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After acquiring The Dow Jones, Murdoch is mapping the road ahead for the company as News Corp. is set to bolster WSJ’s presence, especially in Europe and Asia and plan to sell off Dow Jones’ collection of Ottaway community newspapers to accumulate money for it.

While announcing company’s fourth quarter earnings, Murdoch disclosed its further plans. To expand WSJ’s reach for global news, Murdoch reaffirms its planed investment in Europe and Asia to expand coverage of national, international and non-business news, to compete with The New York Times and other (US) national newspapers.

However, Murdoch’s decision to sell Ottaway group, raises some doubts as Jim Ottaway, who has 7 per cent of Dow Jones voting shares, has been one of the most vocal critics of the sale to News Corp, saying Mr Murdoch’s hands-on editorial style and track record in China would damage the independence of the Journal. It might be a major reason behind the decision rather than little money, which Murdoch will get from it.

Last week, News Corp. sealed a hard-fought Dow Jones deal for $5 billion, or $60-a-share offer, which was 67% higher than Dow Jones’ trading price before word of his proposal, became public.

By acquiring Dow Jones operations, News Corp might consider lowering advertising rates or the price of subscriptions to snare business from the Times as by combining duo; it will save up to $50m annually.

News Corp. and Dow Jones executives are considering dropping online fees for WSJ.com to gain healthy profit in the long run. However, for the Journal, Murdoch won’t take similar measures. Media mogul also rates the deal as a perfect complement to his upcoming Fox Business Network, which will launch on Oct. 15. News Corp. plans to invest up to $200 million in it, but Dow Jones’ alliance with CNBC, which runs for another five years, could be an obstacle for Murdoch to expand globally.

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Via: Forbes

It seems that the failed efforts to buy EMI still prevailed over Warner Music as the US record company’s third-quarter losses mount more than expected.

Losses were expected due to the volatility in the market, but customers’ inclination toward the digital music, amplified Warner Music’s woes.

In the third quarter ended in June, company made a $17m (£8.4m) net loss, or 12 cents per share, compared to the $14m a year earlier, or 10 cents per share. Excluding non-recurring items related to a corporate restructuring and settlement, the loss in the 2007 quarter was $29 million, or 20 cents per share.

Total revenue of the quarter slides to $804 million or 2% from $822 million a year ago, but on a constant-currency basis, revenue fell 5%.

Revenue of recorded music alone fell 4% to $653 million, as domestic recorded music sales fell 1% to $345 million, whereas international recorded music sales dip 7% to $308 million. WM revenue dips, due to the decreasing sales in the big markets, such as Britain, France and Canada. With the bigger-than-expected loss, company’s shares fell $1.14, or 10 percent, to $9.89.

The disappointing result was expected as Music Company was under tremendous pressure. Warner was vying to purchase Britain’s EMI and spent $8m on the unsuccessful bid, which was later bought by Guy Hand’s Terra Firma for $4.87bn (£2.4bn).

While talking over quarterly result, Chairman and CEO of Warner Music Edgar Bronfman Jr said: “This proved to be a more challenging quarter industry wide, as the difficult global music environment persisted,”

Despite volatility in the market, the New York-based company’s digital revenue kindle the hope for the company’s future as it increased to $119 million, or 15% of total revenue, in the quarter. That is up 29% from $92m in the prior-year quarter and up 7 percent sequentially from $111 ml in the second quarter of fiscal 2007.

During the quarter, Albums by Linkin Park, Michael Buble, T.I., The Traveling Wilburys and The White Stripes were among Warner’s biggest sellers, which proves company’s worth in the market. It’s not like that after losing EMI battle to Terra Firma, Warner is on buyout radar, as some said, but to break the brink, Music Company has to come up with the effective strategy and immediately need to strike deals with artists and other industry players that will give Warner a piece of revenue from other segments of the music industry, such as merchandising and touring.

In the past few quarters, company’s digital business (digital recorded music, online downloads and mobile music) did well and to resurrect the company’s lingering profit, its time for Warner to give it more priority.

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Via: Telegraph

Computer networking company, Cisco Systems posts higher-than-expected earnings in the fourth quarter on a boost in quarterly sales.

Cisco reported 25% upsurge in its profit as company continues to attract good clientele for its routers and switches that direct traffic over the Internet and other technologies tied to a boom in multimedia online content.

Company’s net income for the fourth quarter climbed to $1.93 billion, or 31 cents a share, from $1.54 billion, or 25 cents, a year earlier. Excluding one-time charges, Cisco earned 36 cents per share, a penny above the estimate.

Revenue for the period surge 18% to $9.43 billion from the $7.98 billion a year ago. The revenue also beat Wall Street’s estimate of $9.29 billion in sales.

Fourth quarter result also helped company to post good annual result as for full fiscal year ending in July, Cisco’s revenue surged 23% to $34.9 billion from 2006. Company strengthened its core customer’s base after acquiring Scientific-Atlanta last year. That segment contributed $2.8 billion to net sales for the year, compared to $989 million last year.

Buoyant with the quarterly result, Cisco ups its expectation as they assume that revenue will gain 12 to 17% for 2008, compared with a previous prediction of 10 to 15%. For the current quarter, the company expects revenue of $9.45 billion to $9.55 billion, above the average analysts’ estimate of $9.39 billion.

As the news of profitable quarter hits the market, company’s shares head to new heights as it climbed $1.72 to $31.41 in after-hours trading. Before the earnings were released, Cisco’s shares rose 19 cents to close at $29.69.

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Via: Forbes

A US federal judge overturned a jury verdict ordering Microsoft to pay Alcatel-Lucent 1.5 billion US dollars for infringing on the French firm’s patents related to a digital music technology. The US District Judge Rudi Brewster in San Diego ruled that the jury’s damage award could not stand since one of the two patents was not infringed. Brewster further ruled that the second disputed patent was co-owned by a German research institute and Microsoft had a valid license. The music-compression technology was developed in AT&T’s Bell Labs, which later on turned out to be a part of Lucent, and was co-owned by Germany firm Fraunhofer. Microsoft had a licensing agreement with that company to use its technology.

The jury had earlier ruled in February that Redmond, Washington-based Microsoft must pay $1.52 billion for violating Paris-based Alcatel’s rights to the inventions. Alcatel-Lucent’s lawsuit against Microsoft had marked the largest patent verdict in US history. The lawsuit centered on origins of the MP3 standard, a digital audio encoding format that was developed nearly two decades back. The two sides argued in court in July over whether the verdict should stand. The patent dispute started with a 2003 lawsuit filed by Lucent Technologies, which was acquired last year by Alcatel. The complaint alleged that Microsoft customers Dell Inc. and Gateway Inc. have infringed 15 patents related to the MP3 technology for encoding and decoding audio files.

Alcatel-Lucent had contended in the court that technology used to encode and decode digital audio files in Media Player infringed on two of its patents. On the other hand, Microsoft maintained that it had paid Munich-based licensing firm Fraunhofer-Gesellschaft 16 million US dollars to legally use the disputed MP3 technology. Alcatel-Lucent had also argued that Fraunhofer had no right to license the MP3 technology, however, the federal judge said in the filing that the right to sell the intellectual property in question extended to both Lucent and Fraunhofer. Moreover, the judge also noted that ownership of the second disputed patent was questionable, and a retrial may be needed to resolve that matter.

The recent ruling overturning the earlier judgment is no doubt delivered a major setback to Alcatel-Lucent. Reacting to the judgment, Alcatel-Lucent instantaneously said it intended to appeal the ruling. Commenting over the ruling, Alcatel-Lucent spokeswoman Mary Lou Ambrus has said, ’shocking and disturbing, especially since — after a three-week trial and four days of careful deliberation — the jury unanimously agreed with us, and we believe their decision should stand’.

Microsoft general counsel Brad Smith speaking over the development said, ‘The ruling is a victory for consumers of digital music and a triumph for common sense in the patent system.’ Microsoft has said in its statement that there will be no new trial unless the French networking company appeals the decision to the US Federal Circuit Court and succeeds in overturning the San Diego court’s ruling. It further said that even if that is the case, damages from the original ruling will not be reinstated.

The recent riling on patent infringement has certainly brought relief to a number of other companies as the jury’s ruling had left other providers of hardware and software that support MP3 files vulnerable to claims from Alcatel-Lucent. However, Alcatel-Lucent seems to be all set to appeal in the higher court against the decision as its spokeswoman has said, ‘we still have a strong case and we believe we will prevail on appeal’.

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Uncertainty prevailed over the fate of International Bank of Qatar’s (IBQ) takeover bid for Bahrain’s Ahli United Bank as IBQ confirmed the acquisition negotiation has stalled.

The main reason of blocking further advancement of the talks are centered around the fact that IBQ is accusing AUB for their unbending attitude as shareholders were insisting for the third party, rather than the Qatari firm, to have access to its books. By imposing such ban, it’s clear that Bahrain’s company doesn’t want to merge with the Qatari firm, as without knowing the entire financial system, it’s impossible to evaluate the financial condition of the firm, which apparently makes IBQ unable to predict the takeover amount.

AUB shareholders also seek to limit the viability and scope of the deal to one month from the three months, which added another jitter to IBQ.

Protecting shareholders’ vows, AUB second-biggest shareholder, Tamdeen Investment Co. said that the company is septic about the deal and assures that if company will find any sign of deal’s possibility, shareholders will allow to open its books to IBQ.

International Bank of Qatar had made proposal in July, in which it offered $2.25 per share in cash and was eying for 55 percent shares. The offer valued the takeover at as much as $6.1 billion.

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Via: Reuters

After months of ruckus, Imperial Chemical Industries (ICI) has accepted $16.32bn (£8bn) Akzo Nobel’s indicative offer.

ICI accepted Dutch chemicals group’s offer, after it agreed to sweeten it to £6.7 from £6.5 a share over the weekend, as it came after a period of tense negotiations between the two companies and its advisers. Akzo will finance the deal by selling its adhesives and electronic materials businesses to Henkel.

After gaining support from the ICI, Akzo is now carrying out preliminary offer for the mutual business by August 9.

Initially, Akzo had approached ICI with £6-a-share indicative proposal, but the ICI board immediately turned it down as they were hoping the successful deal to be near £7 a share. Later, Dutch chemicals group increased the offer with 50 basic points and came up with £6.5 a share, but was also rebuffed by the board.

The board’s decision baffled some ICI shareholders as they assumed it low priced, which goaded the possibility of counter proposal. Dow Chemical, the US chemicals group, is weighting a possible rival to counter the Akzo’s bid, which has already hired investment bank Lazard to advise it on its “strategic options” for ICI. Above all, Dow Chemical has also shown its interest in Akzo.

Amid all these, the win-win situation for the Akzo is not certain, however investors have added panic showing apprehensions that Akzo is overpaying for ICI. To move ahead with the deal, both Akzo and Henkel need shareholders’ approval.

Some of its shareholders have pitched against the deal as TPG-Axon, which owns around 3.5% of Akzo, has cleared its stance that the company will not support the deal bona-fide. Nobody came forward to comment, however it’s clear that without shareholders’ clearance, the deal can’t be accepted.

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Via: Telegraph

Bidding war for ABN Amro is not ending even after posting a higher bid. Mishmash, in and outside the Dutch bank, is adding worries to RBS-led consortium and Barclays.

RBS-led consortiums’ vow to acquire ABN Amro will shape today as Fortis shareholders will vote on $96.8bn Dutch bank bidding, and on the other side, Barclays has formally launched its $89 billion or 13.15 euros in cash and 2.13 new Barclays’ shares for each ABN share bid for it.

For RBS-led consortium, the Fortis vote is a pivotal factor, as they will accumulate $17.8 billion for funding the deal. If RBS-led consortium succeeds in acquiring ABN Amro, the Belgian-Dutch Fortis would obtain the bulk of ABN Amro’s Dutch operations, and its wealthy private clients and asset management businesses worldwide. With Amro’s asserts, Fortis’s will add additional 4.3 % earnings per share by 2010, but board rule out any profit in short period.

Fortis has dual-headquarters structure, therefore the vote will take place twice - first in Brussels in the morning and then in Utrecht, Netherlands, in the afternoon. Shareholders can vote in both, either, or neither, but both meetings must approve the share issue for it to go through.

If shareholders approve the takeover and the share issue, analysts believe the consortium will almost certainly win ABN, but it could be a very close call.

After valuing the Fortis’ worth, Barclays presents anew proposal, which is worth about 34.54 euros per share of ABN, at the current share prices and foreign exchange rates. Barclays’ offer memorandum will run from August 7 until October 4 and asserts that its deal is still attractive because it will provide greater growth in the long run, despite the lower value.

Bid war has become acrimonious for claimers as they are using all possible, fair and unfair means to acquire Dutch bank. Although, ABN Amro has pulled its support from Barclays, yet it could not part itself away from it as Amro’s chief executive Rijkman Groenink has urged Fortis shareholders to vote against the RBS-led consortium’s takeover, alleging that shareholders will lose at least 25% face value of its shares. RBS countered the comment by alleging it as a “bizarre” coming after ABN’s withdrawal of its recommendation for the lower Barclays takeover offer.

After pulling its support from Barclays, ABN Amro has said it will advise its shareholders as to which suitor it prefers at a meeting to be scheduled by Sept. 27.

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Consumer products maker, Procter & Gamble (PG) posted 19% profit in the fourth quarter, due to cost controls and strong sales of new Gillette razors.

The company earned $2.27 billion, or 67 cents per share, compared to $1.9 billion, or 55 cents per share, a year earlier. Quarterly sales rose 8% to $19.27 billion from $17.84 billion, led by surging demand for its blades, razors, fabric, home care, and health care. Company registered 5% increase in its whole sales, while its overseas sale rose 3%.

Newly launched, Gillette Fusion shaving system and Venus Breeze shaver for women posted strong sales, whereas sales in its blades and razors increased by 18% to $1.4 billion.

Meanwhile, new products such as Tide detergent, Crest toothpaste and Olay skin care experienced growth and pushed company’s sales up by 12% to $76.5 billion for its fiscal year, from $68.2 billion.

After posting a lucrative quarter, PG is planning to repurchase $24 billion to $30 billion of its stock over the next three years at a rate of $8 billion to $10 billion per year.

A.G. Lafley, P&G’s chairman and chief executive, said:

Our strong cash generation results and our confidence in the business outlook have enabled us to substantially increase our share repurchase commitment for the next three years

Buoyant with the result, P&G is expecting overwhelming earning for the next fiscal year. It expects earnings per share to rise by $3.44 to $3.47. For the current quarter, the company forecast earnings per share of 88 cents to 90 cents, whereas Wall Street expects profits of 91 cents a share.

For the coming time, the company expects a tough competitive environment, as its rivals, such as Colgate-Palmolive Co. and Kimberly-Clark Corp., are spending on their restructuring savings to promote their brands. However, to counter its rival, P&G is funding its plans internally instead of taking restructuring charges.

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Via: Mercury-News

Johnson & Johnson is reducing its 4,820 employees worldwide, as it’s facing stiff pressure for patent expirations on two important drugs over the next two years, which can erode profits worth million dollars.

The cut would amount 3 to 4 % of the company’s global work force of 120,000 people. Company also predicted that the restructuring would entail pretax charges of $550 to $750 million in the second half of 2007 and to better integrate its Cordis business company would also consolidate certain operations at the pharmaceuticals segment. Apart from it, J&J will streamline companywide functions such as human resources, information technology and finance.

New Brunswick, N.J-based Johnson & Johnson is operating from 57 countries, worldwide, however, it declined to elucidate, exactly where the cuts would take place. Company gives indication that it would close a Mountain View, Calif., operation and eliminate the jobs of 600 of the people who work there and additional 200 people there will be relocated.

J&J is hoping to meet its 2007 profit targets of $4.02 to $4.07 per share, as company feels that the job cuts and other streamlining efforts would save $1.3 billion to $1.6 billion a year. News pushed J&J’s shares by $1.21, or 2 percent, to $61.28.

Pharmaceutical company lost its customers confidence, when federal health advisers and medical researchers have raised safety questions about drug-coated stents. Research has alleged that most patients with drug-coated stents face a higher risk of heart attacks and death than patients with bare-metal stents, and that all stent users have an increased risk of blood clots.

Report shrinks the sale of such stents, as earlier this month Johnson & Johnson discloses that its sales for Cypher drug-coated stents in US dropped 41 percent.

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Via: New York Times

General Motors reported a quarterly profit that conquered Wall Street estimates as it benefited from cost-cutting and growing sales overseas.

In the quarter, GM earned $891 million, or $1.56 a share, compared to the massive loss of $3.4 billion, or $5.98 a year before. Detroit-based GM almost broke even in North America, but profit boosted by gains in Europe, Latin America and Asia, sales of higher-margin vehicles and a one-time, tax-related gain.

GM earned $213 million profit from Latin America and $227 million at its Asia-Pacific division, whereas once its stronghold, the North American division, it lost $39 million, where its vehicle’s sales continuing eroding.
Excluding some one-time items such as charges related to the bankruptcy of parts supplier and former subsidiary Delphi, GM earned $2.48 per share, from $2.03, on that basis; GM was expected to earn $1.11 a share.

Profitable quarter news improved GM performance in the market, as while trading in the New York Stock Exchange, GM’s shares surges to as high as $34.65, a 4.4 percent.
Despite signs of recovery, analysts warned that GM would face a tough second half as stiff competition and a weak U.S. housing market raise the stakes for automakers to roll out new sales incentives.

Although, automaker has done well in the oversees markets, and got maximum benefit from global economic growth, yet it has to do more in world’s most lucrative North American market, if it want to regain its acme position from Toyota, which is continue to eating into the American auto market shares.

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Via: Washington-Post