Goldman profit tops estimates; raises dividend

6:46 PM dividend, estimates, Goldman, profit, raises No Comments

Brendan Mcdermid / REUTERS

A Goldman Sachs sign is seen on the floor of the New York Stock Exchange.

Goldman Sachs said Tuesday its first-quarter earnings fell from a year earlier, but were better than many analysts had anticipated thanks to aggressive cost-cutting and better-than-expected investment banking and trading revenues.

Goldman earned $2.1 billion, or $3.92 per share, during the quarter. In the year-ago period, which was generally stronger for investment banks' trading and banking activity, Goldman earned $4.38 per share, excluding a one-time cost for buying back preferred stock.

The Wall Street investment bank also said it would raise its quarterly dividend to 46 cents per share from 35 cents.

Late last week, Goldman revealed that its Chief Executive Lloyd Blankfein received a $16.2 million pay package last year, a 15 percent increase over the year before that came primarily from a salary bump and greater stock rewards.

According to a filing with the U.S. Securities and Exchange Commission, Blankfein's compensation package included a $2 million salary, a $3 million bonus and $10.7 million worth of stock.

Goldman earned a $2.5 billion profit during 2011, down from $3.6 billion in 2010, and its share price fell 46 percent last year, amid a slowdown in investment banking deals and volatile trading conditions.

One of Wall Street’s most prestigious investment banks, Goldman hit the headlines in March after a column on the opinion pages of The New York Times decried a culture of greed and arrogance at the company.

Reuters contributed to this report.

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RIM's new leader raises doubts among investors

6:18 PM among, doubts, investors, leader, raises No Comments

TORONTO/LONDON — The new leader at Research In Motion on Monday dismissed talk of drastic change at the BlackBerry maker, a declaration seized on by impatient investors who say Thorsten Heins has only 12 to 18 months to turn RIM around.

Takeover talk, swirling around RIM for months, picked up steam as Heins took the helm at a once-dominant smartphone company that now struggles to compete. But RIM's shares tumbled more than 8 percent as investors wondered whether Heins could reverse RIM's decline.

"I don't think that there is some drastic change needed. We are evolving ... but this is not a seismic change," said Heins, who joined RIM in 2007 and previously served as a chief operating officer.

RIM's co-CEOs Mike Lazaridis and Jim Balsillie, the men who engineered RIM's rise, resigned on Saturday after intense investor pressure. Their presence had been seen as a big obstacle to a possible sale of the company, although Heins insisted that was not an option he was considering.

Shareholders and analysts have grown impatient in recent months and calls for Lazaridis and Balsillie to step aside had reached a crescendo. RIM has lost market share and market value after being comprehensively outplayed by Silicon Valley tech giants Apple and Google.

"If Thorsten really believes that there are no changes to be made, he will be gone within 15 to 18 months. He will be a transitional CEO and this will be a transitional board," said Jaguar CEO Vic Alboini, who leads an informal group of 16 RIM shareholders calling for a radical restructuring. The group holds a little less than 10 percent of RIM's stock.

Lazaridis and Balsillie - two of RIM's three largest shareholders with more than 5 percent each - will remain board members, while Lazaridis will also head a newly created innovation committee. Their new roles suggest continuity was a goal in the transition.

Critics have called for a new leader who can rejuvenate both the design and operational sides of the business, or prepare it for sale to one of a raft of rumored buyers.

Heins, a former Siemens AG executive, said during a conference call on Monday that he would hone rather than abandon current strategy at RIM, which after years of massive growth needed to start operating like a mature business, not a startup.

The new CEO, who scored his last major promotion as RIM was shedding some 2,000 jobs last June, said no further job cuts were currently planned and that with RIM's $1.5 billion in cash he had no qualms in spending on the right projects.

"If I have a great strategic project or a good business case I can go to the board anytime and ask for approval for additional investment and the money's in the bank to do this," he said.

INVESTORS DISAPPOINTED

Analysts were cautious.

"People may have been a little disheartened that he was defending the current RIM strategy," said Morgan Stanley analyst Ehud Gelblum. "I think (investors) might have wanted to hear a mea culpa."

"People would have been happier hearing 'we are on the wrong path'. We didn't hear a lot of talk about change."

Jaguar's Alboini criticized the retention of Balsillie and Lazaridis on RIM's board and called for several other board members to step down before RIM's mid-year annual meeting.

"If we're wrong, prove us wrong," Alboini said in an interview, referring to the group of shareholders who support his view. "This group is not going anywhere. This is just putting RIM in a position where it might be able to get back into the game. It's early days."

Barbara Stymiest, a former banking and exchange executive, will replace Lazaridis and Balsillie as the chair of the board. Stymiest, a RIM board member for five years, is also viewed as an insider tied to the old regime.

LOOKING AHEAD

Heins' immediate concerns are to generate sales of RIM's current lineup of BlackBerry 7 touchscreen devices, deliver on a promised software upgrade for its PlayBook tablet computer by February, and rally RIM's troops to launch the next-generation BlackBerry 10 phones later this year.

But even if he had a credible overall plan to foster change, some analysts question whether RIM had fallen too far behind its competitors to catch up.

Its existing product lineup has struggled to compete with Apple's iPhone and iPad and the slew of devices from Samsung and others using Google's Android operating system. In North America particularly, RIM has hemorrhaged market share during a year marked by product delays and a botched launch of the PlayBook.

"If RIM's going to grow in the U.S. ... they have to have products better than the iPhone or Android," said Pacific Crest analyst James Faucette. As of now, "they don't have products that are competitive with those, let alone better."

But RIM has also shown a renewed seriousness about getting its message delivered, hiring crisis management firm Sitrick and Company as strategic counsel.

Sitrick helps companies in crisis and celebrities navigating scandal. Clients have included Paris Hilton as she faced jail time and Michael Vick, an NFL quarterback involved in a dog-fighting ring. The firm also helped Roy Disney remove Michael Eisner as chairman of Walt Disney.

SEEKING A PLAN

Analysts circled their calendars for an analyst day in early May as the first opportunity for the new leader to lay out a detailed plan for reversing the decline.

The event "will now become the focal point to the unveiling of Thorsten's vision," CCS Insight analyst Ben Wood told Reuters. "The speed with which you make strategic changes and implement them is absolutely critical because the mobile phone business will not stand still."

"If there are no meaningful signs of an imminent turnaround, then I think the spotlight will turn back on to the assets that RIM holds and who they might be attractive to."

Investors have seized on any rumor of a deal involving RIM as a reason to celebrate, whether talk is of a pact with Amazon as reported by Reuters in December, or with Samsung last week.

Analysts have said logical buyers for RIM also include fellow-struggler Nokia, perhaps with support from Microsoft, and Facebook which is increasingly pushing its content to users via their mobile phones.

If there is no obvious buyer, Heins has more immediate options to add value to the business.

RIM could license its software or integrate its email package, a strategy that many analysts and investors have thought the company might pursue. Heins said it would be wrong to focus on that option but he is still open to discussions.

"RIM have had big challenges in the past and they succeeded in moving from a corporate product to be also a consumer product, to get a foot in the consumer market and very few people expected them to do that," consultant John Strand said.

"Now they have to reinvent themselves again."

RIM's U.S.-listed shares closed 8.5 percent lower at $15.56, for a market capitalization of little more than $8 billion. In the company's heyday, just three and a half years ago, it had a market capitalization around $80 billion.

Copyright 2012 Thomson Reuters.

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Luxury designer raises nearly $1 billion in IPO

10:41 AM billion, designer, luxury, nearly, raises No Comments

Supermodel heidi klum plants a ladies and "Project Runway" Judge Michael Kors, which sold almost 120 million dollars worth of shares in its initial public offering.

Luxury lifestyle company Michael Kors holdings almost $1 billion in initial public offering, which was listed above the expected price range Wednesday raised.

All in all have been 47.2 million shares at $20, generate revenues of $ 944 million sold. At that price the company at about $3.82 billion is estimated. The offer was expected originally priced at $17 to $19 apiece for 41.7 million shares, price.

Michael Kors itself sold 5.8 million shares in the IPO. Others offer shares belong to the company Chief Executive John Idol and its largest shareholder, sportswear Holdings Ltd. The company has sold any shares itself.

Kors, a well-known fashion designer and one of the judges on the long-running TV fashion show "Project Runway", is the founder and Chief creative officer of the company.

"A company like the public even in an uncertain market based can go on their recent successes," said IPOdesktop.com analyst Francis Gaskins. "they have done right a lot of things over the last few years."

The company has stayed profitable not only by the financial crisis, but has succeeded also his win to 72.5 million $ for fiscal year 2011 almost double.

The offer follows a successful initial public offering 2.1 billion of the Italian fashion house Prada SpA and a 487 million US-dollars going public of Italian luxury Shoemaker Salvatore Ferragamo.

Has another record year, in particular for watchmaker, luxury hotels, fashion and leather goods groups see strongly after the sharp fall 2009 had a rest themselves, and analysts of the luxury goods industry 2011 be.

Michael Kors holdings with 169 branches in North America and 34 in Europe and Japan, competing with retailers such as coach, Burberry, Ralph Lauren and Hermes international.

Shares are expected to trade on Thursday on the New York Stock Exchange under the symbol "KORS."

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ECB raises interest rates, indications of further increases in

9:45 AM further, increases, indications, interest, raises, rates No Comments

LONDON - the European Central Bank has its key rate on Thursday and hinted more to come, the last character, that it will derail not by the debt crisis in its mission to fight inflation.

The Bank agreed however, liquidity to the Portuguese banks extend emergency, as it has done with Greece and Ireland, although one of the major rating agencies of the country's bonds to junk status downgraded.

Thursday's quarter point hike to 1.5 percent, was the second this year and, more generally expected markets despite a global slowdown and the debt crisis, which caused almost Greece this month to the default.

While these risks, Trichet control of inflation the ECB said the main task was. His comments that reinforced expectations that it will at least a further interest rate this year as the Bank increase inflation, get running again with 2.7 percent below the target of almost 2 percent trying.

Although higher prices for a potentially overheating economy as Germany may be necessary, they will ensure that growth more indebted countries of the euro area, add Greece and Portugal. Overall, Trichet said that euro-zone economy grew in the second quarter but saw at a slower pace than 0.8 per cent in the first quarter and the uncertainty about the Outlook remained elevated.

Trichet said in a press briefing the Bank would "price developments monitor very closely". Traditionally, he used that phrase to indicate that those who cycle will, continue the tightening angle but that prices would rise not next month.

"A further quarter point rate to hiking, probably in October or November is still the central scenario his", said Marc Ostwald, market strategist at monument securities.

The euro as investors in the likelihood of more rate cost about a penny to $1.4364 hikes at a time when the ECB collect colleagues, as the Fed is not the intention of repealing their double filter borrowing rates.

The question of the Greece was never far away in Trichet's remarks.

Trichet, the end of October will be replaced by Mario Draghi, said it was important that Greece continue with its cost-cutting measures, the control of public finances. Press at the expense of hard a damaging debt default the Greek economy with higher growth and lower unemployment would make more resistant while avoiding, he added.

Trichet was, once again, that should any participation of the private sector in a second bailout of Greece on a voluntary basis and that nothing should be done calls for rating agencies, to beat a "selective default" value to the country.

Euro-zone Governments are in talks with banks and other financial institutions to obtain, to share, which is expected to be completed by September as part of the load of a second Greek bailout.

Even if Greece is € 110 billion ($157 billion) a rescue package last year, it need more money as it is effectively locked out of international bond markets. Expectations are that the second bailout will more or less the same size as the first.

The ECB has criticized for its tough stance on a possible Greek debt restructuring, which would force creditors to their share of the pain.

"An unelected governing throws an increasing influence on burden-sharing between the private sector and the taxpayers," Sony Kapoor, Managing Director said an economic think tank the newly. "This is problematic."

Trichet said, however, that the Bank had suspended security rules for Portugal - as it has done already with Greece and Ireland, if its liquidity operations, d. h. of the country's banks still governing cash also tap when Portugal's credit rating is considered junk-e. The move comes just days after Moody's credit rating on Portugal, Europe's third bailout recipient after Greece and Ireland, slashed by four scores.

"That was to do the right thing - but also for the ECB, another sign of the withdrawal," said Gabriel Stein, an economist at Lombard Street research.

Stone said: this is the most recent example of this, such as the ECB which loses much-vaunted independence – previously it had stressed bonds under a minimum rating would not accept.

"Should probably think standard Greece or Portugal as we still remain in the euro area, it seems just as likely that the distressed bonds as collateral, accept the ECB", stone said.

Earlier in the day instead of the Bank of England continue to outweigh its base interest rate to an all-time low of 0.5%, such as the tepid economic recovery in the United Kingdom concerns about inflation.

Also in markets was expected to keep decision of the nine-strong Monetary Committee, the rate unchanged for the month of 28 straight on Thursday.

Even though inflation to more than double the Bank target of 2 percent to 4.5 percent is running, the majority of the rate-setters keep inflation will fall quickly next year, such as the impact of rising energy costs, annual comparisons drops out.

Copyright 2011 associated press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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China raises prices, shrugs off growth slowing

5:32 PM China, growth, prices, raises, shrugs, slowing No Comments

Kevin Yao and Aileen Wang

Beijing (Reuters) - China interest rates for the third time raised this year on Wednesday, to clarify that inflation remains tame top priority, even as growth step of its huge economy facilitates gently.

The increase in the credit and deposit rates 25 basis points underlined China's quiet confidence, which is resistant enough to endure to more restrictive monetary policy of the world's second largest economy and is not vulnerable to the hard landing, that some investors fear.

China beat analysts close to, or even at the end of a cycle of rate increases and which was the latest move a preventive strike, before an another big jump in inflation data next week depositors provide to low income increased.

"Today's rate increase suggests that China's June remains inflation higher than might be expected and the second quarter GDP, solid, with our expectations", said Ligang Liu, head of greater China economics at ANZ in Hong Kong.

"The PBOC will help the interest-rate hike to optimize, their monetary policy by alleviate negative real interest rate problem to an outflow of deposits from the banking system to prevent the deterioration."

The latest move raised China's benchmark 6.56 percent and its one-year deposit reference rate by 3.5 percent a year lending rate, said the Central Bank.

The increases take effect Thursday, the Central Bank said in a brief statement on its website.

Response to concerns that this latest monetary tightening an already sluggish world economy will choke sold after the announcement, risk-weighted assets, particularly those with direct links to China's growth as the Aussie dollar.

China watchers could not agree whether is it more rate rises in the second half of the year. The people's Bank of China (PBOC) has banks reserve requirements nine times in this rate rises triggered in his nine-month cycle of the tightening of monetary conditions.

"China's inflation is almost to the end of battle." "There are already indications that the pressures that come", said Frederic Neumann, an economist at HSBC in Hong Kong. "Today's rate increase therefore the last in the cycle may have been"

GROWTH AND INFLATION

Hopes that close to a pause in the tightening of the PBOC may be considered a positive for stocks and could keep the rise in the Yuan onshore swap rates. Such expectations have helped, the Shanghai composite index bounce from nine month lows hit in June.

The world's second-largest economy expanded by more than 10 percent last year but has cooled down in 2011. First quarter growth was 9.7 per cent and data next week are expected, to the tempo eased to display 9.4 percent in the second quarter.

Evidence is growing that China's large manufacturing sector to lose momentum at home by both stricter policies and weakening of demand from abroad.

A survey of purchasing managers showed expanded the factory sector at its weakest pace in 28 months in June, mainly due to a drop in new orders. Many analysts estimate that the pace is a business, the extension on average to about 9 percent and industrial growth of around 13 percent.

In addition, a double-digit increase in wages should be included in already strong domestic demand.

With U.S. interest rates close to zero, Beijing is to ensure that it could attract more hedge funds in China, if that is too far prices. That would aggravate inflation the problem of excess liquidity and more fuel.

Just as there are insert fight with a negative real rate of return on their cash in banks to appease.

China's inflation accelerated a 34-month high of 5.5 percent in may as higher food prices and red-hot real estate market price pressure kept alive.

A Reuters poll forecast data due on July 15 will show that inflation rose to 6.3 percent in June-its highest level since mid-2008. Many economists estimate that inflation will reach its peak June or July.

Beijing is particularly sensitive to rising prices, the may be stirring the currency Union and threaten its leadership.

Wang Jun, an economist at CCIEE, a Government think tank, said that Beijing is again rate raise inflation, more stubborn than expected forced feel.

"When inflation comes down, there is no need to raise rates." But when prices rebound, could it further price increases, "he said."

(Writing by Koh GUI Qing and Vidya Ranganathan;) (Editing by Ruth Pitchford and Neil Fullick)

Copyright 2011 Thomson Reuters.

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