GDP, inflation forecasts cut
Australia’s central bank slashed its growth and inflation forecasts yesterday, citing sluggish exports due to global turmoil and the robust Australian dollar, which was squeezing local industries. The Reserve Bank of Australia (RBA) said it was expecting GDP growth of 2.75 percent for the 12 months to June this year, compared with the 3.5 percent previously forecast, with the economy performing “weaker than expected.” Inflation was expected to be 2 percent over the same period, the RBA said in its quarterly statement on monetary policy, with the consumer price index falling “very sharply” to about 1.5 percent in the early months of hits year. It had previously flagged inflation of 2.25 percent.
AIG profit doubles in Q1
Insurer American International Group (AIG), which came close to collapsing during the financial crisis before being bailed out by the federal government, said on Thursday that its profit grew more than twofold in the first quarter. AIG reported that its net income, after paying preferred dividends, climbed to US$3.2 billion, or US$1.71 a share, in the first quarter. That compares to net income of US$1.3 billion, or US$0.31 a share, in the same period last year. The company’s after-tax operating income, which excludes the impact of certain investments and hedging activities, was US$3.1 billion, or US$1.65 a share. In the prior-year period, it was US$2.1 billion, or US$1.34 a share. Analysts polled by FactSet were expecting on average adjusted net income of US$1.19 a share in the latest quarter.
Hynix drops bid for Elpida
SK Hynix Inc, the world’s second-biggest chipmaker, dropped its bid for Elpida Memory Inc, worsening the Japanese company’s chances of finding another suitor as it tries to restructure after filing for bankruptcy. SK Hynix, the only company that had publicly expressed interest in buying Tokyo-based Elpida, decided not to participate in the second round of bidding, the Icheon, South Korea-based company said in a regulatory filing in Seoul yesterday after a board meeting. The move makes it harder to revive Elpida as devices such as Apple Inc’s iPad hurt demand for dynamic random-access memory, or DRAM, chips.
Kraft profit beats estimates
Kraft Foods Inc’s quarterly profit slightly exceeded Wall Street estimates, helped by price increases and an earlier Easter holiday. North America’s largest packaged food maker also said on Thursday it was on track with plans to split into two companies later this year. It also reaffirmed its full-year growth targets. Kraft posted net earnings of US$813 million, or US$0.46 per share, in the first quarter, up from US$799 million, or US$0.45 per share, a year earlier. Excluding items, earnings were US$0.57 per share. On that basis, analysts on average were expecting US$0.56 cents per share, according to Thomson Reuters I/B/E/S.
Qantas delays two A380s
Embattled carrier Qantas said yesterday it will delay the delivery of two A380 superjumbos as part of a further A$400 million (US$410 million) in spending cuts as it works to turn its business around. The Australian airline had already announced A$500 million in cuts in February, which included job losses for cabin crew and pilots as well as in catering, engineering and ground operations.