Year: 2011

The Japanese government endorsed a scheme on Friday to help Tepco, Asia’s largest utility company, compensate victims of the disaster at its tsunami-stricken nuclear power plant and save it from financial collapse.

Naoto Kan, Japan’s prime minister, approved the plan to create a new body to facilitate funds to utilities companies expecting to pay nuclear accident compensation claims to victims.

It is said that a government committee will for a brief period take over the control of management at Tepco to monitor its restructuring measures.

The detailed compensation plan has yet to be released, but compensation is estimated to reach trillions of yen primarily from Fukushima residents living in the vicinity of the power plant.

Google’s advertising system is under investigation by the US Justice Department and it has put aside $500m to settle any potential charges, the Internet search engine revealed on its website on Wednesday.

The charge decreased the net income to $1.8bn, or $5.51 per share for Q1, Google said in a filing with the SEC late on Tuesday. It had earlier reported net income of $2.3bn, or $7.04 a share for Q1.

Google said: “In May 2011, in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $500m for the three month period ended March 31, 2011.”

The company said it cannot predict the ultimate outcome of this matter but believes it will not have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows.

US software giant Microsoft is in late stage negotiations to buy Internet phone service provider Skype in a deal that could be worth 8.5bn dollars, the Wall Street Journal reported on Tuesday.

Confirmation of the deal is expected later on Tuesday but sources warned the deal may still fall apart. Microsoft and Skype declined to comment.

The $8.5bn Skype deal would be the largest acquisition in the 36-year history of Microsoft. In 2007, Microsoft paid around $6bn for online advertising firm aQuantive, which until now was it’s biggest deal.

Skype is said to have an estimated 663 million users of its Internet telephony and video calling worldwide. It was founded in 2003 by the creators of file sharing technology Kazaa, Niklas Zennstrom and Janus Friis. In 2005, the company was sold to eBay for $2.6bn in cash and stock.

International consumer electronics giant Apple has beaten search engine Google to the top spot as the most valuable global brand, according to a key study published by Millward Brown.
 
Apple, which produced products including the iPad, iPod and iPhone, moved up from third place in 2010 to the top position after its brand value grew year-on-year from $83bn to $153bn, according to the study.
 
The value of Apple’s brand has increased by 84 percent over the last 12 months, surpassing other brands such as Coca-Cola, Microsoft, IBM and McDonald’s, said the agency.
 
The Google brand, which held the top spot for four consecutive years, slipped two percent to $111.4bn.
 
Nigel Hollis, chief global analyst at Millward Brown, said: “Apple and Google have different business models, with Google focused on free services and open systems, while Apple eschews the open model in favor of what it calls the integrated model.”

Rio de Janeiro based Vale SA, the globe’s biggest iron ore producer, announced record Q1 net profits as revenue doubled due to higher sales of metals such as copper and nickel, the company said on Friday.
 
According to analysts Vale was expected to post per-share profit of $1.11 on an adjusted basis, the average of 12 estimates compiled. However, net income increased to $6.826bn, or $1.29 a share, from $1.604bn, or 30 cents, the same period a year ago.

Vale said its result was triggered by a “robust increase” in global industrial production levels during the quarter at a rate of nearly 9 percent annually, which brought on higher-than-expected demand for metals and minerals.

The company announced operating revenues of $13.548bn in Q1, the highest level for a first quarter, and operating income, as measured by adjusted EBIT reached a record mark of $7.969bn. Excluding the non-recurring gain, the adjusted EBIT of $6.456bn is the highest for a first quarter for the company.

“The recovery is broadening, both in terms of sectors and geographically, contributing to the sustainability of the expansion cycle,” Vale said.

France’s second largest listed bank by market value, Societe Generale, announced on Thursday lower than anticipated first quarter results due to a charge tied to its own debt and provisions resulting from political turmoil in the Middle East.
 
Group net profit for the quarter fell 13.8 percent to €916m from €1.063 the year before. The average estimate given in a recent poll of analysts was €1.06bn.
 
Revenue increased by 7.7 percent to €6.62bn but was also below expectations of €6.73bn with earnings up 9.8 percent as French consumer and investment banking earnings improved on lower bad loan provisions.
 
Frederic Oudea, the group’s chairman and CEO, said: “The Q1 results provide further evidence of the robustness of the Group’s businesses and their ability to grow in an uncertain international, political, economic and financial environment. Drawing on its substantial capital-generating capacity, the group continued to systematically realign its operations to the new regulatory environment and implement its resolutely customer-focused strategy, based on a rigorous allocation of its financial resources.

Portugal’s caretaker government said late on Tuesday it has negotiated a bailout deal with the EU, ECB and the IMF worth €78bn over three years.

In a televised address to his nation caretaker prime minister Jose Socrates, said: “The government has obtained a good deal. This is a deal that defends Portugal.”

According to Socrates the terms of the agreement are similar to those signed by Greece and Ireland.

Portugal becomes the third Eurozone member, after Greece and Ireland, to be forced to negotiate an international bailout due to its crippling debt.

The terms of the Portuguese bailout seem more lenient, with this year’s target for the budget deficit having been raised from 4.6 percent GDP to 5.9 percent. There is also an extended deadline to reach it. Socrates stated that the deficit will have to be cut to 4.5 percent in 2012 and 3 percent in 2013.

A team of International and European officials from the EU, ECB and the IMF, commonly referred to as troika, is meeting with Greek government officials to measure its eligibility to receive another tranche of financial aid.
 
The meeting due to commence on Tuesday will be firstly with a technical team to be joined by the heads of delegation a week later.
 
Greece escaped default narrowly in May 2010 with the help of a €110bn bailout from the troika. The EU and IMF put in place a memorandum for the Greek government in may 2010 which outlines austerity measures and restructuring reforms in exchange for the €110bn bailout loan.
 
Greece has pledged to cut its budget deficit to below three percent of GDP by 2014 from a record 15.6 percent of in 2009.
 
The visit by troika comes just hours after Greece’s finance minister, Giorgos Papakonstantinou, expressed his opposition to debt restructuring.
 
Speaking at a news conference, he said: “There is no need for a debt restructuring and there is no need for a haircut on Greece’s debt.”

Anglo-Dutch energy giant Royal Dutch Shell announced a 41 percent rise in first quarter profits due to an increase in world oil prices and improved refining margins, the company said on Thursday.
 
Profits for Q1 were $6.9bn compared with $4.9bn in the first quarter of 2010, an increase of 30 percent.
 
Shell’s cash flow from operating activities for the first quarter 2011 was $8.6bn while cash flow from operating activities, excluding net working capital movements, was $13.1bn, compared with $10.4bn in the same quarter last year.
 
Oil and gas production was just over 3.5m barrels of oil equivalent per day, three percent lower than in Q1 2010. Production for the first quarter 2011 excluding the impact of divestments was in line with the same period last year.
 
Royal Dutch Shell CEO, Peter Voser, commented: “Our first quarter 2011 earnings have risen from year-ago levels, driven by higher industry margins and our own operating performance.”
 
He added: “We continue to crystallise new investment options for medium-term growth, including the confirmation of the Geronggong discovery in deep water Brunei, and new LNG potential in the Wheatstone development in Australia, where our gas discoveries have been included in a new partner-operated LNG project, which is under study.”

Healthcare conglomerate Johnson & Johnson said Wednesday it has agreed to buy the Swiss medical device maker Synthes for $21.3bn in stock and cash.
 
Buying Synthes would be the biggest acquisition for Johnson & Johnson, giving it a leading position in equipment to treat traumatic injuries and fractures.
 
The companies entered into a definitive agreement which sees Johnson & Johnson acquiring Synthes for CHF159 per share, according a shared statement on the Synthes website.
 
Bill Weldon, chairman and CEO of Johnson & Johnson, said: “Orthopaedics is a large and growing $37bn global market and represents an important growth driver for Johnson & Johnson. Synthes is widely respected for its innovative high-quality products, world-class R&D capabilities, its commitment to education, the highest standards of service, and extensive global footprint.”
 
“The combination presents a significant opportunity to jointly bring our products, services and educational offerings to the next level. Together, we will be a more attractive and exciting company for our employees, and a more resourceful partner for our customers,” said Michel Orsinger, president and CEO of Synthes.