MACHINERY
Rolls-Royce cuts forecasts
British engine-maker Rolls-Royce yesterday downgraded its profit forecast for next year, its fourth warning in just over a year, and warned it could cut its dividend due to sharply weaker demand for spares and services to existing aero-engines. The company forecast that profit next year would now be more than 30 percent below a current consensus forecast. The 131-year-old company based in Derby, England, said it now expected profit headwinds of £650 million (US$986.93 million) next year, up from the £300 million drag identified in July.
COMPUTERS
Lenovo loses US$714m
Chinese technology giant Lenovo Group Ltd (聯想) yesterday said that it saw a loss for the second quarter following a cost restructuring plan, despite stronger sales in its mobile business. Lenovo posted a net loss of US$714 million for the second quarter ending Sept. 30, compared to a profit of US$262 million in the same period last year. Revenue increased 16 percent to US$12.15 billion, while the company also saw a pre-tax loss of US$842 million.
AUSTRALIA
Jobless rate below 6%
The jobless rate dropped to a better-than-expected 5.9 percent last month, data showed yesterday, lowering expectations that the central bank would cut record-low interest rates. The Bureau of Statistics figures showed that 58,600 jobs — 40,000 full-time and 18,600 part-time — were created last month, a surprise given below-trend economic growth. It is the first time the jobless rate has dropped below 6 percent since May.
CHINA
New credits decline
The broadest measure of new credit fell last month, adding to evidence six central bank interest-rate cuts in a year have not spurred a sustained pick up in borrowing. Aggregate financing was 476.7 billion yuan (US$75 billion), according to a report from the People’s Bank of China yesterday. That compared to a projection by economists for 1.05 trillion yuan and September’s reading of 1.3 trillion yuan.
PHARMACEUTICALS
Merck beats estimates
Merck KGaA, Germany’s second-largest pharmaceutical company, yesterday posted a third-quarter profit that beat analysts’ estimates and raised its forecast for the full year. A measure of profit excluding some costs and one-time items rose 10.2 percent to 944 million euros (US$1.02 billion) from 856.6 million euros a year earlier, the Darmstadt-based company said. The conglomerate, which makes products ranging from liquid crystals for screens to drugs to treat multiple sclerosis, expects to complete its acquisition of Sigma Aldrich Corp on Wednesday to boost its full-year sales and earnings, excluding exceptional items.
FRANCE
Hermes sales surge
Luxury handbag maker Hermes International SCA yesterday said third-quarter sales rose 15 percent as Chinese tourists taking advantage of the weak yen fueled demand in Japan. Revenue climbed to 1.14 billion euros, Paris-based Hermes said. Analysts predicted 1.15 billion euros, according to the median of 13 estimates compiled by Bloomberg. Excluding currency swings, sales climbed 7.9 percent, in line with the 8 percent estimate. Hermes reiterated its mid-term target of 8 percent annual revenue growth excluding currency swings.
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
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
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