Earnings reports for US companies, such as Nike Inc and United Parcel Service Inc (UPS), underscore how executives are searching abroad for profits as growth in the world’s biggest economy slows.
For Beaverton, Oregon-based Nike, revenue from Asia, Africa and South America for its brand-name products rose by 47 percent in the quarter that ended May 31, compared with 4 percent for North America. At Atlanta-based UPS, shipments in Asia and Europe are helping push up profit expectations for the year.
“With the weak market here, these firms are forced to look for profitability elsewhere and [they are] doing it successfully,” said Edward Leamer, director of the Los Angeles-based UCLA Anderson Forecast, which has produced US economic forecasts for 50 years. “What’s likely for the decade ahead is that the economic energy of the globe will be much more concentrated on emerging markets and much less on the US.”
Stock markets outside the US have outperformed the Standard & Poor’s 500 Index since last month, as earnings reassure investors that growth prospects in emerging markets remain intact. No fewer than eight US companies in the past two weeks, including Caterpillar Inc, Citigroup Inc, General Electric Co and International Business Machines Corp have said they are optimistic about prospects in Europe, Asia and Latin American countries, such as Mexico.
Credit card data released by New York-based Citigroup on July 16 show purchases by US consumers lagging behind counterparts in Asia and Latin America. Purchases by consumers in North America fell 7 percent during the second quarter from a year earlier, while they grew 15 percent in Latin America and 17 percent in Asia.
Nike’s orders for delivery through November this year also signal emerging market demand will remain strong. Orders for Nike brand athletic footwear and apparel from emerging markets rose 30 percent in the most recent quarter, excluding currency effects, compared with a year earlier. Orders of the Nike brand in China, the company’s second-largest market after North America, rose 16 percent, compared with 7 percent in North America.
UPS volume of exports in Asia grew by more than 40 percent during the second quarter, and the package-delivery company is reaching more customers in Vietnam and Malaysia, chief executive D. Scott Davis said on a conference call on Thursday.
Meanwhile, Europe may be shaking off the sovereign-debt crisis that rattled markets this year and is showing “solid” growth in the current quarter, he said.
“Europe has been somewhat of a pleasant surprise,” Davis said. “All of us are guarded about Europe just because of all the unknown, but I think all of us are seeing pretty good business in Europe.”
Davis’ assessment is backed by European Central Bank President Jean-Claude Trichet, who said Europe’s economy is stronger than some investors forecast.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”