New products drive Chrysler back into the black Wednesday, 01 February 2012 23:49

CHICAGO:  A product onslaught drove Chrysler back into the black in 2011 and the ambitious US automaker said yesterday that it aims to multiply its profits by eight times in 2012. Chrysler’s full year net income rose to $183m from a $652m loss in 2010, thanks to fourth quarter earnings of $225m — the best results since Chrysler emerged from a 2009 government-backed bankruptcy under the direction of Italy’s Fiat. It forecast that net income would jump to around $1.5bn in 2012 as revenues rise to $65bn from $55bn in 2011 and $42bn in 2010.

“The house is in good order. We are proud of the work we’ve done,” said Sergio Marchionne, chairman and chief executive of Chrysler and Fiat. “Now we greet a new year of high expectations with our heads down, forging ahead and focused on executing the goals we’ve set for ourselves as a company.”

Chrysler’s results accounted for all of Fiat’s profits this year, but that is not a “long-term solution” to the Italian automaker’s problems, Marchionne said in a conference call. Global vehicle sales rose 22 percent to 1.9 million in 2012, driven by a 43 percent jump in US retail sales that pushed Chrysler’s share of the key US market up 1.3 points to 10.5 percent. Chrysler also reported a 44 percent jump in US sales in January to 101,149, the group’s best January performance since 2008.

Sharp forecasts loss

TOKYO: Japanese electronics maker Sharp said yesterday that it expected a full-year net loss of $3.8bn, blaming falling prices, a high yen and the global economic slowdown. The firm expects to lose 290bn yen for the year to March, reversing an earlier projection of a 6bn yen net profit. For the nine months to December it made a net loss of 213.5bn yen, compared with a 21.83bn yen profit in the corresponding period in the previous year, it said. During the same period, operating losses came to 9.1bn yen, reversing operating profit of 66.5bn yen in the previous year, while sales fell 18.3 percent to 1.9 trillion yen, Sharp said. “Major price falls of products and devices such as LCD colour televisions and solar batteries as well as a dramatic increase of the yen” resulted in the lower revenues, the company said. Sharp booked an extraordinary item of 80.9bn yen for structural reforms and losses related to the suspension of a large LCD plant in Japan after the devastating earthquake and tsunami in March. Sony, Toshiba and Panasonic, among other major makers, have also bled red ink by making televisions, as unit prices have steadily fallen amid tough competition from foreign rivals such as Samsung. Hitachi has decided to stop making televisions on its own later this year and outsource to foreign manufacturers. Japanese firms were also hit hard by sluggish TV demand at home, after record sales last fiscal year due to a temporary subsidy as the country shifted to digital terrestrial broadcasting from an analogue system.

Gazprom profits rise

MOSCOW: Russian gas giant Gazprom announced yesterday a net profit of 940.8bn rubles ($31.05bn) over the first nine months of 2011, a year-on-year growth of 40.7 percent. Sales increased by 32 percent in the same January to September period, to a total of 3.3 trillion rubles. The group expanded sales especially in countries of the former Soviet Union, where it sold 62.5 billion cubic meters of gas, 33 percent more than in 2010, for a total of 458.6bn rubles, a jump of 58 percent due to currency fluctuations. Gazprom sold a total of 371.8 billion cubic meters of gas over the nine months, 7.8 percent more than in the same period last year. The company’s operational costs grew by 23 percent to 2.12bn rubles, and its debt balance increased by 20 percent to 1.04bn due to long-term loans and the ruble’s weakening against the dollar and euro. Gazprom said that it expects a 25 percent growth in profit for the year to “nearly $40bn”, an all-time record.  The company produced a total of 513.2 billion cubic metres of gas in 2011, a slight annual growth from 508.6 billion cubic metres in 2010. It also increased deliveries of gas from its underground storage sites in late 2011 during the winter season, it said in a statement.

AMR in loss

NEW YORK: AMR, the parent of American Airlines that filed for bankruptcy protection in late November, has reported a huge net loss of $904m just in the month of December alone. The loss was reported by AMR in a filing to the bankruptcy court handling its case. The enormous December hole was more than the combined $884m in losses AMR had between January and September of last year. US media reports speculated about potential mass layoffs in the pipeline, ahead of AMR’s scheduled meeting with union representatives. Estimated job cuts range between 10,000 to 15,000 as the company reorganizes in a bid to regain solvency. AMR declined to comment on the reports. The company filed for Chapter 11 bankruptcy protection on November 29. The status allows the Texas-based airline to slash its debt burden and restructure operations with more legal flexibility to renegotiate or cancel service and wage contracts. American Airlines, which serves some 250 cities in over 40 countries, has insisted it would continue normal business operations.

Infineon profits down

Frankfurt: German chip maker Infineon said that bottom-line profits were down in the three months to December on increased customer caution in the current uncertain economic environment.  Infineon, which runs its business year from October to September, said in a statement it booked net profit of 96m euros ($125m) in the three months to December, a decline of 23 percent from the preceding three months. Revenues were down 9 percent quarter-on-quarter at 946m euros.  “The decline occurred due to customer caution as a result of global economic uncertainties,” Infineon explained. Looking ahead to the current quarter, Infineon was similarly cautious. “With continued confidence on the part of automotive customers and some early signs of stabilisation in the chipcard and lower power markets, we expect revenues for the second quarter of the 2012 fiscal year to be flat to down slightly compared to the first quarter,” it said.

LG’s net loss narrows

Seoul:  LG Electronics, the world’s third-largest mobile phone maker, said yesterday that its fourth-quarter net loss narrowed sharply from the previous year due to increased sales of phones and televisions. The net loss was 111.6bn won ($99m) in October-December compared with a loss of 256.4bn won in the same period in 2010. Fourth-quarter sales fell 6.01 percent from a year earlier to 13.8 trillion won, but LG posted an operating profit of 23.1bn won, reversing a loss of 245.7bn  won. This was helped by strong sales of flat-screen TVs during the year-end shopping season in the United States and improved shipments of high-margin smartphones, the South Korean company said. LG’s mobile communications division posted an operating profit of 12bn won in the fourth quarter, a turnaround from a loss of 138.8bn won in the third quarter. For the whole of 2011, LG’s net loss shrank to 433bn won from 1.28 trillion won the previous year. Sales fell three percent to 54.26 trillion but operating profit rose 7 percent to 280bn. Last year, LG battled to turn around its loss-making handset operations, where it lagged Samsung and Apple in high-end smartphones packed with features. Analysts said LG’s 3D, ultra-display features for TVs would help it cement its position as the world’s second-largest TV marker after Samsung, especially when Japanese rivals are struggling with a stronger yen.

Mahindra Satyam up

MUMBAI: India’s software outsourcer Mahindra Satyam yesterday posted a near five-fold jump in its third quarter net profit, beating market forecasts, as margins were boosted by a fall in the rupee. The company, recovering from India’s largest corporate fraud scandal, said its net profit soared to Rs3.08bn ($61m) in the three months ended December, compared to Rs589m a year earlier. Revenue at the company, based in the southern city of Hyderabad, rose 34 percent to Rs17.18bn, from a level earlier. Mahindra Satyam, formerly known as Satyam Computer Systems, showed foreign exchange gains of Rs664m, up from Rs134m a year earlier. Satyam stunned corporate India in 2009 when its founder B. Ramalinga Raju admitted he had for years overstated profits and inflated the balance sheet by more than $1bn. The scandal nearly pushed Satyam into bankruptcy but its new owner Tech Mahindra, part of Indian auto and farm equipment manufacturer Mahindra and Mahindra, has managed to turn around the firm after the revelations.

Agencies

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