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6 October 2010
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Drug Makers Reap Benefits of Tax Break NYT
May 8, 2005
a profit warning from
drop in profits
a 29 per cent slump in full-year
Delivers on Revenue
but Not on Profit
The New York Times
By DAVID STREITFELD
FRANCISCO — Leaping revenue, little profit.
That is the long-established Amazon story, and those who expected to hear it
again Thursday were not disappointed.
The company reported sales of $12.8 billion, up 29 percent, in the second
quarter while it eked out net income of $7 million, or a penny a share.
Those results essentially matched expectations. Analysts had estimated the
Seattle-based retailer would earn 2 cents a share, down from 41 cents a share in
the second quarter of 2011.
In what is becoming a routine warning, Amazon said that profit in the current
quarter would remain elusive. Revenue might grow as much as 31 percent, the
company said, but it was expecting a loss. Losses at Amazon were routine in its
early years but in recent years it has made a profit, albeit a small one.
This would be devastating news from some Internet companies. But Amazon bulls
were unfazed, saying the retailer was investing, as always, in the future.
“If they keep this up, there’s a good possibility that you’re looking at
shopping malls going the way of the record store and the bookstore and the video
rental store,” said Jason Moser, who covers Amazon for the Motley Fool
Amazon shares Thursday were up $3 to $220 during regular trading. The stock is
trading only about 10 percent below its record high, with a stratospheric
price-to-earnings ratio of about 170. In after-hours trading, shares continued
Since its founding in 1994, Amazon has been focused on broadening its product
and customer bases, not pumping up its profit margins. And the growth has been
tremendous — it is now one of the country’s largest retailers. Even in North
America, its most established market, it has been growing consistently more than
twice as fast as the e-commerce market as a whole, a Forrester Research report
released Thursday noted.
Amazon is building 18 new fulfillment centers around the world this year. In the
United States, many of them are close to major cities, including New York City,
San Francisco and Los Angeles. In a conference call with analysts, Thomas J.
Szkutak, Amazon’s chief financial officer, said, “We’re investing certainly for
the long term.”
In the past, Amazon declined to build warehouses in states where it had many
customers, because it would then have to collect sales taxes from them. Now the
promise of offering these areas even faster delivery seems to be more of an
imperative than continuing to fight the tax issue.
Amazon fans probably dream of ordering books or bagels and getting them the same
day. But Mr. Szkutak indicated this would remain a dream. “We don’t really see a
way to do same-day delivery on a broad scale economically,” he cautioned.
Six of the new warehouses are already open. Getting some of the others ready for
the all-important holiday season helps explain the predicted absence of profit
in the third quarter. The centers are a large factor in Amazon’s accelerating
head count, which is up 60 percent over the last year to 60,000 employees.
One word that was little mentioned during the call by either Mr. Szkutak or the
analysts: Kindle. Amazon’s tablet, the Kindle Fire, was introduced last fall in
an ocean of hype. New models are seen by some as overdue.
“We’re excited about the road map we have” for e-readers and e-books, Mr.
Szkutak said. He declined to say what that map was.
Amazon Delivers on Revenue but Not on Profit,
HSBC profits double to almost £12bn
• Unnamed highest-paid banker
earned over £8.4m in 2010
• Chief executive Stuart Gulliver earned £6.1m
Monday 28 February 2011
This article was published on guardian.co.uk
at 10.49 GMT
on Monday 28 February
It was last modified at 15.40 GMT
on Monday 28 February 2011.
It was first published at 09.28 GMT
on Monday 28 February 2011.
HSBC revealed that its highest-paid banker took home more than
£8.4m last year as it reported that profits more than doubled to $19bn (£11.8bn)
The UK's largest bank also admitted that more than 253 of its staff were paid
more than £1m last year and that some 89 of these were based in the London.
The bank said 280 of its most senior employees had shared in bonuses of $374m.
Some 186 of these were in the UK and their share of the bonuses was $172m. This
means key bankers in the UK get paid an average bonus of $920,000 verses $1.3m
group-wide, although this is partly because the UK numbers include lower-paid
staff involved in monitoring the bank's risks.
Information provided by the bank showed that if their salaries are included,
those key staff earned a total of $471m, which averages at $1.7m – just over
Stuart Gulliver, who took over as chief executive at the start of the year, is
to take his £5.2m bonus in shares. His total pay was £6.1m, down on the £10m he
received a year ago when he was the highest-paid employee of the bank.
While the chief executive's office is Hong Kong, Gulliver joked that he lives on
Cathay Pacific and British Airways, spending a third of his time in the UK, a
third in Hong Kong and a third in the air.
For 2010, the highest-paid banker – who is not named – received between £8.4m
and £8.5m; one took £6.8m and three received between £6.3m and £6.4m.
HSBC provides more information about pay than other financial institutions
because it is listed in Hong Kong, which demands disclosure of the five
highest-paid staff. In banking, the biggest earners are often outside the
Under Project Merlin, the deal between major banks and the UK government, the
disclosure is different and only requires the pay of the five highest-paid
executives outside the boardroom – rather than all bankers and traders – to be
disclosed. Under this measure the highest-paid executive received £4.2m.
The information about the bonus pool for senior staff is being provided to
comply with a new Financial Services Authority rule, which requires so-called
"code staff" – those deemed to be high paid and taking big risks – to have their
pay published in aggregate.
Gulliver replaced Michael Geoghegan as chief executive after a very public
boardroom reshuffle. For 2010 Geoghegan received £5.8m after his £2m salary and
benefits were topped by a £3.8m bonus. He is also to receive £1m for 2011 and a
pension contribution of £401,250 under the terms of his contract. While he
stepped down at the end of December, he will receive £200,000 in consultancy
fees to 1 April, which he will donate to charity.
The bank cut its long-term return on equity target to 12%-15% from a previous
15%-19% target, blaming the costs caused by regulations requiring banks to hold
more capital and extra liquid instruments that can be sold quickly in a crisis.
The shares fell 4% to 682p as the market digested numbers which, Gulliver
admitted, showed income was flat, costs were up and that profits had been
bolstered by the $12.4bn fall in impairments to $14bn – the lowest level since
The new finance director, Iain Mackay, said: "We've targeted 12% to 15% through
the cycle for return on equity, principally taking into consideration what we
view as a somewhat unstable and uneven economic recovery over the coming years
as well as much higher capital requirements."
Commenting on the profits, which were below the $20bn estimated by analysts,
Gulliver said: "Underlying financial performance continued to improve in 2010
and shareholders continued to benefit from HSBC's universal banking model.
"All regions and customer groups were profitable, as personal financial services
and North America returned to profit. Commercial banking made an increased
contribution to underlying earnings and global banking and markets also remained
strongly profitable, albeit behind 2009's record performance, reflecting a
well-balanced and diversified business."
HSBC's new chairman, Douglas Flint – who was the finance director until he
replaced Stephen Green in December – said the group would not forget the
financial crisis and support from governments around the world, adding the group
entered 2011 "with humility". Green's departure to join the government as trade
minister caused the bank to reorganise its top team last year.
But Flint hit out against George Osborne's permanent levy on bank balance
sheets, saying that if the chancellor removed the levy – which will cost HSBC
about $600m – the bank would increase its payouts to shareholders. The final
dividend was announced at 12 cents, up from 10 cents at the same point last
Flint was also concerned about the new rules that force banks to hold more
liquid instruments such as government bonds. "It will be a near impossibility
for the industry to expand business lending at the same time as increasing the
amount of deposits deployed in government bonds while, for many banks but not
HSBC, reducing dependency on central bank liquidity support arrangements," he
"It is to be hoped that the observation period, which starts this year and
precedes the formal introduction of the new requirements, will inform a
recalibration of these minimum liquidity standards."
For 2009 the bank reported a 24% fall in pre-tax profit to $7bn (£4.63bn), which
included a total bill for salaries and bonuses of $18.5bn, down 11%.
HSBC profits double
to almost £12bn, G, 28.2.2011,
Were the Highest
on Record Last Quarter
The New York Times
By CATHERINE RAMPELL
nation’s workers may be struggling, but American companies just had their best
American businesses earned profits at an annual rate of $1.66 trillion in the
third quarter, according to a Commerce Department report released Tuesday. That
is the highest figure recorded since the government began keeping track over 60
years ago, at least in nominal or non-inflation-adjusted terms.
Corporate profits have been going gangbusters for a while. Since their cyclical
low in the fourth quarter of 2008, profits have grown for seven consecutive
quarters, at some of the fastest rates in history.
This breakneck pace can be partly attributed to strong productivity growth —
which means companies have been able to make more with less — as well as the
fact that some of the profits of American companies come from abroad. Economic
conditions in the United States may still be sluggish, but many emerging markets
like India and China are expanding rapidly.
Tuesday’s Commerce Department report also showed that the nation’s output grew
at a slightly faster pace than originally estimated last quarter. Its growth
rate, of 2.5 percent a year in inflation-adjusted terms, is higher than the
initial estimate of 2 percent. The economy grew at 1.7 percent annual rate in
the second quarter.
Still, most economists say the current growth rate is far too slow to recover
the considerable ground lost during the recession.
“The economy is not growing fast enough to reduce significantly the unemployment
rate or to prevent a slide into deflation,” Paul Dales, a United States
economist for Capital Economics, wrote in a note to clients. “This is unlikely
to change in 2011 or 2012.”
The increase in output in the third quarter was driven primarily by stronger
consumer spending. Wages and salaries also rose in the third quarter, which
might help bolster holiday spending in the final months of 2010.
Private inventory investment, nonresidential fixed investment, exports and
federal government also contributed to higher output. These sources of growth
were partially offset by a rise in imports, which are subtracted from the total
output numbers the government calculates, and a decline in housing and other
residential fixed investments.
Corporate Profits Were the Highest on Record Last Quarter,
Profit Dropped 66% in Quarter
at Exxon Mobil
July 31, 2009
The New York Times
By JAD MOUAWAD
Exxon Mobil, the world’s biggest publicly traded oil company,
said Thursday that its profit dropped 66 percent in a second quarter after a
sharp fall in oil prices in the last year.
The oil giant reported that its net income fell to $3.95 billion, or 81 cents a
share, from $11.68 billion, or $2.22 a share, in the period a year ago.
Capital spending fell 6 percent to $6.56 billion in the quarter.
“Global economic conditions continue to impact the energy industry both in the
volatility of commodity prices and reduced demand for products,” the company’s
chairman and chief executive, Rex W. Tillerson, said in a statement.
The company’s combined oil and gas production fell 3 percent in the quarter,
because of restrictions imposed by OPEC producers and lower output from mature
fields. Exxon’s oil production in the quarter averaged 2.35 million barrels a
day and gas production was about 8.01 billion cubic feet a day. The company said
it increased its output from new projects in Qatar and in the United States.
Profit at the company’s production and exploration unit fell to $3.81 billion in
the second quarter, down $6.2 billion compared with a year earlier. In its
refining business, Exxon saw its profit drop to $512 million, down $1.05 billion
from a year ago. That included a loss of $15 million at Exxon’s domestic
Despite the lower profit, Exxon continued its program to reward shareholders by
buying back shares and paying dividends. The company spent $5.2 billion in the
second quarter to buy back 75 million shares.
Exxon’s report caps a week of lower earnings across the energy industry after
oil prices tumbled from last year’s record levels and the global economy slowed
down. Oil prices, which had reached a record closing price of $145.29 a barrel
last July, recently traded around $63 a barrel.
The global recession is expected to reduce oil consumption around the world for
a second consecutive year, the first time that’s happened since the early 1980s.
Oil companies, which are struggling to adapt to a new environment of lower
prices and slower demand, have responded by slashing costs, paring down drilling
activities and shutting some operations.
Earlier on Thursday, Royal Dutch Shell reported that its net profit fell 67
percent in the second quarter, to $3.82 billion, from $11.6 billion in the
period a year ago. Sales were $63.9 billion, down from $131.4 billion in the
quarter a year ago. The company said that it planned to reduce capital spending
by more than 10 percent next year to about $28 billion and that it would cut
Earnings at Shell’s exploration and production unit dropped 77 percent, to $1.33
billion, from $5,9 billion a year ago, mostly on lower oil prices. Production
declined 6 percent, to 2.9 million barrels of oil and equivalents a day, while
prices were $52.62 a barrel, down from $111.92 in the period a year ago.
“Our second quarter results were affected by the weak global economy. Shell’s
chief executive, Peter R. Voser, said. “This weakness is creating a difficult
environment both in upstream and downstream.”
On Wednesday, ConocoPhillips, the third-largest American oil company after Exxon
and Chevron, said that its quarterly profits tumbled 76 percent, to $1.3
billion, after a loss in its refining business. Chevron reports its earnings on
The British oil giant BP said earlier this week that its profit declined 53
percent, to $4.39 billion. The company said it would reduce its costs by $3
billion this year, $1 billion more than it had initially planned. The company’s
chief executive, Tony Hayward, also signaled that he expected oil prices hover
in a range of $60 to $90 a barrel.
Julia Werdigier contributed reporting.
Profit Dropped 66% in
Quarter at Exxon Mobil, NYT, 31.7.2009,
Falls for First Time in 23 Years
April 24, 2009
The New York Times
By ASHLEE VANCE
Fresh off one of the worst quarters in company history, Microsoft offered
investors little evidence that a beleaguered personal computer market would
recover anytime soon.
On Thursday, Microsoft set the wrong kind of record, as it reported the first
year-over-year quarterly revenue decline since it first sold stock to the public
in 1986. In its third quarter, which ended March 31, Microsoft said its revenue
fell 6 percent, to $13.65 billion, from $14.45 billion. It reported net income
of $2.98 billion, or 33 cents a share — a 32 percent drop from the $4.39
billion, or 47 cents a share, reported in the period last year.
The company’s Windows franchise has come under unprecedented pressure during the
recession as consumers and businesses have shied away from buying new computers
or have purchased cheaper machines. While Intel, the chip maker, said last week
that the worst of the PC decline had passed, Microsoft displayed no such
“I didn’t see any improvement at the end of the quarter that gives me
encouragement that we are at a bottom and coming out of it,” Christopher P.
Liddell, Microsoft’s chief financial officer, said during a conference call to
discuss the company’s results. “They stopped getting worse, but that’s different
from they started getting better.”
The recession has generated a series of firsts for Microsoft, including its
first large layoff and first decline in Windows sales.
Microsoft, based in Redmond, Wash., said its earnings included 6 cents of
charges related to the layoffs and impairments to investments.
Analysts surveyed by Thomson Reuters had expected Microsoft to earn 39 cents a
share, excluding the one-time charges, on revenue of $14.1 billion.
Intel supplies the processors for most PCs, while Microsoft supplies the key
operating system software.
Last week, Intel’s chief executive, Paul S. Otellini, declared that “the worst
is now behind us.”
Mr. Liddell of Microsoft maintained a more somber tone. “While we would all like
to think a recovery will be soon and painless, we actually believe it will be
slow and painful,” he said.
Still, shares of Microsoft rose in after-hours trading after release of the
results as investors apparently took solace from the company’s cost-cutting
Microsoft has lowered its forecast of its operating expenses by as much as $1
billion for the year.
“Microsoft, like everyone else, has got serious about cost-cutting,” said
Brendan Barnicle, a software analyst with Pacific Crest Securities. “They never
really had to do that before, and investors had been hoping they would cut
Microsoft’s online services business, which competes with Google and Yahoo,
continued to disappoint observers as a depressed advertising market pushed sales
down to $721 million, from $843 million.
“The online business looked bad, but I still believe they have to be in that
space to fulfill the larger vision of where Microsoft is going,” said Richard
Williams, the senior software analyst at Cross Research. “It may mean that they
have to acquire rather than build.”
Microsoft has been in talks with Yahoo about some kind of partnership in online
In the company’s core Windows business, sales declined to $3.4 billion in the
quarter, down from $4 billion in the period last year.
Netbooks, the cheap, small laptops that have surged in popularity, remained the
big story. According to Microsoft’s research, PC sales fell 7 to 9 percent
during the quarter. Excluding netbooks, traditional PC sales fell 15 to 17
Last quarter, netbooks accounted for about 10 percent of PC sales, Microsoft
said. Netbooks are a mixed blessing for Microsoft. The company’s average selling
price for Windows has declined, because it ships a discounted version of the
older Windows XP on netbooks. Microsoft’s Windows profit fell 19 percent, to
On a positive note, many customers have bought netbooks as complements to their
existing computers, representing fresh revenue for Microsoft and Intel during
these lean times.
However, “there are some real challenges in that business behind this shift to
the low end,” said Israel Hernandez, director of software research at Barclays
Capital. “And on the horizon, you have Apple and Google who appear ready to
introduce their own takes on netbooks.”
Microsoft declined to offer specific financial guidance for the coming quarters.
Shares of Microsoft ended regular trading Thursday at $18.92, up 14 cents. The
company released third-quarter figures after the market closed, and in
after-hours trading the shares rose more than 3 percent, to $19.50.
Microsoft Profit Falls
for First Time in 23 Years, NYT, 24.4.2009,
Exxon Mobil Posts
Biggest US Quarterly Profit Ever
October 30, 2008
Filed at 9:01 a.m. ET
The New York Times
By THE ASSOCIATED PRESS
HOUSTON (AP) -- Exxon Mobil Corp., the world's largest
publicly traded oil company, reported income Thursday that shattered its own
record for the biggest profit from operations by a U.S. corporation, earning
$14.83 billion in the third quarter.
Bolstered by this summer's record crude prices, the Irving, Texas-based company
said net income jumped nearly 58 percent to $2.86 a share in the July-September
period. That compares with $9.41 billion, or $1.70 a share, a year ago.
The previous record for U.S. corporate profit was set in the last quarter, when
Exxon Mobil earned $11.68 billion.
Revenue rose 35 percent to $137.7 billion.
On average, analysts expected the company to earn $2.39 per share in the latest
quarter on revenue of $131.4 billion.
Exxon Mobil's results got a boost of $1.62 billion in the most-recent quarter
from the sale of a natural gas transportation business in Germany. It also took
a special, after-tax charge of $170 million related to a punitive damages award
related to the 1989 Exxon Valdez oil spill.
Excluding those items, third-quarter earnings amounted to $13.38 billion --
nearly 15 percent above its previous profit record from the second quarter.
As expected, Exxon Mobil posted massive earnings at its exploration and
production, or upstream, arm, where net income rose 48 percent to $9.35 billion.
Higher oil and natural gas prices propelled results, even though production was
down from the third quarter a year ago.
Oil producers are coming off a quarter during which crude prices reached an
all-time high of $147.27 -- and their profits have reflected it. Crude prices,
however, have quickly fallen 50 percent from the summer's highs, and the global
economic malaise has raised questions about energy demand at least into 2009.
Some companies, especially smaller producers, are scaling back spending on new
exploration and production projects because of the uncertainty, though analysts
say that its less likely to happen at the well-heeled giants like Exxon Mobil.
Company shares rose 96 cents to $75.61 in premarket trading.
Exxon Mobil Posts
Biggest US Quarterly Profit Ever, NYT, 30.10.2008,
Data May Explain U.S. Gloom
The New York Times
By FLOYD NORRIS
profits earned in the United States rose much more rapidly from 2005 through
2007 than had been earlier reported, making the subsequent fall seem even more
precipitous, government figures showed Thursday.
The revised figures may help to explain the sense of pessimism that has been
reported in surveys of consumers and business executives, said Robert Barbera,
the chief economist of ITG, an economic research company. Pointing to the
previous profit figures, some commentators had suggested there was more gloom
than the economic data seemed to justify.
First-quarter profits earned in the United States by American companies have
fallen 18 percent from their peak, the revised figures show, rather than the 11
percent previously reported.
That decline has been partly offset by soaring overseas profits for American
companies. On Thursday, the government raised its estimate of those profits in
the first quarter, even as it reduced its estimate of profits earned in this
By the latest measure, first-quarter overseas profits were the highest they have
ever been for American companies — up 25 percent from the third quarter of 2006,
when domestic profits peaked.
Overseas profits, while important to shareholders, do not reflect the
performance of the American economy or the prospects for employment in this
country. Surveys show that both business executives and consumers expect
declines in jobs in America in coming months.
The figures show that more than a third of profits earned by American companies
are now made overseas. In the first three months of this year, the proportion
was 35 percent, nearly twice what it was a decade ago.
The revised data shows that profits of American companies are down 7 percent
over all, rather than the 2 percent previously reported.
The revised figures were contained in the revisions of the gross domestic
product numbers issued Thursday by the Bureau of Economic Analysis, a part of
the Commerce Department.
Brent R. Moulton, the bureau’s associate director for national economic
accounts, said the new figures reflected preliminary data from the Internal
Revenue Service for 2006, and revised figures for 2005. For 2007 and 2008, the
changes reflect assorted revisions in estimates of the performance of various
Because the figures are largely based on tax returns, the eventual totals are
used as clear indicators of overall economic performance of American businesses,
both privately owned companies and those owned by shareholders.
The revised figures indicate that in the third quarter of 2006, when domestic
profits of American companies peaked, the annual rate of profits was $1.27
trillion, $100 billion more than had previously been estimated. That figure fell
to $1.04 trillion in the first quarter of this year, the lowest rate since the
third quarter of 2005.
By contrast, the overseas profits of American companies came in at an annual
rate of $557 billion in the first quarter of 2008, an increase of more than $100
billion from the 2006 quarter.
The profit figures in the government report represent operating profits, not
changes in the value of assets. That policy means that the profit figures for
financial industries estimated by the government are now far higher than the
ones being reported to shareholders. Mr. Moulton said that write-downs of the
value of securities, or write-offs of bad loans — which have cost banks tens of
billions of dollars — are not included.
Were they included, it seems certain that the decline in profits earned in the
United States by American companies would be even larger than was indicated by
the figures released Thursday.
Profit Data May Explain U.S. Gloom, NYT, 1.8.2008,
profits soar on record oil price
July 29 2008 08:33
Last updated: July 29 2008 08:33
The Financial Times
By Sylvia Pfeifer
crude prices and soaring natural gas prices helped BP on Tuesday to report a 28
per cent rise in second-quarter profits to $9.46bn (£4.74bn), from $7.37bn a
Replacement cost profit, which excludes gains from the value of the company’s
crude oil inventories, was up 6 per cent to $6.85bn for the quarter. It rose 23
per cent to $13.44bn for the second half.
The strong results helped lift BP’s shares nearly 2 per cent to 528½p in early
morning trading in London.
The company has been locked in a bitter battle for control of its Russian joint
venture, TNK-BP, which accounts for almost a quarter of BP’s worldwide
BP’s Russian partners have demanded the dismissal of Robert Dudley, who heads up
TNK-BP, who they say is treating the venture as a subsidiary of BP. Mr Dudley
fled Russia last week to run the business from a secret location abroad.
In its results statement, BP warned that while it continued to work to resolve
these matters, “currently it is not possible to predict the ultimate outcome if
these matters remain unresolved”.
Meanwhile, the company said production for the second quarter was broadly flat
compared with the same period in 2007, at 3.83m barrels of oil equivalent per
day. BP is counting on the start-up of the long-delayed Thunder Horse field in
the Gulf of Mexico to boost output in the coming months.
Profits at the company’s refining division collapsed from $2.7bn to $539m. The
company said higher energy costs continued to hit the division’s profits,
especially in the US.
BP said it would pay a dividend of 14 cents a share for the quarter, up from
BP profits soar on record oil price,
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