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ArcelorMittal Reports Quarterly Loss of $345 Million

May 10, 2013 by Leave a Comment

The loss contrasts with a $92 million profit in the similar period of 2012. Sales for the first quarter of 2013 were down 13 percent year on year, to $19.8 billion.

There were some signs that the company, which relies on demand from heavy industries like automobile manufacturing and construction, may be reaching the bottom of a several-year slide. While steel shipments in the first quarter were down about 6 percent year on year at 20.9 million metric tons, they rose almost 5 percent compared to the fourth quarter of 2012.

Similarly, while sales were down year on year in the first quarter, they were up a modest 2 percent from the last quarter of 2012.

Thomas O’Hara, an analyst at Citigroup, said that the company’s reported Ebitda, or earnings before interest, taxes, depreciation and amortization — the standard earnings measure in the steel industry — was “a clear beat” of analysts’ expectations by about $200 million.

But ArcelorMittal still looks like it has a long way to go before it returns to the high profitability it enjoyed before the onset of the global financial crisis.

“There is a glut of steel supply globally,” said Jeff Largey, an analyst at Macquarie in London. “That is going to prevent a company like ArcelorMittal from making the type of profits it did in its heyday.”

ArcelorMittal continues to whittle away at the heavy debt load it built up during an acquisition spree before the onset of the world financial crisis. The company, which is based in Luxembourg, cut its net debt by $3.8 billion to $18 billion in the quarter largely through a January offering of $4 billion in shares and convertible subordinated notes.

“We have significantly reduced our net debt and the steps we have taken to focus production on our more competitive assets are beginning to yield results,” Lakshmi N. Mittal, the company’s chairman and chief executive, said in a statement.

In Europe, where ArcelorMittal employs more than 90,000 people, the company managed to reduce its losses at the key unit that produces flat steel for auto makers and other customers. The unit posted a $59 million operating loss in the first quarter, compared to a loss of $283 million a year earlier and of $2.9 billion in the fourth quarter of 2012, when the company wrote down the value of some of its European businesses. A $210 million gain from selling carbon emissions credits helped limit the bleeding.

Steel production at the unit was up slightly from the previous year, but the average price per ton fell by 3 percent to $831. ArcelorMittal said it lost $9 per ton on average on the European flat steel unit.

Responding to weak demand, the company has closed operations in Europe, especially at Liège in Belgium and Florange in France, leading to tension with governments and unions. The French government last year threatened to nationalize the Florange site. ArcelorMittal said that although it was closing the blast furnaces at Florange, it has begun a new production line there for modern, lightweight automotive steel with the trademark Usibor.

Even in mining, where Mr. Mittal is focusing most of his investment these days, the results were not stellar. Operating income of $286 million was down 19 percent compared with the previous year, although it was up 54 percent compared with the last quarter of 2012.

Article source: http://www.nytimes.com/2013/05/11/business/global/11iht-arcelor11.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Sirius XM Reports Income and Subscriber Growth

April 30, 2013 by Leave a Comment

The company said revenue rose 12 percent, $897 million, from the period a year earlier, but came in lower than the $906 million analysts had predicted.

Net income increased 15 percent, to $124 million, while earnings before interest, tax, depreciation and amortization — adjusted to eliminate some charges including the effect of the 2008 merger between Sirius and XM — were $262 million, up 26 percent from the first quarter of 2012.

Sirius XM earned 2 cents a share, one cent less than analysts had predicted.

The company’s subscriber growth continued to be a bright spot, even after a rare price increase last year. It was the first time Sirius has ever raised the subscription rate; XM had done it once before. Sirius XM gained 453,000 subscribers in the quarter, bringing its total to 24.4 million. Over the last two years its subscriber ranks have grown 19 percent.

“Sirius XM’s first-quarter results show a continuation of our trend of strong, profitable growth,” Mr. Meyer said in a statement.

One concern for investors, however, is an uptick in the company’s “churn” rate, a measurement of its subscriber turnover. In recent years, that number had been gradually reduced to 1.9 percent, but in the most recent quarter it was back up to 2.0 percent.

Mr. Meyer, who had been Sirius’s president of sales and operations since 2004, was named interim chief executive in December after the departure of Mel Karmazin. He was appointed to the post permanently in a separate announcement on Tuesday by Gregory B. Maffei, who took over as the company’s chairman of the board on April 10.

Mr. Maffei is the president and chief executive of Liberty Media, which since 2009 had been Sirius XM’s largest investor and took over the company last year by acquiring a majority of its shares.

Article source: http://www.nytimes.com/2013/05/01/business/media/sirius-xm-reports-income-and-subscriber-growth.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Media Decoder Blog: CBS Reports Record Quarterly Operating Income for Fourth Quarter of 2012

February 14, 2013 by Leave a Comment

The CBS Corporation set records in the fourth quarter for operating income and adjusted operating income, the company said Thursday, but the results were short of some analysts’ expectations, causing its share price to fall slightly in after-hours trading.

The adjusted net earnings of $414 million produced earnings per share of 64 cents, also a new quarterly record for CBS, though some analysts had forecast a price as high as 69 cents.

CBS, which reported full-year results for 2012 as well as for the quarter ending Dec. 31, also announced an additional stock buyback of $1 billion. That brings the total amount of stock CBS has committed to repurchasing for the current year to $2.2 billion.

Overall, CBS demonstrated improved results in most financial categories and divisions. Revenues for the quarter rose to $3.7 billion, up 2 percent from $3.61 billion for the same quarter in 2011. Net earnings were

CBS cited increases in advertising revenue in the quarter, partly driven by political commercials in an election year. The CBS broadcast network continues to be the most watched in television and will likely beat all its competitors in the significant ratings categories for the current season.

The company also saw increases from subscription fees, driven by improvement in its cable networks. Showtime, the pay-cable channel owned by CBS, has experienced growth in subscriptions, thanks in part to its award-winning drama “Homeland.” CBS has pressed for years for increased compensation from cable systems for the rights to carry CBS broadcast stations, and Thursday the company reported that retransmission fees were also up for the quarter, part of 9 percent growth overall in affiliate and subscription fees.

Adjusted operating income before depreciation and amortization increased 6 percent, to $866 million from $814 million the year before. Operating income increased 12 percent to $726 million, up from $647 million.

For the full year CBS also produced some encouraging results. The company reported revenues of $14.09 billion, up 3 percent from $13.64 billion in 2011. Adjusted income increased to $3.49 billion from $3.16 billion. Operating income of $2.98 billion was up from $2.62 billion in 2011. All represented new highs for CBS.

One more troubling area was publishing. CBS’s Simon Schuster unit experienced a decrease in revenues, to $215 million from $229 million in 2011. CBS attributed the drop to decreasing print book sales that could not be offset by increasing e-book sales.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/14/cbs-reports-record-quarterly-operating-income-for-fourth-quarter-of-2012/?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Bucks Blog: A Simpler Form for Home Office Deductions

January 17, 2013 by Leave a Comment

If you work at a home-based business, the Internal Revenue Service has some (potentially) good news: It’s going to offer a simpler option for taking a tax deduction for home offices.

Before you get excited, though, the new option won’t be available for your 2012 return. It takes effect this year, for 2013 returns that are generally filed in early 2014.

Still, the agency says that it expects the new optional deduction, to be capped at $1,500, to greatly reduce the paperwork and record-keeping burden on small businesses. In the 2010 tax year, nearly 3.4 million taxpayers claimed deductions for “business use of a home,” as the home office deduction is formally known.

In a statement, the acting I.R.S. commissioner, Steven T. Miller, said the “common sense” rule aims to provide taxpayers an easier way to calculate and claim the home office deduction.

Currently, claiming the deduction means filling out the 43-line Form 8829, which often involves complex calculations of allocated expenses, depreciation and carryovers of unused deductions. Taxpayers claiming the new optional deduction will complete a “significantly simplified” form, the I.R.S. says.

Homeowners using the new option cannot depreciate the portion of their home used in a trade or business. But they can claim allowable mortgage interest, real estate taxes and insurance losses on the home as itemized deductions on Schedule A. These deductions don’t have to be allocated between personal and business use, as is required under the regular method, the I.R.S. said.

Mary Kay Foss, a certified public accountant in Danville, Calif., said many of her firm’s clients will welcome the simpler form when it’s available. A quick way to see if using the simple form will make sense, she said, is to multiply the square footage of your home office by $5 a square foot — the formula for the new deduction option. (If your office is 300 square feet, then your deduction would be $1,500, the maximum allowed.) If the result is more than you claimed for your home office on your most recent tax return, you can probably save yourself some time and use the simpler form. If you have higher expenses, though, you may still want to slog through the more detailed form.

Keep in mind that restrictions on the home office deduction still apply, including the requirement that the office must be used “regularly and exclusively” for business. So if your home “office” is a laptop that shares space with your food processor on your kitchen counter, taking the deduction is probably a stretch.

Business expenses unrelated to the home, like advertising, supplies and wages paid to employees, are still fully deductible.

More details on the new option can be found in Revenue Procedure 2013-13. And if you want to comment on the new option, you can, until April 15 of this year. Send an e-mail to: Notice.Comments@irscounsel.treas.gov, and include “Rev. Proc. 2013-13” in the subject line.

Does the idea of a simpler home office deduction appeal to you?

Article source: http://bucks.blogs.nytimes.com/2013/01/17/a-simpler-form-for-home-office-deductions/?partner=rss&emc=rss

Filed Under: Your Money Tagged With: , ,

Reuters Breakingviews: A Warner Merger With Potential

April 18, 2011 by Leave a Comment

The less glamorous music publishing side still sets the pace for any deal. This income stream from songs played on the radio or performed live has been steady for Warner, with the division’s operating profit before depreciation and amortization declining a mere 6 percent in the fiscal year that ended in September 2010, compared with the fiscal year in 2008. The recording side, which includes the Atlantic and Warner labels, has suffered far worse over the same span, with those earnings tumbling nearly a third.

Potential buyers like Ron Burkle and Len Blavatnik may have reason for optimism about the business of discovering and developing rock stars. The increasing use of smartphones and the development of cloud-based song libraries are creating fresh hopes of reinvigorating the legal distribution of music.

But everyone is mainly eager for a merger of Warner and EMI. The first attempt at a deal was in 2000, when European watchdogs shot down the idea. But the business has changed substantially and Warner’s next owner is likely to try uniting the company with the industry’s overleveraged No. 4 player seized earlier this year from Guy Hands, the buyout baron, by its lender, Citigroup.

Not only could the best executives and musical acts be cherry-picked from the two firms, but nearly the whole merged recording unit could be run with just one side’s cost base.

The last time these two tried a merger in 2006, annual savings were estimated at some $300 million. Assuming that still holds true, the estimated $2.3 billion present value of these savings would go a long way toward paying for any deal.

Warner and EMI are each worth roughly $3 billion. Selling one of the two publishing businesses to sidestep regulatory questions would probably fetch at least $2 billion. Despite the industry’s troubles, new investors could still enjoy a good return.

An Untapped Mine

 

Facebook’s success may seem sui generis. But the social network’s disputed paternity and escalating value — $85 billion at last estimate — is creating a familiar commotion. People are claiming a share of Mark Zuckerberg’s creation. The story bears striking parallels with past bonanzas, especially Nevada’s silver rush 150 years ago.

The Comstock Lode was the Silicon Valley of its day. The market value of companies excavating its wealth was about $40 million by 1865, about half the value of the real estate and personal property in San Francisco at the time. That would equate to about $60 billion in today’s economy. The system that sprang up around the mines included engineers developing new technologies to extract silver from stone. Hundreds of companies were formed. A few captured nearly all the spoils.

Just as today, the combination of uncertain ownership and tremendous lucre invited controversy. The mining company Gould Curry, for example, attracted 15 lawsuits in one year. Such legal claims consumed an estimated 20 percent of the revenue generated by the Comstock Lode in its early years of operation.

The outcomes resemble Facebook’s travails. Early and important figures — Eduardo Saverin at Facebook or James Finney at Comstock — were celebrated as genial figures, but pushed out for a fraction of the eventual riches. And like the Winklevoss twins suing Facebook today, others who claimed to own Comstock Lode land but who didn’t do any heavy lifting were given a chunk of cash and told to go away.

Outsiders can’t tell whether today’s claimants are victims or opportunists. The latest is Paul Ceglia, a wood-pellet salesman charged with fraud last year, who says he bought half of Facebook in 2003. Some mine owners of yore took money from investors before telling them a rich shaft was worthless. Other plaintiffs submitted fabricated evidence against wealthy miners.

The parallels do have their limits. Mr. Zuckerberg isn’t like Henry Comstock, for whom the lode was named. Mr. Comstock finagled his way in, using $50 and a blind horse. Mr. Zuckerberg actually built Facebook. That’s significant. An untapped mine with rich silver deposits is worth a fortune. An undeveloped social network is just a good idea. — JEFFREY GOLDFARB and ROBERT CYRAN

Article source: http://feeds.nytimes.com/click.phdo?i=799b80aa396b94ba5fe10b9c0ebf1ae4

Filed Under: Economy News Tagged With: , ,