« May 29, 2005 - June 04, 2005 | Main | June 12, 2005 - June 18, 2005 »
The FT alerts us to a good one. Lenovo, the Chinese computer maker that recently bought IBM’s PC business, reported its quarterly results yesterday.
Profits attributable to shareholders rose 6.4 percent. But the picture looks better, Lenovo says, if you exclude the company’s “investments in globalization.”
Hey, my results would look better if I could exclude my “investments in globalization,” which include, but are not limited to: travel to the Caribbean, the purchase of imported wines and cheeses from Italy and France, plastic toys from China, and a subscription to the FT.
What does Lenovo mean by “investments in globalization”? Buying copies of Tom Friedman’s latest? Sending executives to rub elbows with bigshots at Davos? No, something far more mundane: “the amortization of marketing rights for the Olympic Partners Program.” If Coca-Cola reported its profits this way, it would be putting up some spectacular numbers.
Posted by dan at 05:07 PM
The New York Times, in its post-confirmation feature on Janice Rogers Brown, cites an opinion in which the jurist writes, "private property, already an endangered species in California, is now entirely extinct in San Francisco."
Somebody better tell the 1,342 fools whose properties are listed for sale in San Francisco on Realtor.com
Posted by dan at 04:50 PM
In the middle of today’s updated White House economic forecast appears the following line from Joshua B. Bolten, director of the Office of Management and Budget: "With the President's focus on spending discipline, we are seeing positive signs for the American economy, and for the federal government's balance sheet.”
But of course, you’ll search far and wide for the word “deficit” in this forecast. And the most recent Monthly Treasury Statement, seen here, shows federal spending through the first seven months of this fiscal year is up 7.3 percent from the previous year—more than twice the growth rate of the economy. For the whole fiscal year, Treasury projects federal spending will rise 8.1 percent. And that’s not including the recent $82 billion supplemental spending bill for Iraq that President Bush signed last month.
Meanwhile, the public debt is at $7.782 trillion and rising, up $400 billion so far this fiscal year.
So aside from the stuff about the focus on spending discipline, the positive signs for the nation's balance sheet, Bolten was right on!
Posted by dan at 05:02 PM
Apparently, the editors at Time figured out that real estate is a topic of interest.
Posted by dan at 02:28 PM
For 102 years, Owens-Illinois has been based in Toledo, Ohio, on the shores of Lake Erie. (Don't ask.) But now, writes Peter Marsh in the Financial Times, the company, recently redubbed O-I, is thinking about moving its headquarters across the big lake to London. No, not to London, Ontario. To London, England:
Steve McCracken, chairman and chief executive of O-I, said in an interview with the FT that he was giving "serious thought" to the idea of jettisoning the company's base of 102 years in Toledo on the grounds that a base in Europe would help O-I to become truly global.Such a change would not happen imminently but could take place later this decade. . .
He said London would probably win over other European locations on the grounds of its central placing in respect of global time-zones and the fact that it would be divorced from O-I's detailed business operations - a factor that he reckons would be an advantage. Mr McCracken, who took over the top job at O-I just over a year ago, after nearly 30 years working for US chemical supplier DuPont, said the move would make sense given the importance of Europe to the company. Europe accounts for 40 per cent of O-I's sales. . . .
Mr McCracken made clear he was not ready to propose formally a move to London since he is reshaping the company - which made a loss in 2003 and which he wants to transform into a faster moving business with less emphasis on the US.
Lets see.
London: cosmopolitan city, three hours by train to Paris, skiing in the Alps, summers on the Costa Del Sol.
Toledo: not-so-cosmopolitan city, three hours by train to Cleveland, skiing in the Appalachians, summers on the Costa Del Lake Erie.
You make the call.
Posted by dan at 05:53 PM
Back when Jack Welch ran General Electric, he used to say that it only made sense for the conglomerate to hold onto a company if it could be the #1 or #2 player in its field. The market leaders, after all, can attract the best talent and maintain pricing power. But third and fourth place players may struggle to do both.
As Brian Steinberg notes in today's Wall Street Journal, GE's television network has fallen hard and fast:
General Electric Co.'s NBC, for years the dominant broadcast network in both viewers and advertising revenue, was Friday negotiating "upfront" ad commitments with price cuts of as much as 2%, a person close to the situation said.As of Friday afternoon, the Peacock network was halfway done with upfront sales for the coming TV season. The price cut, in the cost of reaching 1,000 viewers, will likely mean a significant drop in ad commitments for the network. NBC could see a decline of between $500 million to $600 million compared with the $2.9 billion in commitments it secured in last year's upfront, CIBC World Markets' Michael E. Gallant estimated in a research note Thursday.
An NBC spokeswoman declined to comment on the research note.
NBC's weaker upfront performance reflects its slump in the ratings in the just-completed broadcast season. NBC fell to fourth from first in the 18-49 audience demographic, which is keenly sought after by advertisers, after losing long-running hits such as "Frasier" and "Friends."
Posted by dan at 05:43 PM
From today's Wall Street Journal roundup on the continuing struggles of U.S. airlines.
"Operating fundamentals are probably as good as they've ever been" in the U.S., thanks to deep restructuring, "although balance sheets are not," says John Heimlich, chief economist at the International Air Transport Association. "If you didn't have a couple of these exogenous factors" such as fuel prices, he adds, "you'd be in a position to make good profits."
In other words, if only airline companies didn't have to pay interest on their debt, or pay for their main input--gas for airplanes--they might be able to turn a profit!
Posted by dan at 11:52 AM