BMW yesterday became the latest auto giant to feel the pain of the financial crisis, announcing production cuts and a huge drop in profits, as EU finance ministers gathered amid recession stormclouds.
As a string of leading companies revealed sinking profits, the luxury German car firm said its third-quarter net profit plunged 63 percent to 298 million euros (US$378 million) and would cut production by an additional 40,000 units this year.
Owing to the poor market climate and “uncertainties caused by the financial crisis, the profitability targets set for 2008 are no longer achievable,” it said in a statement. “The likely progress of business over the coming months cannot be forecast with any exactitude.”
Meanwhile, clothing-to-food retailer Marks and Spencer, seen as a barometer of consumer sentiment in Britain, said net profits sank by 43 percent to £223.2 million (US$352 million) in the first half of the year owing to tough trading conditions.
“Market conditions and consumer confidence declined through the half, leading to reduced profits year on year due to lower sales,” M&S chief executive Stuart Rose said in the earnings release.
There was similarly gloomy news from the world’s biggest temp agency Adecco which said its third-quarter net profit fell almost a quarter, with revenues in countries hard hit by the financial crisis showing the steepest declines.
It warned it would miss its business targets “in the quarters to come” due to “difficult market conditions leading to even more pronounced pressure on revenues in most countries.”
The results from such economic bellweathers were likely to darken the mood at a meeting of EU finance ministers in Brussels, being held a day after an official report forecast the 27-nation bloc was headed for recession.
“Investors have high expectations” for the next president to take action on the economy, said Sumitomo Trust Bank strategist Saburo Matsumoto.
The worsening outlook and weakening energy demand saw Brent crude oil price sink under US$59 per barrel, hitting the lowest point since February last year.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
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