Archive for July, 2009

29
Jul

Shedding Soviet Past, Russian Airline Turns West

By alfredlester Closed
Categories: business, economic, market, power and world
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MOSCOW — Aeroflot’s symbol is still the winged hammer and sickle, but otherwise, the former communist carrier has mostly shrugged off its Soviet past. The strongest evidence yet: By the end of the year, it will fly a fleet nearly entirely Made in the U.S.A. and Western Europe.

Aeroflot is selling all of its Tupolev jets, the workhorse passenger aircraft of the former East Bloc. Once they are gone, only six of about 100 jets in Aeroflot’s fleet will be Russian made. And those planes, Il-96’s, will fly within Russia and on select foreign flights, including the Moscow-Havana and Moscow-Hanoi routes.

That Aeroflot will fly almost exclusively Boeing and Airbus jets is a remarkable turn for a company that once owned virtually every civilian airplane in the Soviet Union. But the airline has tried to reinvent itself as a business carrier, and its passengers tend to prefer Western airplanes. While experts say Russian airplanes are well-constructed, poor maintenance and repairs brought them a bad reputation for safety after the Soviet collapse. And as any passenger will tell you, they are also more noisy and cramped. “I look at every bolt and every screw and wonder if any are loose, and I worry,” Anastasia A. Tkachova, a student flying to London on Aeroflot, said while awaiting a flight at Moscow’s Sheremetyevo Airport.

“It’s more comfortable to fly an Airbus,” another passenger, Mikhail A. Kotlyarov, said. But he was quick to add, with a touch of regret, “Russia will be left without its own airplanes.”

Not exactly. In fact, despite Aeroflot’s move, Russia’s domestic jet industry actually appears to be making an improbable comeback.

It was the Russian-made planes’ far greater fuel consumption that doomed it with Aeroflot, especially given the hard times in the industry worldwide. Aeroflot’s chief executive, Vitaly Savelyev, said the company is losing money on about 40 percent of its routes and that it will have to lay off about 6,000 workers in the coming two or three years, Vedemosti business newspaper reported Monday.

Over its history, of course, Aeroflot has had myriad problems. Horror stories abound, though statistically flying was as safe here as in the West until a series of recent crashes involving both Western- and Russian-made jets, accidents blamed mostly on pilot error.

Ms. Tkachova recalled one white-knuckled take-off when flight attendants posted in the isles, looking out the windows, periodically called out updates to the cockpit about ice forming on the wings.

Ms. Tkachova said she was so visibly disturbed that a flight attendant later gave her gum, to help her calm down.

Irina Danenberg, Aeroflot’s spokeswoman, said Aeroflot is selling its Tu-154 jets because they burn so much fuel compared to Western planes, not over safety concerns. The Soviet legacy is “completely irrelevant” today, Nikolai Kovarsky, a Moscow-based business consultant, said of Aeroflot payday loan. “They’re extremely friendly, extremely professional, the service is impeccable. And they’re Russian.”

Aeroflot now operates 26 Tu-154 jets that it is taking out of service and selling, in the process laying off cabin crews to help shed employees. The reshaping of its fleet is seen as a victory for the London Stock Exchange-listed company, which has struggled to shed its role as a source of subsidies for Russian airplane factories.

It is a trend in Russian aviation. For now, the Tu-154 and a smaller variant, the Tu-134, remain the most common passenger airplane in Russia with about 600 in service. Russian airlines have placed orders for about 100 of the Tupolev factory’s newer replacement, the Tu-204. But just as many Russian orders are outstanding for Boeing and Airbus airplanes, according to Airclaimes CIS, an aviation consultancy.

Russian aerospace is among the few competitive sectors of Russia’s economy outside petroleum. The absence of modern planes now is not, in fact, a reflection of the current state of the industry but the post-collapse crisis of the 1990s — the lead time is long on new plane designs. After a restructuring of aircraft manufacturers in 2005, a new crop of Russian planes is expected on the market through the next decade.

Aeroflot has placed orders for 30 new regional jets being built by Sukhoi in partnership with Boeing. And the Sukhoi superjet is also being marketed worldwide as a competitor to regional jets made by Bombardier of Canada and Embraer of Brazil.

The Il-96, the last Russian model in Aeroflot’s fleet, still serves as the Russian presidential jet, though its reputation was damaged in 2005 when then President Vladimir V. Putin had to take a backup airplane home from a trip to Finland because the Ilyushin’s brakes had malfunctioned. The president of Ilyushin was fired after the incident.

Worldwide, only 14 Il-96s are operating, including a model made for Cuba with a flex cabin that converts from passenger seating for Cubana de Avaiacion to a VIP layout for presidential trips.

Because Cuba retains ground crews trained to service the plane, the Il-96s can more cheaply be flown between Moscow and Havana than to European or United States airports, according to Boris Bychkov, the general director of the Moscow office of Airclaimes, the aviation consultancy.

Meanwhile, the disappearance of the Tupolev’s from Aeroflot’s fleet, he said, should not be seen as a “blow to the image” of Russian plane makers. “We still have excellent fighter jets.”

Shedding Soviet Past, Russian Airline Turns West

Hot News: Dow and S&P dip, but Nasdaq up with biotechs

27
Jul

Driven to Distraction: Texting Raises Crash Risk 23 Times, Study Finds

By alfredlester Closed
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The first study of drivers texting inside their vehicles shows that the risk sharply exceeds previous estimates based on laboratory research — and far surpasses the dangers of other driving distractions.

The new study, which entailed outfitting the cabs of long-haul trucks with video cameras over 18 months, found that when the drivers texted, their collision risk was 23 times greater than when not texting.

The Virginia Tech Transportation Institute, which compiled the research and plans to release its findings on Tuesday, also measured the time drivers take their eyes from the road to send or receive texts.

In the moments before a crash or near crash, drivers typically spent nearly five seconds looking at their devices — enough time at typical highway speeds to cover more than the length of a football field.

The researchers said that even though trucks take longer to stop and are less maneuverable than cars, the findings generally applied to all drivers, who tend to exhibit the same behaviors as the more than 100 truckers studied. Truckers, they said, do not appear to text more or less than typical car drivers, but they said the study did not compare use patterns that way.

Compared with other sources of driver distraction, “texting is in its own universe of risk,” said Rich Hanowski, who oversaw the study at the institute, which is affiliated with Virginia Tech University.

Mr. Hanowski said the texting analysis was financed by $300,000 from the Federal Motor Carrier Safety Administration, which has the mission of improving safety in trucks and buses. More broadly, the two studies yielding the results represent a significant logistical undertaking. The cost was $6 million to equip the trucks with video cameras and track them for three million miles as they hauled furniture, frozen foods and other goods across the country.

The final analysis of the data is undergoing peer review before formal publication .

Tom Dingus, director of the Virginia Tech institute, one of the world’s largest vehicle safety research organizations, said the study’s message was clear.

“You should never do this,” he said of texting while driving. “It should be illegal.”

Thirty-six states do not ban texting while driving; 14 do, including Alaska, California, Louisiana and New Jersey. New York legislators have sent a bill to Gov. David A. Paterson. But legislators in other states have rejected such rules, and some elected officials say they need more data to determine whether to ban the activity.

One difficulty in measuring crashes caused by texting drivers — and by drivers talking on phones — is that many police agencies do not collect this data or have not compiled long-term studies. Texting also is a relatively new phenomenon.

The issue has drawn attention after several recent highly publicized crashes caused by texting drivers, including an incident in May involving a trolley car driver in Boston who crashed while texting his girlfriend.

Over all, texting has soared. In December, phone users in the United States sent 110 billion messages, a tenfold increase in just three years, according to the cellular phone industry’s trade group, CTIA.

The results of the Virginia Tech study are buttressed by new laboratory research from the University of Utah. In a study over the last 18 months, college students using a sophisticated driving simulator showed an eight times greater crash risk when texting than when not texting.

That study, which is undergoing peer review and has been submitted for publication in The Journal for Human Factors, also found that drivers took their eyes off the road for around five seconds when texting payday loans in one hour.

David Strayer, a professor who co-wrote the University of Utah report, offered two explanations for the simulator’s showing lower risks than the Virginia study. Trucks are tougher to maneuver and stop, he noted, and the college students in his study might be somewhat better at multitasking.

But the differences in the studies are not the point, Mr. Strayer said. “You’re off the charts in both cases,” he added. “It’s crazy to be doing it.”

At Virginia Tech, researchers said they focused on texting among truckers simply because the trucking study was relatively new and thus better reflected the explosive growth of texting. But another new study from the organization is focusing on texting among so-called light-vehicle drivers, specifically teenagers.

Preliminary results from that study show risk levels for texters roughly comparable to those of the truck drivers. The formal results of the light-vehicle study should be available later this year. By comparison, several field and laboratory studies show that drivers talking on cellphones are four times more likely to cause a crash than other drivers. And a previous Virginia Institute study videotaping car drivers found that they were three times more likely to crash or come close to a crash when dialing a phone and 1.3 times more likely when talking on it.

Researchers focused on distracted driving disagree about whether to place greater value on the results of such a so-called naturalistic study or laboratory studies, which allow the scientists to recreate conditions and measure individual drivers against themselves.

But, in the case of texting, laboratory and real-world researchers say the results are significant — from both scientific methodologies, texting represents a much greater risk to drivers than other distractions.

A new poll shows that many drivers know the risks of texting while driving — and do it anyway. The AAA Foundation for Traffic Safety plans on Tuesday to publish polling data that show that 87 percent of people consider drivers texting or e-mailing to pose a “very serious” safety threat (roughly equal to the 90 percent who consider drunken drivers a threat).

Of the 2,501 drivers surveyed this spring, 95 percent said that texting was unacceptable behavior. Yet 21 percent of drivers said they had recently texted or e-mailed while driving.

About half of drivers 16 to 24 said they had texted while driving, compared with 22 percent of drivers 35 to 44.

“It’s convenient,” said Robert Smith, 22, a recent college graduate in Windham, Me., who says he regularly texts and drives even though he recognizes that it is a serious risk. He would rather text, he said, than take time on a phone call.

“I put the phone on top of the steering wheel and text with both thumbs,” he said, noting he often has exchanges of 10 messages or more. Sometimes, “I’ll look up and realize there’s a car sitting there and swerve around it.”

Mr. Smith, who was not part of the AAA survey, said he was surprised by the findings in the new research about texting.

“I’m pretty sure that someday it’s going to come back to bite me,” he said of his behavior.

Driven to Distraction: Texting Raises Crash Risk 23 Times, Study Finds

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27
Jul

Verizon profit falls but revenue rises

By alfredlester Closed
Categories: business, economic, life, money and news
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NEW YORK (Reuters) – Verizon Communications (VZ.N) posted a smaller quarterly profit on Monday but revenue rose due to wireless subscriber growth and its purchase earlier this year of rural wireless operator Alltel.

Its profit fell to $3.16 billion, or 52 cents per share, compared with a profit of $3.4 billion, or 66 cents a share, in the same quarter a year earlier.

Revenue rose to $26.86 billion from $24.1 billion and compared with analysts' average estimate of $26.846 billion, according to Reuters Estimates best payday advance.

On Friday Verizon, the biggest U.S. mobile service, said it added 1.1 million wireless subscribers in the quarter. Its biggest rival AT&T Inc (T.N) said last week that it added 1.4 million net new customers.

Share were flat at $31.50 in premarket trading after an early 1.3-percent rally.

(Reporting by Sinead Carew; Editing by Derek Caney)

Verizon profit falls but revenue rises

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27
Jul

Ericsson Bid Wins Nortel Wireless Unit

By alfredlester Closed
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OTTAWA — Nortel Networks, the bankrupt Canadian maker of telecommunications equipment, said over the weekend that Ericsson of Sweden had won an auction of its wireless technologies unit with an offer of $1.13 billion, thwarting a bid by a rival, Nokia Siemens Networks.

Last month, Nortel signed a deal to sell the division, which is profitable, to Nokia Siemens for $650 million. A bank owned by the Canadian government also agreed to provide $300 million in financing for the deal. But other companies were invited to submit bids to a court overseeing Nortel’s restructuring in bankruptcy.

The final days of the auction had produced considerable controversy in Canada, where the sale was front-page news. The maker of the BlackBerry, Research In Motion, which replaced Nortel as the leading Canadian technology company, said last week that it had been unfairly shut out of the bidding. R.I.M. said it had been prepared to offer about $1.1 billion.

MatlinPatterson Global Advisors, a private equity firm and Nortel creditor based in New York, also condemned the apparent piecemeal liquidation of Nortel and entered a bid in an attempt to keep the company intact fast cash advance. That breakup accelerated last week when Nortel announced a deal to sell a division that makes communications systems for governments and large corporations to Avaya for $475 million.

After R.I.M. called on the Canadian government to investigate the sale of what was widely seen as Nortel’s most valuable operation, some Canadians argued that because Nortel had benefited extensively from government assistance, those assets should remain under Canadian control.

It was not clear whether enough of the wireless unit’s assets remained in Canada to prompt a mandatory review of the sale under Canada’s foreign investment laws. The Canadian government, citing privacy laws, does not comment on that process. The sale is subject to approval by courts in Canada and the United States.

Ericsson will rename the Nortel operation Ericsson CDMA. It said it would offer jobs to at least 2,500 of its workers, about a third of whom are based in Canada.

Ericsson Bid Wins Nortel Wireless Unit

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25
Jul

Scientists Worry Machines May Outsmart Man

By alfredlester Closed
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A robot that can open doors and find electrical outlets to recharge itself. Computer viruses that no one can stop. Predator drones, which, though still controlled remotely by humans, come close to a machine that can kill autonomously.

Impressed and alarmed by advances in artificial intelligence, a group of computer scientists is debating whether there should be limits on research that might lead to loss of human control over computer-based systems that carry a growing share of society’s workload, from waging war to chatting with customers on the phone.

Their concern is that further advances could create profound social disruptions and even have dangerous consequences.

As examples, the scientists pointed to a number of technologies as diverse as experimental medical systems that interact with patients to simulate empathy, and computer worms and viruses that defy extermination and could thus be said to have reached a “cockroach” stage of machine intelligence.

While the computer scientists agreed that we are a long way from Hal, the computer that took over the spaceship in “2001: A Space Odyssey,” they said there was legitimate concern that technological progress would transform the work force by destroying a widening range of jobs, as well as force humans to learn to live with machines that increasingly copy human behaviors.

The researchers — leading computer scientists, artificial intelligence researchers and roboticists who met at the Asilomar Conference Grounds on Monterey Bay in California — generally discounted the possibility of highly centralized superintelligences and the idea that intelligence might spring spontaneously from the Internet. But they agreed that robots that can kill autonomously are either already here or will be soon.

They focused particular attention on the specter that criminals could exploit artificial intelligence systems as soon as they were developed. What could a criminal do with a speech synthesis system that could masquerade as a human being? What happens if artificial intelligence technology is used to mine personal information from smart phones?

The researchers also discussed possible threats to human jobs, like self-driving cars, software-based personal assistants and service robots in the home. Just last month, a service robot developed by Willow Garage in Silicon Valley proved it could navigate the real world.

A report from the conference, which took place in private on Feb. 25, is to be issued later this year. Some attendees discussed the meeting for the first time with other scientists this month and in interviews.

The conference was organized by the Association for the Advancement of Artificial Intelligence, and in choosing Asilomar for the discussions, the group purposefully evoked a landmark event in the history of science. In 1975, the world’s leading biologists also met at Asilomar to discuss the new ability to reshape life by swapping genetic material among organisms. Concerned about possible biohazards and ethical questions, scientists had halted certain experiments. The conference led to guidelines for recombinant DNA research, enabling experimentation to continue.

The meeting on the future of artificial intelligence was organized by Eric Horvitz, a Microsoft researcher who is now president of the association.

Dr. Horvitz said he believed computer scientists must respond to the notions of superintelligent machines and artificial intelligence systems run amok.

The idea of an “intelligence explosion” in which smart machines would design even more intelligent machines was proposed by the mathematician I. J. Good in 1965. Later, in lectures and science fiction novels, the computer scientist Vernor Vinge popularized the notion of a moment when humans will create smarter-than-human machines, causing such rapid change that the “human era will be ended quick cash.” He called this shift the Singularity.

This vision, embraced in movies and literature, is seen as plausible and unnerving by some scientists like William Joy, co-founder of Sun Microsystems. Other technologists, notably Raymond Kurzweil, have extolled the coming of ultrasmart machines, saying they will offer huge advances in life extension and wealth creation.

“Something new has taken place in the past five to eight years,” Dr. Horvitz said. “Technologists are replacing religion, and their ideas are resonating in some ways with the same idea of the Rapture.”

The Kurzweil version of technological utopia has captured imaginations in Silicon Valley. This summer an organization called the Singularity University began offering courses to prepare a “cadre” to shape the advances and help society cope with the ramifications.

“My sense was that sooner or later we would have to make some sort of statement or assessment, given the rising voice of the technorati and people very concerned about the rise of intelligent machines,” Dr. Horvitz said.

The A.A.A.I. report will try to assess the possibility of “the loss of human control of computer-based intelligences.” It will also grapple, Dr. Horvitz said, with socioeconomic, legal and ethical issues, as well as probable changes in human-computer relationships. How would it be, for example, to relate to a machine that is as intelligent as your spouse?

Dr. Horvitz said the panel was looking for ways to guide research so that technology improved society rather than moved it toward a technological catastrophe. Some research might, for instance, be conducted in a high-security laboratory.

The meeting on artificial intelligence could be pivotal to the future of the field. Paul Berg, who was the organizer of the 1975 Asilomar meeting and received a Nobel Prize for chemistry in 1980, said it was important for scientific communities to engage the public before alarm and opposition becomes unshakable.

“If you wait too long and the sides become entrenched like with G.M.O.,” he said, referring to genetically modified foods, “then it is very difficult. It’s too complex, and people talk right past each other.”

Tom Mitchell, a professor of artificial intelligence and machine learning at Carnegie Mellon University, said the February meeting had changed his thinking. “I went in very optimistic about the future of A.I. and thinking that Bill Joy and Ray Kurzweil were far off in their predictions,” he said. But, he added, “The meeting made me want to be more outspoken about these issues and in particularly be outspoken about the vast amounts of data collected about our personal lives.”

Despite his concerns, Dr. Horvitz said he was hopeful that artificial intelligence research would benefit humans, and perhaps even compensate for human failings. He recently demonstrated a voice-based system that he designed to ask patients about their symptoms and to respond with empathy. When a mother said her child was having diarrhea, the face on the screen said, “Oh no, sorry to hear that.”

A physician told him afterward that it was wonderful that the system responded to human emotion. “That’s a great idea,” Dr. Horvitz said he was told. “I have no time for that.”

Ken Conley/Willow Garage

Scientists Worry Machines May Outsmart Man

Hot News: European stocks pull back at open

25
Jul

Ericsson wins auction for Nortels wireless assets

By alfredlester Closed
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TORONTO (Reuters) – Sweden's Ericsson has won an auction for the wireless assets of bankrupt Nortel Networks Corp in a deal valued at $1.13 billion, Nortel said on Saturday.

The proposed sale, announced by Nortel in a news release, means Ericsson will own the Canadian company's key CDMA and next-generation LTE wireless technologies, which it put on the block after filing for creditor protection in January.

Nortel said Ericsson will offer continued employment to a minimum of 2,500 Nortel employees. The statement did not say how many employees worked for the Nortel businesses that the company agreed to sell, and a spokesman was not immediately available for further comment.

Last month, Nortel announced a "stalking horse" bid for the assets from Nokia Siemens Networks for $650 million, setting a floor price for potential buyers.

BlackBerry maker Research In Motion also waded into the fray by announcing it was chasing a deal for the Nortel technology. But it complained that Nortel had effectively blocked an approach valued at $1.1 billion.

Nortel fired back by saying RIM was refusing to comply with common confidentiality provisions that other bidders had agreed to follow.

Toronto-based Nortel, once North America's biggest maker of telephone gear, filed for bankruptcy protection early this year, blaming the economic crisis for derailing a turnaround effort that began in 2005.

Even before the economy hit the skids, Nortel had posted billions in losses and was forced to cut tens of thousands of jobs in hopes of reversing its moribund fortunes payday loan.

However, these measures were not enough to offset a plunge in demand for its products from corporate clients and from wireless carriers that use its technology to operate their networks.

Rivals like Alcatel and Lucent consolidated as Nortel sat on the sidelines, while Asian competitors captured market share with their lower-cost offerings.

Nortel now employs roughly 25,000 people, down from 90,000 at the height of the technology boom at the start of the decade.

Nortel now appears sure to sell itself in pieces rather than restructure under creditor protection to emerge as a scaled-down version of its former self.

The company was once the poster child in Canada for high tech success and was the most heavily weighted stock on the Toronto Stock Exchange. Its shares on a consolidation-adjusted basis were worth more than C$1,100 each in mid-2000.

Today, the stock has been delisted from the major exchanges and are changing hands at less than 10 Canadian cents each.

The proposed sale is subject to joint of approval of U.S. and Canadian courts, scheduled for July 28.

(Reporting by Frank McGurty; Editing by Will Dunham)

Ericsson wins auction for Nortel’s wireless assets

Hot News: California lawmakers approve budget plan after marathon session

25
Jul

Senator Wants Limits on High-Speed Trading

By alfredlester Closed
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A high-ranking lawmaker has asked the Securities and Exchange Commission to prohibit a trading technique that enables some large banks and hedge funds to peek at investors’ stock orders before they are sent to the broader marketplace.

The technique, known generally as “flash orders,” gives high-frequency traders using lightening-fast computers an unfair advantage, Senator Charles Schumer, the New York Democrat who is chairman of the Senate Rules and Administration Committee, said a letter to the S.E.C. Senator Schumer wrote that he intends to introduce legislation barring the technique, if the agency fails to act.

“The hallmark of our markets are that they are open and above board and the little guy has as much of a chance as the big guy,” Senator Schumer said in an interview. “This takes a dagger to the heart of that concept.”

The S.E.C. declined to comment on Senator Schumer’s letter, though some officials acknowledged they are investigating the technique and expect new regulations to be issued by this fall.

When buy or sell orders are submitted to marketplaces like Nasdaq, they are sometimes “flashed” to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — before they are routed to everyone else. In that half-second, fast moving computer software can gain valuable insights regarding growing or declining demand in certain stocks, and can trade ahead of other market participants, pushing prices up or down.

Although anyone can gain access to flash orders by paying a fee, they are only useful to traders who have computers powerful enough to move within milliseconds. In recent years, some of the largest financial companies, including Goldman Sachs, have earned enormous profits with such computers, which are very expensive and often housed right next to the machines that power the marketplaces themselves loans until payday.

While markets are supposed to ensure transparency by showing orders to everyone simultaneously, flash orders are currently allowed because of a loophole in securities regulations that allows for immediate trades.

“I’m against anything that advantages anybody over the rest of the market, and this clearly does, even though its momentary,” said Arthur Leavitt, who headed the Securities and Exchange Commission from 1993 to 2001, and today works as an adviser to Goldman Sachs and Getco, one of the largest high-frequency trading firms.

The exchanges that offer flash orders — Nasdaq, Direct Edge and BATS — all declined to comment on Senator Schumer’s letter. In the past, Nasdaq has defended flash orders. A company spokesman, Wayne Lee, wrote that the market’s “hope is that by having the ability to FLASH participants, this functionality will make our customers more competitive.”

This debate comes amid growing concern over high-frequency trading, which has helped push the average daily volume on the nation’s stock exchanges up by 164 percent since 2005. Although precise figures are elusive, stock exchanges say that a handful of high-frequency traders now account for a more than half of all trades, and collected about $21 billion in profits last year, according to the research firm the Tabb Group.

Senator Wants Limits on High-Speed Trading

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24
Jul

Wall St opens lower

By alfredlester Closed
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NEW YORK (Reuters) – Stocks opened lower on Friday as disappointing results from Microsoft Corp (MSFT.O) and American Express Co (AXP.N) curbed sentiment a day after a rally took the Dow industrials (.DJI) above the key 9,000 mark.

The Dow Jones industrial average dropped 35.00 points, or 0.39 percent, to 9,034.29. The Standard & Poor's 500 Index ( no teletrack payday loans.SPX) shed 5.61 points, or 0.57 percent, to 970.68. The Nasdaq Composite Index (.IXIC) slid 28.29 points, or 1.43 percent, to 1,945.31.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

Wall St opens lower

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24
Jul

Sales of Flu Drug Improve Results at Roche

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Sales of the drug Tamiflu have skyrocketed since the outbreak of swine flu in April, bolstering the profits of the drug’s maker, Roche.

Roche, based in Switzerland, said Thursday that sales of Tamiflu in the first half of 2009 tripled to 1 billion Swiss francs ($931 million), spurred by retail sales and the stockpiling of the drug by governments and corporations.

For the second quarter alone, Tamiflu sales reached 609 million francs ($567 million), more than 12 times the level of the second quarter of 2008. The second quarter, from April to June, is not usually a heavy season for flu.

Despite the increase in orders, Roche is still able to meet demand for the drug, Severin Schwan, the company’s chief executive, said in an interview Thursday. Orders received now could be delivered by the end of the year, he said.

Still, Mr. Schwan said that Roche, in cooperation with outside contractors, would increase its manufacturing capacity to 400 million packs a year by the beginning of 2010, about four times the current capacity.

He said that should be an ample volume, given that the company sold a total of only 300 million packs during the last five years — a period that encompassed a bird flu scare as well as the current swine flu outbreak.

Other pharmaceutical and vaccine manufacturers are also experiencing increased sales and profits because of the outbreak of swine flu, known as H1N1, which the World Health Organization has declared the first flu pandemic in about 40 years.

On Wednesday, GlaxoSmithKline said it expected a significant contribution to its profits this year from both its swine flu vaccine and from Relenza, an antiviral medicine that competes with Tamiflu. Glaxo said it planned to triple its manufacturing capacity for Relenza by the end of the year to 190 million treatments annually no fax cash advances.

Health authorities have said that both Tamiflu and Relenza can prevent the swine flu or reduce its severity, though there have been a few cases of people infected with a version of the virus resistant to Tamiflu.

Tamiflu, which is a pill, is used more often than Relenza, which is inhaled.

Roche said it expected sales of Tamiflu for 2009 as a whole to triple to 2 billion francs ($1.86 billion). The increased sales mean higher royalty payments for Gilead Sciences, a California biotechnology company that invented the drug and licensed it to Roche.

Over all, Roche reported a 9 percent increase in sales to 24 billion Swiss francs ($22.3 billion). Net income declined 29 percent because of special charges related to the company’s acquisition in March of Genentech, the biotechnology company. But Roche’s operating profit, which excludes those charges, rose 13 percent.

Mr. Schwan said the integration of Roche and Genentech was going smoothly. “We have made enormous progress within a very short time,” he said.

Roche is retaining Genentech’s research operation, known as one of the strongest in the pharmaceutical industry, as a separate unit to try to preserve its culture and track record for innovation. Mr. Schwan said that so far, not one scientist had left Genentech since the acquisition.

But there have been departures and layoffs in other areas, like clinical trial planning and oversight, and manufacturing.

Sales of Flu Drug Improve Results at Roche

Hot News: U.P.S. Profit Declines 49%, to $445 Million

23
Jul

Kimberly-Clark Profit Declines 3 Percent

By alfredlester Closed
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Filed at 12:36 p.m. ET

DALLAS (AP) — Kimberly-Clark Corp. said Thursday its profit slipped 3 percent in the second quarter, but the maker of Huggies diapers and Kleenex tissue lifted its 2009 outlook because it expects a smaller hit from the strong dollar.

Investors were cheered by the outlook and sent shares of Kimberly-Clark up $2.75, or 5.1 percent, to $57.21 in afternoon trading.

Higher prices for its products as well as lower energy and commodity costs helped drive earnings above expectations.

”If you look in the U.S. in particular, starting in the personal care categories, particularly in diapers, which is where most of the pricing action typically happens, it looks like the price increases that we’ve taken that others have followed are mostly holding,” Falk said on a conference call with analysts.

Kimberly-Clark earned $403 million, or 97 cents per share, down from $417 million, or 99 cents per share, a year ago. Currency weighed down earnings by about 25 cents per share.

Revenue declined nearly 6 percent to $4.73 billion from $5 billion a year ago, with sales of consumer tissue products slipping 8 percent.

Selling prices rose about 6 percent in its personal care products unit, but sales still declined 2 percent.

Analysts expected earnings of 94 cents per share and revenue of $4.62 billion.

Chief Executive Thomas J. Falk said stronger gross margin, higher prices and lower costs helped offset a drag from currency and higher pension expenses bad credit payday loans.

Edward Jones analyst Jack Russo said the company shouldn’t have to raise prices following last year’s hike because commodity costs aren’t as high. ”It was a good quarter. The company is certainly seeing the benefit of lower commodity costs,” he said.

Still, Russo said private label products have emerged as competitors because consumers are watching what they spend money on and are trading down to cheaper products.

Looking ahead, Dallas-based Kimberly-Clark raised its profit and sales outlook for 2009 because of favorable currency rates and cost savings.

The company expects earnings between $4.10 and $4.25 per share, up from a prior projection of earnings between $4 and $4.20. This includes a 15-cent charge to streamline operations. Last month, Kimberly-Clark revealed plans to cut 1,600 jobs, or 3 percent of its global work force.

Revenue will decline between 4 percent and 6 percent, better than previous guidance of a decline between 6 percent and 8 percent. Based on year-ago sales of $19.42 billion, that implies sales between $18.26 billion and $18.64 billion.

Analysts expect profit of $4.12 and sales of $18.5 billion for the year.

Kimberly-Clark Profit Declines 3 Percent

Hot News: Porsche Chief Fired; Prelude to Takeover by Volkswagen

23
Jul

Porsche Says Its C.E.O. Is Stepping Down

By alfredlester Closed
Categories: blog, economic, money, online and power
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Filed at 2:09 a.m. ET

STUTTGART, Germany (AP) — The supervisory board of Porsche Automobil Holding SE (OOTC:POAHF) said Thursday it has voted to accept the resignation of CEO Wendelin Wiedeking with immediate effect.

The statement came after an all-night meeting on the future of the company where the board agreed to seek a capital increase of at least euro5 billion ($7.1 billion), and threw its weight behind talks with a Qatar investment fund, according to a spokesman.

Wiedeking is to be replaced by Michael Macht, the management board member responsible for production, while personnel chief Thomas Edig will serve as his deputy, the board said. Holger Haerter, who was responsible for finances, also resigned, it said.

“Wiedeking and Haerter came to the conclusion in the last week that the further strategic development of Porsche SE and Porsche AG would be better when they were no longer the responsible people on the board,” the statement said.

Both Wiedeking and Haerter have agreed to remain available for consultation, the board said.

It gave no further details, and said nothing about possible buy-out packages.

The talks with Qatar have been ongoing, and Bamler said the supervisory board agreed to give the go-ahead for Porsche to sign a deal with a Qatar fund, with which negotiations have been ongoing, spokesman Albrecht Bamler said. He refused further details, and would not say whether the euro5 billion capital increase would come from Qatar, or if it was in addition to what was being sought from the fund creditreport.

Rumors have been swirling about a possible takeover by Volkswagen AG, and the board of Volkswagen also planned a separate meeting later Thursday.

At stake is who will control what would be Germany’s most powerful automaker — Volkswagen or Porsche.

Wiedeking, 56, joined Porsche in 1983, working in the car maker’s production and materials management unit and left the company in 1988 for supplier Glyco Metall-Werke KG where he rose to chief executive in 1990. The next year, he returned to Porsche as production director and became CEO in 1993.

Under his leadership, Porsche built up a 51 percent stake of VW, Europe’s biggest automaker, but said in the recent past it wanted to acquire 75 percent, though that it wouldn’t be able to do so in the near future because of the state of the economy, car markets and presumably Porsche’s debt load.

Porsche is now grappling with some euro9 billion ($12.77 billion) in debt it accumulated while building up its Volkswagen stake.

Volkswagen AG, Europe’s biggest car maker by sales, is chaired by Ferdinand Piech, the co-owner of Porsche SE. In a reversal of fortune, it is now proposing a deal that would see it take around a 49 percent of Porsche and fold the lucrative luxury-car business into its portfolio, widening its range as signs point to a renewal in the luxury market.

Porsche Says Its C.E.O. Is Stepping Down

Hot News: Chrysler says dealer legislation could force liquidation

22
Jul

Delta Narrows Second-Quarter Loss to $257 Million

By alfredlester Closed
Categories: Free blog Tips, all, blog, news and world
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Filed at 7:37 a.m. ET

ATLANTA (AP) — Delta Air Lines (NYSE:DAL) Inc., the world’s biggest airline operator, said Wednesday it narrowed its second-quarter net loss to $257 million.

The results reported by the Atlanta-based company for the April-June quarter were equivalent to 31 cents a share, compared to a loss of $1.04 billion, or $2.64 a share, a year earlier.

Excluding merger-related expenses, Delta would have lost $199 million, or 24 cents a share. The airline said it would have posted a profit of $191 million if it were to also exclude $390 million in fuel hedge losses.

Revenue in the quarter rose 27 percent to $7 billion, compared to $5.5 billion a year earlier before Delta completed its acquisition of Northwest Airlines. On a combined basis, total operating revenue declined 23 percent and total unit revenue declined 17 percent.

Analysts surveyed by Thomson Reuters (NYSE:TRI) (TSX:TRI) , who generally exclude one-time items from their estimates, expected a loss of 29 cents a share on revenue of $6.94 billion.

In the quarter, consolidated unit costs, excluding fuel and special items, were up 2 percent as system capacity declined 7 percent paydayloans.com.

“The industry faces substantial challenges from unprecedented revenue declines and volatile fuel prices, but Delta is the best positioned network carrier to weather these economic conditions,” Chief Executive Richard Anderson said in a statement.

As of June 30, Delta had $5.4 billion in unrestricted liquidity, including $4.9 billion in cash, cash equivalents and short-term investments and $500 million available under an undrawn line of credit.

For the first half of the year, Delta lost $1.05 billion, or $1.27 a share, compared to a loss of $7.43 billion, or $18.79 a share, a year earlier. Six-month revenue rose to $13.68 billion, compared to $10.27 billion a year earlier. Delta acquired Northwest in October, during the fourth quarter of last year.

Delta Narrows Second-Quarter Loss to $257 Million

Hot News: German Opel states still prefer Magna bid: sources

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