April 25, 2024

A $4.6 Billion Profit for Freddie Mac

Freddie said it would pay a dividend of $7 billion to the Treasury Department next month and requested no additional federal aid for the fourth consecutive quarter.

The earnings from January through March compared with net income of $577 million in the first quarter of 2012.

The government rescued Freddie and its larger sibling Fannie Mae in 2008 during the financial crisis after both incurred huge losses on risky mortgages. The companies received loans totaling about $170 billion, the costliest bailout of the crisis. So far, the companies have repaid a combined $62.2 billion.

The companies are benefiting from a housing recovery that began a year ago. Record-low mortgage rates and slow but steady job growth have helped bring buyers back to the market. Home sales and construction have increased. And home prices are rising at the fastest pace in six years.

For Fannie and Freddie, a better housing market means fewer delinquent loans on their books. The improvement has also allowed the companies to charge mortgage lenders higher fees to guarantee the loans.

Under a federal policy adopted last summer, Fannie and Freddie must turn over any quarterly profits to the government.

Freddie earned $11 billion last year and paid $7.2 billion in dividends to the Treasury. It requested no government aid in the second, third and fourth quarters last year.

Fannie reported last month that it earned $17.2 billion last year and said it expected to stay profitable for “the foreseeable future.” It paid $11.6 billion in dividends to the Treasury in 2012. Last year was also Fannie’s first since its government takeover in which it asked for no federal aid.

Fannie and Freddie do not directly make loans. Rather, they buy mortgages from lenders, package them as bonds, guarantee them against default and sell them to investors.

Article source: http://www.nytimes.com/2013/05/09/business/a-4-6-billion-profit-for-freddie-mac.html?partner=rss&emc=rss

Archer Daniels Midland’s Quarterly Profits Exceed Expectations

The company, one of the world’s top grain traders, said it turned in a “mixed” performance in its fiscal first quarter as oilseeds were strong, margins shrank in its ethanol business and the agricultural services business faced the worst American drought in half a century.

There are signs that the scramble for grains after the drought may be aiding a recovery by Archer and its chief competitors from a period of dismal earnings, as companies with geographically diverse resources can acquire and deliver grain where it is needed.

The company, based in Illinois, reported net earnings of $182 million, or 28 cents a share, in its fiscal first quarter ending on Sept. 30, down from $460 million, or 68 cents a share, a year earlier.

Excluding one-time charges, Archer’s earnings were 45 cents a share, exceeding analysts’ average estimate of 35 cents, according to Thomson Reuters.

Profit rose in the oilseeds processing unit but fell in the corn processing unit, as negative ethanol margins more than offset improved results from sweeteners and starches.

Revenue was flat at $21.81 billion, but topped analysts’ average estimate of $20.04 billion.

Article source: http://www.nytimes.com/2012/10/31/business/archer-daniels-midlands-quarterly-profits-exceed-expectations.html?partner=rss&emc=rss

Profit Slides on Soft Sales, but Cisco Stays Upbeat

SAN FRANCISCO — Cisco Systems managed to encourage investors Wednesday despite sliding quarterly profits and flat revenue growth, prompting a nearly 7 percent run-up in its shares during after-hours trading.

John T. Chambers, chief executive of Cisco, who is trying to restructure and refocus the company after a year of stumbles attributed partly to slow decision-making, has said it would be some time before his efforts produced results.

Cisco has long been considered a bellwether for technology spending, but its internal problems have made it a less reliable stand-in for the broader technology industry. Cisco makes routers and switches used by corporations and government agencies to operate data centers and telecommunications networks.

But spending by the public sector, which makes up a fifth of Cisco’s overall sales, continues to decline. Spending by government agencies, public universities and hospitals fell 4 percent in its fourth quarter, the company said.

Mr. Chambers said, “You are seeing people making tough decisions about what to cut.”

Cisco reported that its net income in the fourth quarter that ended July 30 fell 36.3 percent to $1.2 billion, or 22 cents a share, from $1.9 billion, or 33 cents, in the same quarter a year ago.

The company said revenue climbed 3.3 percent to $11.2 billion, from $10.8 billion.

The adjusted income of 40 cents was slightly above the expectations of Wall Street analysts. They had expected 38 cents a share and revenue of $10.98 billion on that basis, according to a survey of analysts by Thomson Reuters.

The lack of more bad news was enough to buoy the company’s shares. Jason Ader, an analyst with William Blair Company, said that Cisco’s forecast for relatively flat revenue in the first quarter was good news given the convulsions in the stock market recently. It shows some confidence by Cisco in corporate technology spending even as public sector sales are weak.

“People have been looking for stability,” Mr. Ader said. “It was a much more positive call than it has been in a year.”

The gain in Cisco’s shares in after-hours trading on Wednesday made up only part of the more than 40 percent decline over the last 12 months. They rose 93 cents, or 6. 7 percent, to $14.66 in after-hours trading. In regular trading, they fell 33 cents, or 2.3 percent, to close at $13.73.

While Cisco struggled over the last year, smaller rivals like Juniper Networks performed relatively well. More recently, however, Juniper and Brocade Communications Systems, another maker of technology equipment, have warned of slumping demand for their products.

While Cisco’s main primary products faced headwinds, some of its other businesses have showed strong growth in recent quarters. They continued to do so in the fourth quarter with a 32 percent gain in revenue from data center products and 33 percent increase from wireless products.

Mr. Chambers is counting on these newer areas to lift the company as its more mature products retreat or make small gains.

Cisco, based in San Jose, Calif., said it expected operating of 38 cents a share to 41 cents a share in the first quarter, in line with analysts’ expectations.

Article source: http://feeds.nytimes.com/click.phdo?i=b206003007c905a021c854c3d7de08cc

PC Sales Off, Games Buoy Microsoft

While Microsoft reported Thursday that its fiscal third-quarter profits were up 31 percent, revenue from the division that includes the Windows operating system fell 4 percent, to $4.45 billion.

The fall was due in part to an overall decline in PC sales worldwide of about 3.2 percent. Analysts have blamed the earthquake and tsunami in Japan, a big market for computers, for part of that decline.

But the sales of tablet computers, like the iPad, were another major factor and that could become a persistent problem for Microsoft. The category of the tablet computer created by Apple and its iPad is expanding quickly. Apple has sold 19.5 million iPads, and all the big PC makers and cellphone makers are making tablets.

Most of the tablets on the market run either Apple’s operating system software or Google’s Android software. Manufacturers have shown little interest in using Microsoft Windows software to run a tablet.

Canalys, a technology market research firm, noted that when tablet computers are grouped with PCs, Apple becomes the fourth largest PC manufacturer in the world with almost 10 percent of the market. The three biggest PC makers, Hewlett-Packard, Acer and Dell, are all making tablets that don’t use Microsoft software.

One other indication of Microsoft’s changing stature: for the first time, Apple’s quarterly profits exceeded Microsoft’s — $5.99 billion compared with $5.23 billion. Last year, Apple surpassed Microsoft in market capitalization and in revenue.

“It’s a huge testament to Apple,” said Colin Gillis, an analyst with BGC Financial. “There is clearly some disruption in the PCs.” However, Mr. Gillis noted that Microsoft Windows 7 is the fastest-selling operating system in history. He thinks Microsoft will probably make a move into tablets later this year with its expected release of Windows 8. In any case, Mr. Gillis said, “PCs aren’t going to disappear.”

Microsoft also has found itself left behind in software for cellphones. It recently acted to ramp up its presence on mobile phones through an agreement with Nokia, the Finnish handset maker that is troubled, but still the largest makers of cellphones in the world. The two companies are working together on new mobile phones that would use Microsoft’s Windows Phone operating system.

Microsoft has seen declines in its operating software before, as recently as last year’s first fiscal quarter when it fell 4 percent.

To be sure, other parts of the company’s business remain strong and helped Microsoft report Thursday that net income in its third quarter rose 31 percent to $5.23 billion, or 61 cents a share, from $4 billion, or 45 cents a share, in the quarter a year ago. Revenue climbed 13 percent, to $16.43 billion, from $14.5 billion.

The company’s Office software, where it has no significant competition, grew 21 percent, to $5.25 billion. Office 2010 is the fastest-selling version of Office ever, Microsoft said, with businesses deploying the software at five times the rate of its predecessor.

However, revenue from Microsoft’s entertainment and devices, which includes the Xbox 360 video game console and the innovative Kinect game controller that interprets gestures and voice commands, gained 60 percent, to $1.94 billion. Kinect, a sensor that lets players interact with video games without having to hold a controller, did particularly well, selling 2.4 million units in the quarter. Customers bought 2.7 million Xbox 360s.

Microsoft blamed the economy for the lower revenue from Windows. Consumers are saving their money rather than buying new computers, said Peter Klein, Microsoft’s chief financial officer. Asked in an interview about the impact of tablets on computer sales, he acknowledged that “it’s part of the story.”

“There are a whole host of consumer purchases vying for the consumer wallet,” Mr. Klein said.

Sales of Windows for consumers PCs fell 8 percent in the quarter, Microsoft said. Windows for netbooks, the small laptops that had been big sellers until tablets came along, declined 40 percent, highlighting the rapid shift in computer buying habits.

Revenue from Microsoft’s online properties like the MSN portal and Bing search engine rose 14 percent, to $648 million. The unit lost $726 million in operating income, continuing a pattern of losses.

Two years ago, Microsoft signed an agreement to take over Yahoo’s search business to create a more formidable rival to Google. However, Yahoo’s chief executive, Carol A. Bartz, said last week that the partnership had not yielded the expected financial results for Yahoo and that technical glitches by Microsoft were to blame.

Downbeat reports about personal computer shipments in early 2011 had raised questions about Microsoft’s future dominance. Microsoft has developed an operating system for smartphones, but it is on relatively few phones. It does not have software that makers of tablet computers want. In after-hours trading, Microsoft’s shares lost 1.4 percent. They had ended regular trading at $26.71, up 33 cents, or 1.25 percent.

Article source: http://feeds.nytimes.com/click.phdo?i=543e055ff900f4b2e40efc65abd39f51