METALS
Alcoa reports Q2 losses
Alcoa Inc opened the second-quarter earnings season on Monday with a US$2 million loss. The aluminum maker is the first of what is expected to be a number of companies reporting lower results because of a sluggish global economy. Revenue fell 9 percent to US$5.96 billion, primarily because of an 18 percent drop in aluminum prices from a year ago. On a per share basis, Alcoa broke even. The results included one-time items of US$63 million. Excluding those, Alcoa earned US$61 million, or US$0.06 a share, compared with a net income of US$322 million, or US$0.28 per share, a year ago. Analysts surveyed by FactSet expected Alcoa to earn US$0.05 per share on revenue of US$5.83 billion. Analysts typically exclude one-time items.
RETAIL
M&S sales hit by wet season
Bellwether British retailer Marks & Spencer (M&S) posted its worst underlying quarterly sales performance in three-and-a-half years after the wettest April and June since records began hammered trade in womenswear. Marks & Spencer, which sells clothes, footwear and houseware, as well as upmarket food, said sales at UK stores open more than a year fell 2.8 percent in the 13 weeks to June 30, its fiscal first quarter, in the firm’s worst quarterly drop in sales since the third quarter of the 2008-2009 fiscal year. The outcome compared with analysts’ consensus forecast of a fall of 3 percent, according to a company poll of 12, and a decline of 0.7 percent in the fourth quarter of the previous year when the retailer erred by running out of best-selling women’s knitwear and footwear lines.
FINANCE
US consumer loans rise
US consumers stepped up their borrowing in May, helped by the largest one-month gain in credit card debt in more than four years. However, overall credit card use was still well below where it was just before the Great Recession began. The US Federal Reserve said on Monday that consumer borrowing rose by US$17.1 billion in May from April. The increase drove total borrowing to a seasonally adjusted US$2.57 trillion — just below an all-time high of US$2.58 trillion reached in July 2008, seven months after the recession began. Borrowing has increased steadily over the past two years, but most of the gain has been driven by auto and student loans. The category that measures activity in those loans increased by US$9.1 billion in May to a record US$1.7 trillion. A measure of credit card debt increased by US$8 billion in May, the biggest one-month jump since November 2007, but overall level rose to just US$870 billion.
FOOD
Pepsi, Theo Mueller team up
Global drinks and snacks giant PepsiCo said on Monday it would enter the fast-growing US yogurt market this month, teaming up with a German dairy company to introduce premium European products. PepsiCo, the US maker of Pepsi-Cola, Frito-Lay chips and Quaker Oats granola bars, announced a joint venture with Theo Mueller Group, the largest privately held dairy business in Germany. The yogurt roll-out marks the first time either company has offered dairy products in the world’s largest economy. The US yogurt market is booming, with brands and types proliferating in store dairy aisles as part of growing consumer demand for natural foods. PepsiCo said the “spoonable” US yogurt market was projected to grow to US$9 billion in 2016, from US$5.7 billion last year.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure