World’s biggest companies report losses or falling profits

Hurriyet Daily News with wires

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From Japan’s Panasonic to Australia’s BHP Billiton, companies yesterday announced huge losses or dramatic falls in profits, signaling a new round of job cuts that might affect tens of thousands of workers worldwide.

Panasonic, the world’s largest consumer-electronics maker, will cut about 15,000 jobs after the deepening recession and stronger yen forced the company to project its biggest loss in seven years. The job reductions, involving full- and part-time workers, will be completed by March 2010, Panasonic said yesterday. The Osaka-based company said it will have a 380 billion yen ($4.3 billion) net loss in the year ending March 31.

Panasonic plans to close 27 factories initially. More shutdowns are planned next fiscal year, bringing total closures to about 20 percent of Panasonic’s current 230 factories, Bloomberg quoted Panasonic Director Makoto Uenoyama as saying.

Alcatel-Lucent, the world’s largest supplier of fixed-line phone networks, posted an eighth straight quarterly loss as it wrote down the value of assets by 3.91 billion euros ($5.1 billion).

The net loss widened to 3.89 billion euros in the fourth quarter from 2.58 billion euros a year earlier, Paris-based Alcatel-Lucent said in a statement. The company had said in December it will cut 1 billion euros in costs in each of the next two years, including 1,000 managerial jobs.

Roche misses estimates
Meanwhile, Roche Holding’s second-half profit missed estimates, causing the Swiss drugmaker’s shares to record their worst drop in more than 11 years. Net income fell to 4.15 billion Swiss francs ($3.6 billion) in the second half from 4.8 billion francs a year earlier. Roche dipped as much as 9.7 percent in Zurich trading, the steepest decline since Oct. 28, 1997.

Electrolux, the world’s second-largest appliance maker, reported its biggest quarterly loss for six years and scrapped its dividend after demand for new vacuums and dishwashers plunged.

The net loss was 474 million kronor ($57 million), or 1.68 kronor a share, from a profit of 1.13 billion kronor, or 3.97 kronor, a year earlier, the Stockholm-based company said yesterday. Sales advanced 3.7 percent to 28.7 billion kronor.

Electrolux eliminated 4,000 jobs last year as consumers postponed appliance upgrades. Bigger rival Whirlpool said in October it would cut 5,000 jobs and forecast the global recession would last another two years.

BHP Billiton, the world’s largest mining company, reported first-half profit dropped 57 percent, more than analysts expected, on costs to close mines and plants after metal prices slumped.

Net income fell to $2.6 billion in the six months ended Dec. 31, the lowest since 2004, Melbourne-based BHP said yesterday. BHP booked $3.5 billion in one-time charges, including $2.7 billion for the mine closures.

Chief Executive Officer Marius Kloppers said slower demand for steel will have a "pronounced impact" and a weak outlook for the global economy will affect earnings this half. BHP has joined Xstrata and Rio Tinto in closing mines and cutting jobs as the recession curbs demand. Freeport-McMoRan Copper & Gold, the world’s largest publicly traded copper producer, last month posted a $13.9 billion fourth-quarter net loss after the plunge in prices.

Carmakers in bad shape
In another bleak development, Mazda Motor, the Japanese carmaker partially owned by Ford Motor and Mitsubishi Motors, forecast losses for this fiscal year.

Mazda expects a loss of 13 billion yen ($145 million) for the year ending in March and Mitsubishi predicted a loss of 60 billion yen, the companies said in separate statements yesterday.

The carmakers will both cut capital expenditure and jobs as they try to limit the damage from the worst U.S. car market in 27 years. The yen’s 23 percent rise against the dollar and 29 percent jump against the euro last year are also eroding the value of overseas earnings.

"The situation is getting worse and worse," Bloomberg quoted Yasuhiro Matsumoto, an analyst at Shinsei Securities, as saying. "They’re not going to make a profit next year either."

Car sales in Japan plunged the most in 35 years last month as the recession cut wages. Sales of cars, trucks and buses fell 28 percent. Japan is headed for its worst postwar recession as factory output slumped an unprecedented 9.6 percent in December and unemployment surged.

Reinsurance pains
Munich Re, the world’s biggest reinsurer, also said profit declined 62 percent last year following writedowns on investments.

Full-year net income before minority interests fell to 1.5 billion euros ($2 billion) from a record of 3.9 billion euros in 2007, the Munich-based reinsurer said yesterday. The company reiterated it will pay an unchanged dividend of 5.50 euros per share.

Munich Re shares have lost 6.5 percent since the beginning of the year, giving the company a market value of 21.4 billion euros.

Australia's national airline Qantas yesterday reported a 66 percent fall in first-half profits and denied that a plan to raise cash through a share issue was aimed at acquiring other airlines, Agence France-Presse reported.

Net profit for the six months to Dec. 31 fell to 210 million Australian dollars ($137 million), the airline said. Qantas also announced it would raise 500 million Australian dollars from an institutional placement and would allow other shareholders to subscribe for up to 10,000 dollars' worth of ordinary shares through a share purchase plan.