These are stories Report on Business is following Thursday, July 25, 2013.
Auto makers surge
Detroit may be bankrupt, but the auto makers that put it on the map are powering ahead.
General Motors Co. stock rose today after the born-again car giant posted a dip in second-quarter profit to $1.2-billion (U.S.) or 75 cents a share from $1.5-billion or 90 cents a year earlier.
The latest quarter included a hit from unusual items that cut profit by 9 cents a share.
Revenue climbed to $39.1-billion from $37.6-billion.
“We continue to perform well in the world’s two most important markets, the U.S. and China,” said chief executive officer Dan Akerson.
“We also made further progress in our European business and saw the steady performance of our global brands Chevrolet and Cadillac.”
GM, remember, sank into bankruptcy protection in the recession, along with Chrysler Group, both resorting to government bailouts.
Yesterday, rival Ford Motor Co. posted an increase in profit to $1.2-billion or 30 cents a share while revenue rose to $38.1-billion as it cited record results in North America and the Asia-Pacific-Africa region of its operations.
Ford, which is also on a hiring spree of sorts, projected its pre-tax profit this year will be "equal to or higher" than last year's tally.
- GM profit beats on strong U.S. demand, smaller loss in Europe
- Ford posts better-than expected profit, boosts outlook
Shares of Facebook Inc. surged today on financial results that showed the world’s 1.15 billion “friends” are increasingly going mobile.
Facebook stock, still below its initial public offering price, was up by about 28 per cent after North American markets opened before inching back.
The social network topped the estimates of analysts after markets closed yesterday with a surge in profit, revenue and ad sales. What caught the market’s attention was the gain in mobile ad revenue, which is what investors wanted to see.
Facebook rebounded from a loss of $157-million (U.S.) or 8 cents a share a year ago to a second-quarter profit of $333-million or 13 cents a share.
Revenue climbed 53 per cent to $1.8-billion as ad sales soared 61 per cent to $1.6-billion. Of that, mobile accounted for 41 per cent, a jump from 30 per cent in the first quarter.
“We believe this rapid growth is driven by our unique ability to target ads,” said chief operating officer Sheryl Sandberg.
“We have one of if not the most effective mobile ad products.”
Chief executive officer Mark Zuckerberg, on a conference call with analysts, also rejected suggestions that teenagers are abandoning Facebook.
The social network now boasts 699 million daily active users, up by 27 per cent from a year ago. Monthly active users are up by 21 per cent to 1.15 billion, while monthlies on mobile platforms are up 51 per cent to 819 million.
Shares of Potash Corp. of Saskatchewan slipped after the agribusiness giant cut its outlook for 2013 profits.
Potash Corp. also unveiled a $2-billion (U.S.) stock buyback as it posted a jump in second-quarter profit to $643-million or 73 cents a share.
The company forecast earnings per share for the third quarter of 45 cents to 60 cents, while pulling back on its earlier projection for the year.
Potash Corp. now sees 2013 earnings per share in a range of $2.45 to $2.70, down from its April forecast of $2.75 to $3.25.
“Rising global demand for all three crop nutrients continues to reflect the underlying reality that farmers and fertilizer buyers around the world are working to improve soil fertility and food production,” said chief executive officer Bill Doyle.
“As this need for crop nutrients, especially potash, continues to grow, we believe it translates into significant opportunities for our company,” he said in a statement.
“As we have seen throughout our history, the timing of increases in demand and prices is not perfectly predictable, but we are confident that a commitment to running our business responsibly and with patience will be rewarded. We will continue to do the right things for long-term success, managing our assets to maximize the benefits for all our stakeholders.”
Teck profit slips
Teck Resources Ltd. posted a sharp drop in second-quarter profit today as coal and copper prices slumped.
Teck profit slipped to $143-million or 25 cents a share in the quarter, from $354-million or 60 cents a year earlier. Revenue declined to $2.2-billion from $2.6-billion.
Adjusted profit, meanwhile, slumped to $197-million or 34 cents from $398-million or 68 cents.
Prices for coal and copper fell by 23 per cent and 9 per cent, respectively, over the quarter from a year earlier, eating into revenue by about $350-million, Teck said.
“As a result, we have focused on cost reduction at all of our sites and have made significant progress,” the miner said.
“Also as a result of market conditions and other factors, we have slowed the development of certain internal growth projects and deferred capital spending,” it added.
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