microsoft CFO Peter Klein in a conference call
Thursday, referring to Windows 8.
The results, which sent Microsoft's shares down
2.1% in after-hours trading Thursday to $27.63
"One of the biggest stories in 2013 is the
business transition from Windows XP to Windows 7," said Bob O'Donnell at
market research firm IDC. "There are a staggering number of machines still
running Windows XP. The IT guys have to pull the plug on those and upgrade, and
most will do that by buying new machines."
Justin Doyle, Investec Bank Ireland, said today:
- "Repay day: European banks which availed of
last years ECB €1 trillion LTRO facilities now have the option of repaying
early. In digesting the various conundrums of amounts to be repaid it seems
that the more the Spanish, Italian (nearly 55% of the total facility between
them) and French (16%) banks are seen to pay back, the better it will be for
peripheral bond spreads which should lead to a stronger Euro. Market
consensus is for a repayment of approx. €100bn
- Sticking with Europe and the all important
German IFO survey is due at 9am. If recent German stats are anything to go
by, these should surprise on the upside whilst keeping the bid tone on the
- UK Q4 2012 GDP numbers are out at 9.30am and
it certainly feels like the FX markets are positioning themselves for a
pretty shocking number as sterling has dropped almost 5% in value
against the Euro since the start of the year and over 1.5% in the last two
Conall Mac Coille of Davy said: "European stock indices rose yesterday, with the Euro Stoxx
50 rising 0.5% but the S&P 500 flat on the day. Markets shrugged off the news of
disappointing earnings from Apple Inc, with better-than-expected earnings in
other sectors. Macroeconomic data also supported sentiment. US initial jobless
claims fell to 330,000 in the week to January 19th, surprising predictions for a
rise to 350,000.
The HSBC China manufacturing PMI survey rose to a two-year high in December,
adding to the evidence of a recovery in the global sector. Euro-area PMI surveys
were also better than expected. The composite reading rose to 48.2, still below
the 50 no-change level, but the highest survey reading since early 2012. The
surveys for the German economy were particularly strong, with the services PMI
rising sharply to 55.3, well above the 50 no-change level. That said, the
surveys for France showed renewed declines in January."
Banks: Moody’s indicates the banks need more provisions; Eamonn Hughes
and Colm Foley of Goodbody comment -- "In its 2013 global banking outlook
published yesterday Moody’s indicated that many banks, 'in particular in Spain,
Italy, Ireland and the UK require material amounts of additional provisions to
fully clean up their balance sheets.' It added that 'some banks have in recent
years delayed full recognition of embedded loan losses, partly by restructuring
Our loan loss estimates at the banks envisage
PCAR adverse loan losses over the 2011-13 period. However, we also envisage that
losses in the 2014-16 period remain elevated, equivalent to c.45% of the
preceding 3 year period.
Given the level of private sector debt in the
economy, our forecasts on the banks don’t envisage resumption to “normalised”
credit losses at the banks (60bps in BOI and 70bps in AIB) until 2017. This
means that the credit 'cycle' will actually stretch over an 8 year period from
2010-2017. As such, we believe our forecasts already incorporate some of the
concerns expressed in the Moody’s report."
Economic View: Funding backstop discussion top of the agenda in Troika’s
latest visit; Dermot O'Leary of Goodbody said: "With Troika officials due
back in Ireland next week for the ninth review of the programme, the key items
on the agenda are becoming evident. The Irish Times reports this morning on the
“menu of options” that is being proposed by the Troika for Ireland to achieve a
smooth full return to the bond markets. A funding backstop, or, as it is put in
the article today, “comfort funding”, will be one of the options put on the
table for Ireland. This option has been mooted over recent weeks and is
certainly under discussion in Irish policy circles. Indeed, Finance Minister
Noonan appeared to be warm to the idea, saying in Davos yesterday that 'We don’t
want to go back into the market and fall out of it again.'
Although a precautionary programme appears to be
the most likely option at this stage, it is not the only one. There is still the
possibility of going 'cold turkey' and returning to the markets without any
further official backstop. In our recent Outlook on Ireland, we warned against
this course. Not only would a backstop programme provide an important insurance
policy, it would also ensure that external pressure remained on policy officials
in Ireland to continue with the reform agenda. This reform agenda includes
further reductions in the public sector pay bill, which also looks likely to
form part of the discussions with the Troika next week.
Another key element of exiting the programme will
be the completion of a deal on Ireland’s bank debt. On this front, the
diplomatic efforts continue, with meetings taking place with important
policymakers in Davos this week, including IMF Managing Director Christine
Lagarde. Irish officials will see it as another diplomatic coup that she will
make a visit to Dublin on March 8th. Does that mean we shouldn’t expect any deal
on the pro-notes until after that date?"
In New York Thursday, the
Dow added 46 points or 0.33% to 13,825.
The S&P 500 was flat and
the Nasdaq fell 0.74%.
The MSCI Asia
Pacific Index rose 0.4% Friday while Samsung fell 2.5% limiting the gains.
The Nikkei 225
jumped 2.88% after 3 days of losses; China's
Shanghai composite index fell 0.49%; South Korea's Kospi dropped 0.91%;
Australia's S&P/ASX 200 advanced 0.52%; in Mumbai, the Bombay Stock Exchange's
Sensex 30 dipped 0.90%.
In Europe, the
Dow Jones Stoxx Europe 600 rose 0.13% in morning trading Friday.
In Dublin, the
ISEQ is up 0.16%.
CRH has risen
0.41%; CPL added 1.15%.
Key Index Performance
Bank of Ireland Daily Report
The euro is
trading at $1.3442 and at £0.8526.
For live currency updates, check the
right-hand column of the
Finfacts home page.
The US dollar
fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry
a measure of shipping costs for dry commodities,
hit an all-time High of 11,771 on the 21st of May, 2008.
From that time it reversed and on the 5th of December, 2008 it hit a low of 663
- - close to a 1986 low.
On Thursday, July 15, 2010, the index fell for
the 35th straight session, by 9 points, or 0.537%, to 1,700 points,
this week, the BDI fell 8 points or 0.97% to 817 - - the BDI is
up 16.88% in 2013.
Crude oil for March 2013 delivery is currently
trading on the
Chicago York Mercantile Exchange (CME/Nymex)
at $96.38 up 38 cents from Thursday's close. In London, Brent for February
delivery is trading on the
International Commodities Exchange at
$113.37. The North
Sea benchmark accounts for two-thirds of the global market.
reports that for the
first year since the futures were created, Brent crude is poised to overtake
West Texas Intermediate (WTI) oil as the world’s most-traded commodity.
in Brent jumped 14% to average 567,000 contracts in the year to November 20
compared with all of 2011, while WTI fell 17% to 575,000, according to data from
the ICE Futures Europe exchange in London and New York Mercantile Exchange
compiled by Bloomberg. The number of Brent futures changing hands has exceeded
those for WTI every month from April through October,
the longest streak since at least 1995.
Brent, produced in the
North Sea, is gaining favour among traders because of its role as the benchmark
for energy prices from Saudi Arabia to Russia. Prices have climbed 34% in the
past two years, reflecting everything from war in Libya to the embargo on Iran.
WTI, the main grade in the US, has risen 9% as the nation, which prohibits crude
exports, has struggled to clear a glut at Cushing, Oklahoma, the delivery point
for Nymex futures.
Gold spot price
The spot price
of an oz of gold is trading in New York at $1668.80, up $1.40 from Thursday's
close in New York.
Gold had hit a
record high of $1,921.05 a troy ounce on Sept 06, 2011.
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