China: an economic miracle
China is an outstanding country. It is the country with the largest population worldwide, it is one of the few countries still practicing communism, and it is the country with the world’s fastest growing economy. Many singularities and superlatives could be added. Especially the economic success of the Asian country is appreciated by many politicians in Europe and the United States of America. Due to its high productivity, China has become one of the most important trading partners for the Western world, and even though the lack of democratic rights and the control of the press and the population in China remain controversial topics internationally, the Western countries cannot do without the Communist one-party state when it comes to economic matters. China's inflation rate from 1994 until 2010 reached an average of 4.25 percent, which means that prices in China are generally rising. With that, the Chinese inflation still exceeds that of the USA, which had an average inflation rate of 3.16 percent in 2011. This inflation rate is one of the results of the booming economy which is the outcome of major changes of the Chinese economic system since the death of Mao Zedong.
Hyundai reported 38% profit increase
The South Korean automaker Hyundai Motors announced an increase of 38% of its profit in the fourth quarter of 2011 when sales of major domestic and foreign markets increased. The net income rose to 2 trillion won (1.77 billion USD) for 1.45 trillion KRW in the fourth quarter 2010 index but remained below expectations of analysts polled by Bloomberg, from 2.24 trillion KRW. The revenues for the fourth annual growth recorded 10.7 percent to 20.5 trillion KRW. For the entire 2011 net profit of Hyundai rose by 35.1 percent to 8.1 trillion KRW, while it was 6 trillion KRW in 2010, where revenue increased from 16.1 percent to 77.8 trillion KRW. The operating profit increased by 36.4% in 2011 to 8.08 trillion KRW.
The sales to foreign markets like USA and China recorded growth after Japanese automakers manufacturing shrank after the disaster in the country since March 2011 The company cited for best performance and the weak KRW. Since 2007, Hyundai remained in fifth place in the world sold cars.
Samsung surprised with strong profit increase
The electronics giant Samsung cemented its position as market leader in smartphones with unexpectedly good financial results. On Friday, the Korean company said its outlook for the fourth quarter, exceeding analysts' expectations in terms of profit, and with regard to sales revenue. The leading driver of profit growth in the amount of 73% over the previous year were a record high sales of mobile phones, as concern has sold 35 million devices. So in this segment significantly ahead of Samsung American rival Apple and remains the largest technology concern in the world with regard to income. Between October and December Samsung expects operating profit of 5.2 billion won (about 3.5 billion), while analysts polled by Reuters had expected 4.7 billion won. This may be the highest profit in the history of the concern. Revenues are expected to be around 31 billion euros and thus also significantly surpassed expectations. In late January, Samsung will present its detailed financial data. The experts had expected really strong performance. In fact, Samsung is struggling with weak market for memory chips, where the company is also a world leader. But customers were convinced of smartphones Koreans. Here, competitors such as HTC, Nokia and Research in Motion has not fared with their latest devices.
HTC reported 26% profit decrease
The Taiwanese smartphone maker HTC reported on the first drop in profit in two years. Between October and December 2011 the company reported a decrease in financial results by 26% to 364 million dollars in a decrease of 2.5% in revenue to 3.35 billion dollars. The negative results were expected and already in November 2011 HTC said it would cut its forecast for earnings of 23% to 3.4 billion dollars. In November Taiwanese reported 20% drop in revenue over the same month of 2010. The reason for the reduced expectations Wall Street Journal named the increasing competition in the smartphone and the uncertain future of the global economy. HTC itself has not commented on the data. It turns out that the adjustment was justified, and the proceeds are slightly less than forecast - 3.35 billion dollars.
"HTC does not have the same brilliance behind the design and marketing from Samsung, but meanwhile, refuses to offer low-end phones that are popular in China," said an analyst at Yuanta Securities Co. However, the company is confident that the situation is not so "serious" and hopes that its new proposals in 2012 will return to consumer confidence. In February, HTC will introduce smartphones and tablets with quad processors and next week is likely to have other interesting devices at CES in Las Vegas.
Canon reported profit increase, but decreased the forecasts for the year
The Japanese technology company Canon Inc. announced that its net profit for the third quarter grew by 14.2% yoy despite the high exchange rate of the yen, thanks to strong sales of office equipment and digital cameras in emerging markets like China and India. The net profit rose to 77.9 billion JPY (726 million EUR) at 68.20 billion JPY (648 million EUR) for the same period of 2010. In operating profit increased from 17.4 percent to 122.5 billion JPY from 104.42 billion JPY the same period last year. Sales annually increase by 0.4% to 916.91 billion JPY. However, the company lowered its forecast for net annual profit to 230 billion JPY in the previous forecast of 260 billion JPY and forecast its annual operating profit to 360 billion yen from 380 billion JPY. The company expects sales to amount to 3.650 trillion JPY in 2011, now estimated 3.780 trillion JPY. The forecast is based on assumptions about rates around 77 JPY for USD and 105 JPY for EUR in the fourth quarter. It should be there given that Canon's results are calculated in U.S. accounting standards.
Toyota reported loss for Q2 2011
The Japanese automotive concern Toyota Motor Corp. registered its first loss in two years because of the disastrous earthquake in Japan in March and a strong yen in the currency markets. The largest automaker in the world reported an operating loss of 108 billion yen (1.4 billion USD) for the second quarter. Twelve months earlier the company reported profit of 211.7 billion yen. Despite the negative financial result Toyota reported a smaller loss than expected. Analysts had expected a loss of at least 190 billion yen. For the full fiscal year to March 2012 the carmaker raised its forecast for the amount of operating profit. In June, the total production of Toyota fell 9.2 percent to 593,839 vehicles. The result is a significant improvement over the decline of 49% recorded in May. The company forecast a return to full production capacity later this year.
The company had too big problems after the Japanese crisis earlier this year, but now the production is recovering and the sales are increasing, so it is expected the company to turn on profit in the next quarter.
Rio Tinto got 30% profit increase due to the strong Asian market
One of the giants in the mining sector - Rio Tinto, announced impressive profit growth for first half of 2011. With a major contribution to the strong results were higher commodity prices and strong demand from Asian economies. The net profit for the first six months of the year amounted to 7.6 billion USD. For the same period last year Rio Tinto profit of 5.8 billion USD. The growth of 30 per cent of profit, however, proved unsatisfactory for market participants and the company's shares have lost about 2 percent today. From Rio Tinto has announced that the program for the repurchase of shares will be increased by 2 billion USD to 7 billion USD. The deadline for operation by the end of March 2012.
"Rio Tinto has achieved yet another record result. Market conditions remained favorable during the past six months due to high demand from Asia", was announced in a statement. The company, however, indicate a risk to the markets of raw materials, mostly related to the debt crisis in Europe and the unclear prospects for the US.
SABIC reported 61% profit increase for the half
The financial crisis and the high crude oil prices reflected to the companies in the oil business and many of them made high profits from the changes on the markets. The Saudi petrochemical giant SABIC announced profit for first half year amounted to 2.16 billion dollars, announced AFP. This is an increase of 61 per cent over the same period of 2010. In a message SABIC, and Saudi Basic Indusries Corp, indicating that the profit of the Group has reached 8.1 billion rials (2.16 billion dollars) in the first half. The company explains its success with increased yield and improved world market prices.
SABIC, which makes fertilizer, methanol and plastics, is the largest public company on the stock exchange in the Gulf and one of the world leaders in the petrochemical sector. Really the good business management and high quality production and contracts made the increase of the company financial report.
Philips reported 1.3 billion EUR loses for the second quarter
Philips reported 1.3 billion (1.8 billion) net loss for the second quarter. Only weeks ago the company warned of declining revenues from two of its main units for lower sales - for the production of medical equipment and consumer electronics. "This is a signal that demand does not recover," said Hans Slobo, an analyst at Rabobank. The CEO of the company Frans van Houten said the company does not expect improvement in the near future. For CNBC, however, van Houten said he sees good prospects in emerging markets. Because of poor performance Philips will begin implementing a program to cut costs by 500 million, which will continue until 2014, and redemption of shares of EUR 2 billion. Frans van Houten depressed and MTOs to Philips. In 2013, he expects 4-6 percent sales growth and 10-12% growth in profit before taxes and depreciation, writes Reuters.
Huawei reported 30% profit increase in 2010
The Chinese company Huawei, which is one of the largest manufacturers of telecommunications equipment worldwide, announced profit growth of 30% for 2010. The main contribution to improvements resulting played strong sales of the company outside the Chinese market. The report of the company shows a profit of 23.76 billion yuan (3.64 billion dollars) after the 2009 positive result was 18.27 billion yuan, or about 30% less. The main profit growth came from increased sales to countries in North America and former Soviet republics. Overall growth in sales abroad amounted to 34%, the total value for 2010 is 120.4 billion yuan. By Huawei indicate that prospects for company performance in the U.S. market remain quite unclear. Among the reasons for this is the refusal of the authorities in the country to enable Huawei to acquire Company 3Leaf Systems.
"Huawei will likely stand out as a company with the fastest rate of sales growth in the sector," said analyst Ren Wenyi of First Capital Securities Reuters. According to him, over the next three to five years, the company will continue to grow, increasing their market share significantly in Europe and the USA. An interesting detail of the data published today is the record of the board of directors of the company, which has so far been kept secret. It shows that the founder is Shanfey Rehn, a former serviceman and who started the business with only about 3200 dollars capital.
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