EVA Airways Corp (長榮航空), Taiwan’s second-largest airline, posted a narrower loss in the second quarter as gains from fuel-hedging contracts offset slumping travel demand.
The net loss for the April to June period was NT$1.88 billion (US$57 million), compared with NT$3.68 billion a year earlier. The figures were derived from first-half results announced by the Taoyuan-based company yesterday. The loss was wider than the median estimate for a NT$575 million loss in a survey of six analysts.
EVA Airways posted NT$723 million of unrealized fuel-hedging gains in the first half, joining China Eastern Airlines Corp (中國東方航空) and Cathay Pacific Airways Ltd (國泰航空) in benefiting from rebounding oil prices. The paper profits helped mask the impact of a 12 percent plunge in Asia-Pacific international air travel caused by the global recession and concerns about swine flu.
‘BURDEN’
“The H1N1 virus is a burden,” said Peter Tzeng (曾耀德), a Taipei-based Polaris Securities Co (寶來證券) analyst. “Still, the global economy seems a bit better.”
He rates EVA “equal weight.”
EVA’s second-quarter sales fell 29 percent from a year earlier to NT$15.9 billion, following a 30 percent decline in the preceding three months, based on monthly exchange filings.
EVA fell 0.1 percent to close at NT$7.79 in Taipei trading before the earnings announcement. The carrier has climbed 3.9 percent this year, beating bigger rival China Airlines Ltd’s (中華航空) 1.7 percent gain.
EVA posted a loss of NT$1.68 billion in the first half of the year, or NT$0.43 a share, compared with a loss of NT$5.97 billion a year earlier, or NT$1.53, the company said in stock exchange filing yesterday.
Shanghai-based China Eastern Airlines, China’s third-biggest carrier, made a 2.79 billion yuan (US$408 million) paper hedging profit in the first half, up from 451 million yuan in the same period last year, it said this month.
OIL
Oil has risen 63 percent this year after dropping about 70 percent from a record last year. It traded at US$72.84 as of 3pm Singapore time.
The world economy will expand 2.5 percent in 2010 after contracting 1.4 percent this year, the IMF predicted last month.
Also See: Chinese airline East Star bankrupt, media reports say
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to