Europe’s economic woes are weighing on General Motors Co.’s profits. The company’s third-quarter net income fell 15 percent from a year earlier, dragged down by losses in Europe and South America and weak earnings in all areas except North America and China. The company’s shares fell 9 percent to $22.80 in morning trading Wednesday as GM said it would not be able to meet its target of breaking even in Europe this year. GM said that its net income fell to $1.7 billion in the quarter, or $1.03 per share, compared with $2 billion, or $1.20 per share, a year earlier. Still, it was the GM’s seventh-straight quarterly profit, and the lower numbers still beat Wall Street’s expectations. Analysts polled by FactSet predicted earnings of 94 cents per share.
Cisco showing turnaround signs
Cisco Systems, the world’s largest maker of computer networking gear, is showing signs of pulling a turnaround, exceeding analyst sales expectations for the second quarter in a row. The San Jose, Calif., company had net income of $1.8 billion, or 33 cents per share, in the fiscal first quarter, which ended in October. That compares with $1.9 billion, or 34 cents per share, a year ago. Excluding special items, earnings were 43 cents per share, 3 cents above the average projection of analyst polled by FactSet. Revenue grew nearly 5 percent from last year to $11.3 billion. That was about $230 million above analyst estimates. Cisco Systems Inc. has been slashing jobs and culling divisions to revive growth.
New Greek leaders secure debt deal
Greece’s outgoing Prime Minister George Papandreou said Wednesday that an agreement had been reached on an interim government that will secure the country’s new debt deal. The two main parties, Papandreou’s Socialists and the opposition conservatives, spent three days in intense power-sharing negotiations. “Today the main political forces are joining together, to guarantee to Greece’s citizens that in the following months we will do whatever is necessary not only to secure the country’s position in the euro and implement the (debt deal) decisions … but also to make use of its great benefits,” Papandreou said.
Local selections boost Macy’s sales
Macy’s Inc.’s net income surged in the third quarter as the department store chain benefited from tailoring its merchandise to local markets. The retailer also raised its full-year profit outlook Wednesday but shares fell 5 percent as its profit margins eroded because of its free shipping program. It also offered conservative guidance for the current quarter, which covers the holiday period. Macy’s earned $139 million, or 32 cents per share, for the three months ended Oct. 29. That compares with $10 million, or 2 cents per share, in the same period last year. Revenue rose 4.1 percent to $5.85 billion. Analysts had expected earnings of 16 cents per share, according to FactSet.
From Herald news services