December 22, 2024

AT&T Fourth-Quarter Earnings Hurt by Pensions and Storm

Over the holiday season, ATT sold a record number of smartphones. But its quarterly earnings took a hit from pension costs and Hurricane Sandy.

Despite the setbacks, ATT’s business had a strong fourth quarter. It sold more smartphones than its main competitor, Verizon Wireless. It also added many new contract subscribers and increased the revenue that it gets from mobile data, the fees that people pay to use the Internet on its network.

“We had an excellent 2012,” said Randall Stephenson, ATT’s chief executive, in a statement. “Looking ahead,” he added, “our key growth platforms — mobile data, U-verse and strategic business services — all have good momentum with a lot of headroom.”

On Thursday, ATT reported a loss in the fourth quarter of $3.9 billion, or 68 cents a share, up from a loss of $6.7 billion, or $1.12 a share, from the same quarter a year earlier.

The company said revenue was essentially flat at $32.6 billion.

Its adjusted per-share earnings were 44 cents a share, excluding pension costs, the impact of Hurricane Sandy and the sale of its advertising units. Wall Street analysts had expected 45 cents a share on earnings of $32.2 billion, according to Thomson Reuters.

The company, based in Dallas, said that it sold 10.2 million smartphones over the quarter, the most ever sold by any American carrier. A majority of those smartphones were iPhones: ATT sold 8.6 million iPhones, in contrast to Verizon Wireless’s 6.2 million iPhones.

ATT did not, however, beat Verizon in an important metric for carriers: the number of new contract subscribers, who are the most valuable type of customer. ATT gained 780,000 new contract subscribers over the quarter, compared with Verizon’s 2.1 million. In the wireless industry, subscription growth is crucial as carriers joust for the few remaining people who do not already own cellphones.

The iPhone, the most popular smartphone in the world, has been an important weapon for carriers to get new subscribers. Although ATT still leads as the nation’s top seller of iPhones, Verizon has been increasing its iPhone sales every quarter, and it is getting close to catching up, said Chetan Sharma, an independent mobile analyst.

“There’s always been this attachment in consumers’ minds that ATT is the brand for iPhone,” Mr. Sharma said. “I think that’s starting to even out in the marketplace.”

Similar to Verizon, ATT last summer started offering shared data plans, which allow customers to share a single pool of data across multiple devices, including smartphones, tablets and computers. It said on the earnings call that it already had 6.6 million subscribers on these plans, about a quarter of whom are opting for plans with at least 10 gigabytes. Thanks in part to these new shared data plans, revenue from mobile data grew 14.7 percent over the quarter, to $6.8 billion, up from $5.9 billion last year.

ATT’s success with shared data plans is good news for the company, because they help to pry customers off flat-rate, unlimited data plans so that they eventually pay more for data, said Jan Dawson, an analyst with Ovum, a research firm. Indeed, ATT said more than 15 percent of shared data plan customers were switching from unlimited data plans.

ATT also saw a rise in customers for U-verse, its digital phone, television and high-speed Internet service for households. It added 609,000 U-verse customers over the quarter, bringing the total number of subscribers to about 7.7 million.

The carrier has big plans this year to attract more customers. It is in the process of a major wireless network expansion. It said late last year that it would invest an extra $14 billion to expand its wireless and broadband services through 2015. It expects that its fourth-generation network technology, called LTE, will cover 300 million people by the end of next year.

Beyond making upgrades to its wireless network, ATT has plans to offer new services that might create new revenue streams. In March, it will begin selling its new wireless home security system, Digital Life, which will allow people to use tablets or phones to monitor their homes from afar. If a burglar trips a motion sensor in the house, for example, a user can receive a text message, then call the police. Ralph de la Vega, chief executive of ATT Mobility, has said that he believes home security will be a big opportunity to increase revenue, because only 20 percent of American homes have security systems, leaving millions of homeowners as potential buyers.

ATT’s Mr. Stephenson said he was excited about the “vibrant options” for phones set to arrive in the coming year, including devices with Research in Motion’s new BlackBerry 10 system.

“I’m very optimistic about BlackBerry 10,” Mr. Stephenson said. “I hope that it’s as good as it appears to be.”

This article has been revised to reflect the following correction:

Correction: January 24, 2013

An earlier version of this article published online misstated the expectation of Wall Street analysts for ATT’s quarterly per-share earnings. It was 45 cents, not 48 cents.

Article source: http://www.nytimes.com/2013/01/25/technology/pensions-and-storm-hurt-att-earnings.html?partner=rss&emc=rss

Detroit Group Helps Journalists Cover the City’s Ups and Downs

The bus tour was part of a day-and-a-half press event organized by the Detroit Regional News Hub, a media organization that has been working closely with journalists since its founding in 2008. Its aim is to present a more balanced view of the city’s challenges.

Initiated by a group of Detroit business leaders in conjunction with local reporters and editors, the Hub, as it is known, is an unusual collaboration between civic leaders and journalists, two groups that tend to be adversaries.

In addition to the bus tour, journalists (including this one) were taken on a Detroit River cruise with officials and organizers, ushered around a renovated theater that now houses start-up companies, and introduced to social activists and entrepreneurs working in areas as varied as literacy and microlending.

But even though the Hub readily acknowledges that its goal is to obtain more evenhanded coverage of the city, it doesn’t try to hide the most blighted areas.

“Abandonment is an issue we can’t ignore here, and we know journalists can’t ignore it when reporting on Detroit,” said Marge Sorge, executive director of the Hub and a former automotive journalist who was on the committee that formed the original idea. “But everyone on that bus also learned we have people working hard on solutions.”

Julie Halpert, a freelance reporter for Reuters who took the bus tour, said: “It was pretty savvy of them to get out in front of a story like that. It was hardly image-polishing.”

In a sense, Detroit’s Hub acts like overseas “fixers” — combined translators, taxi drivers and journalists often hired by foreign correspondents for their local knowledge and contacts.

Kinda Jayoush, a freelance journalist in Montreal who often works with the Middle East Broadcasting Center, contacted the Hub last November when her supervisors in Dubai could not find a crew for a report she was preparing on Detroit’s Arab-American community. She contacted the group on a Sunday morning, and by that afternoon it had found her a cameraman for the next day.

“They were incredibly professional, helping me find sources and shots and stories over three days in Detroit,” she said. “They knew exactly what I needed as a journalist.”

The Hub’s beginnings can be traced to an economic growth initiative six years ago called the Road to Renaissance, which looked at potential solutions for many of Detroit’s problems, including its negative press image.

“Back then, every article about Detroit read like an obituary,” said Cynthia J. Pasky, chief executive of Strategic Staffing Solutions, headquartered in Detroit, and chairwoman of the Renaissance’s communications committee. “The press would come in, take their ‘ruin porn’ pictures of the abandoned Michigan railway station or Packard Plant and then leave. We knew we had to do something to try and change that.”

Another committee member, Mary Kramer, the longtime publisher of Crain’s Detroit Business, learned that Pittsburgh faced a similar problem decades ago, but had transformed itself from a declining Rust Belt city into one that made Money magazine’s “Ten Best Places to Live” list in 1989. One contributing factor was the Greater Pittsburgh Office of Promotion, which worked hard to lead reporters to more positive stories.

“They were far more P.R. than journalistic, but still had integrity as brokers of information,” Ms. Kramer said, adding that the Hub was “inspired” by the Pittsburgh group but did not want to try to orchestrate coverage as it had done.

“Our hopes with the Hub were simple,” said Ms. Sorge, who by then had left journalism and worked both in corporate communications and for Jennifer Granholm when she was Michigan’s governor. “Give them access to the right facts, and more balanced stories will emerge about Detroit. But whitewash our problems, and it will fail from the start.”

Ms. Sorge’s career experiences also guided her actions. “As a former journalist, I could not have done this any other way,” she said. “I see my job as connecting reporters to sources and data that they might not otherwise find. But it would never occur to me to try and influence what they report.”

To avoid ethical conflicts, the Hub was set up as a nonprofit and does not market itself to journalists. “The media has to find them on their own,” said Ms. Pasky, who still leads the Hub’s board of advisers.

Though initial financing of $600,000 was provided primarily by the Renaissance group, and later by the Downtown Detroit Partnership, a newer consortium of area businesses, Ms. Sorge said she had never felt pressure from business leaders to promote a specific agenda. “They know we don’t work that way,” she said, adding that she was looking for additional financing.

Ms. Sorge works with another former journalist and an array of bloggers with various backgrounds in journalism and public relations. The bloggers provide content for Detroit Unspun, a social media program the Hub began in 2010 that includes a weekly compilation of links to articles written about Detroit by professional and citizen journalists. They also publish original coverage of what they call underreported stories.

The Hub now assists some 2,000 reporters and bloggers a year, and the city’s efforts at revitalization have resulted in cover articles in Forbes, National Geographic Traveler, The Christian Science Monitor and Delta Sky Magazine. There have also been a number of articles in newspapers and online chronicling the migration of young artists and entrepreneurs to the city. In May, Salon.com called Detroit one of the new “Rust Belt Chic” places to live.

But the future may lie in Youth Neighborhood News, a broadcast journalism education program the Hub began in 2010 for Detroit students ages 11 to 18. “We teach them to report objectively, ethically and articulately,” Ms. Sorge said. “They are hopefully tomorrow’s journalists shaping the views on Detroit.”

Article source: http://www.nytimes.com/2013/01/14/business/media/detroit-group-helps-journalists-cover-the-citys-ups-and-downs.html?partner=rss&emc=rss

China Says Times Reporter Was Not Expelled

Speaking at the Foreign Ministry’s daily news briefing, Hua Chunying, a spokeswoman, said foreign news organizations were to blame for the departure on Monday of Chris Buckley, a 45-year-old Australian who had been a correspondent for Reuters until September, when he rejoined The New York Times.

Ms. Hua said the ministry had not been properly informed of his changed status.

“So far, we have neither received any notice of resignation (from Reuters), nor has the press card, which was issued by the information department (of the Foreign Ministry), been returned by Chris Buckley,” Ms. Hua said, according to the Xinhua news agency. “So, we do not know who his real boss is now.”

When Mr. Buckley’s visa, which had been issued while he worked for Reuters, ran out on Dec. 31, he and his family were forced to fly to Hong Kong, despite repeated requests from The Times for a new visa to be issued.

Ms. Hua said he was not expelled.

“There has been no such thing as a rejection of a visa extension and there is no such thing as Chris being expelled,” Ms. Hua said, according to The Associated Press.

On a related matter, The Times is also waiting for the visa of its new Beijing bureau chief, Philip P. Pan, to be issued. Mr. Pan first requested a visa last March. The  English- and Chinese-language Web sites of The Times have been blocked in China since October, when it published an investigative article about the finances of the family of China’s premier, Wen Jiabao.

This article has been revised to reflect the following correction:

Correction: January 4, 2013

An earlier version of this article misstated the job title of Philip P. Pan. He is the new Beijing bureau chief of The New York Times, not the China bureau chief.

Article source: http://www.nytimes.com/2013/01/05/world/asia/china-says-reporter-chris-buckley-was-not-expelled.html?partner=rss&emc=rss

ConAgra Raises Forecast as Earnings Exceed Expectations

ConAgra said last month that it would buy Ralcorp Holdings for $5 billion, to become the top American producer of private-label foods that stores brand as their own.

It said its full-year earnings forecast did not include any benefit from the purchase of Ralcorp. Consumer food brands ConAgra sells include Act II, Hebrew National, Marie Callender’s and Orville Redenbacher.

ConAgra has been increasing its presence in the private-label foods business, which often outpaces brand name food as consumer spending is squeezed by the lingering economic downturn.

This year ConAgra bought Odom’s Tennessee Pride, which makes breakfast sandwiches and sausage, and Kangaroo, which makes pita chips. It struck a deal in July to buy Unilever North America’s frozen meal business for $265 million.

ConAgra now predicts earnings of at least $2.06 a share for the 12 months ending May 13. It had forecast earnings of $2.03 to $2.06 a share for the period. Analysts on average were expecting $2.07 a share, according to Thomson Reuters.

The company, which is based in Omaha, predicted marketing investments would improve consumer food sales this year.

ConAgra’s profit rose to $211.6 million, or 51 cents a share, in the quarter ended Nov. 25, the company’s second fiscal quarter, from $180.2 million, or 43 cents a share, a year earlier.

Excluding items, the company earned 57 cents a share from continuing operations, topping Wall Street expectations by 2 cents.

“The results reflect the number of deals they have done over the past year,” said Erin Lash, a Morningstar analyst.

Sales rose 9 percent to $3.74 billion. Consumer foods sales rose 11 percent to contribute 64 percent to total revenue. Analysts on average had expected sales of $3.69 billion. Sales in the commercial foods business rose 5 percent, helped by strong sales at its Lamb Weston potato business outside the United States.

ConAgra’s shares closed at $30.16 on Thursday, up 0.7 percent, or 20 cents.

Article source: http://www.nytimes.com/2012/12/21/business/conagra-raises-forecast-as-earnings-exceed-expectations.html?partner=rss&emc=rss

A Million Users Desert BlackBerry, and Revenue Falls 48%

It reported other bad news as well, a month before introducing its new BlackBerry 10 phones to the public. Revenue fell 48 percent in the company’s fiscal third quarter, ended Dec. 1, to $2.7 billion from $5.2 billion a year earlier.

After a favorable tax gain, RIM reported net income of $9 million, or 2 cents a share. A year ago during the same period, RIM earned $265 million, or 51 cents a share. The company said that using nonstandard accounting methods to adjust for the tax gain and other pretax charges led to an adjusted net loss of $114 million for the third quarter, or 22 cents per share.

Analysts had expected a larger loss of 35 cents a share, according to a survey by Thomson Reuters. Nevertheless, RIM’s shares fell about 9 percent in after-hours trading. Before RIM’s announcement, shares closed at $14.12, up for the day by 3.6 percent.

The company has pinned all its hopes on the BlackBerry 10 to win back customers who may have defected to iPhones or phones using Google’s Android operating system. RIM said 79 million customers were using BlackBerry devices.

“We believe the company has stabilized and will turn the corner in the next year,” Thorsten Heins, the chief executive, said in a conference call with analysts. “We are realistic about our competitors, but we know that customers in this industry demand and respond to innovation.”

Until now, RIM had been able to offset the sharp drop in the BlackBerry’s popularity in its traditional markets, particularly the United States, through increased sales to users in developing countries. Because every BlackBerry user generates high-margin monthly fees from carriers for RIM, the last quarter’s loss of subscribers is more than just a symbolic setback.

In the conference call Mr. Heins indicated that RIM had been reducing those fees, which account for 36 percent of RIM’s revenue, in a bid to keep BlackBerry’s current product offerings alive. And in an announcement that seemed to concern some analysts on the call, Mr. Heins said that the new BlackBerry 10 phones would substantially revamp how RIM set service fees.

With BlackBerry 10, Mr. Heins said, corporate and government users will be able to pick and choose what services they purchase from RIM, a step that he said could mean that some of them would no longer generate any user fees. The company was unclear about what fees BlackBerry 10s sold to consumers would produce. Last month Mr. Heins said that consumer BlackBerry 10 models would no longer benefit from RIM’s special Web compression technology, the chief service provided to consumers by RIM.

RIM, which has no debt, pleasantly surprised analysts by increasing its cash on hand by $600 million, to $2.9 billion. The company was vague about how it achieved that beyond saying that the newfound cash came from “working capital conversion.” In the past, several analysts have speculated that the company has mainly become better at collecting its outstanding bills.

Mr. Heins said that the introduction of BlackBerry 10, however, would bring an end to the company’s cash hoarding. RIM, he said, will dig into its cash reserves during the quarter to stockpile BlackBerry 10 phones in advance of their release and to finance advertising and other marketing campaigns for the devices.

Nevertheless, Mr. Heins predicted that RIM would still hold more cash at the end of its fiscal year than the $2.1 billion it had on hand at its beginning.

RIM shipped 6.9 million current-model BlackBerry phones during the quarter and 255,000 of its BlackBerry PlayBook tablets. During the call, company officials indicated that those products were being heavily discounted.

Article source: http://www.nytimes.com/2012/12/21/technology/a-million-users-desert-blackberry-and-revenue-falls-48.html?partner=rss&emc=rss

Media Decoder Blog: New Leader for Pearson Unit That Includes Financial Times

John Ridding, the current chief executive of The Financial Times, was promoted to lead the FT Group that includes The Financial Times.Simon Newman/Reuters John Ridding, the current chief executive of The Financial Times, was promoted to lead the FT Group that includes The Financial Times.

John Ridding will take over as chief executive of the FT Group, a subsidiary of Pearson that includes The Financial Times and half of The Economist, the company said Tuesday.

Mr. Ridding, who has served as chief executive of the Financial Times since 2006, will replace Rona Fairhead. Ms. Fairhead said last month that she would be leaving the London-based media conglomerate in April. Her resignation followed the departure of Marjorie Scardino, who had served as chief executive of Pearson for nearly 16 years.

A long-time newspaperman and Asia hand, Mr. Ridding previously served as editor and publisher of the Asian edition of The Financial Times, and chairman of Pearson in Asia. He spearheaded the development of the newspaper’s Chinese language Web site and introduced China Confidential, a source of business intelligence related to Chinese trade.

Pearson’s high-level departures have sparked speculation that the company could decide to sell The Financial Times. The FT Group has been slimmed down in recent years to include a handful of core assets.

Mr. Ridding’s background and appointment signals that the group is firmly centered on the business daily, with its distinctive bisque-colored newsprint, and its prominence in fast-growing Asian markets. Both Bloomberg L.P. and Thomson Reuters have emerged as likely buyers. A Pearson spokesman has said the newspaper is not for sale.


Amy Chozick is The Times’s corporate media reporter. Follow @amychozick on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2012/12/18/new-leader-for-pearson-unit-that-includes-financial-times/?partner=rss&emc=rss

Chinese Exports Slow, Even as Economy Recovers

HONG KONG — Exports from China grew just 2.9 percent in November, far less than analysts had expected, highlighting the key role that home-grown stimulus and reforms will play in China’s renewed acceleration at a time when the trajectory of global demand remains highly uncertain.

After slowing sharply this year, China’s economy has begun to speed up again in the past couple of months. Data released Sunday reinforced the view that China was likely to avert a sudden, sharp slowdown — a “hard landing” — at least for now. Industrial production and retail sales grew 10.1 percent and 14.9 percent, respectively, in November from a year earlier.

The modest rebound of the past few months has been widely attributed to a combination of stronger export demand and the effect of stimulus measures the government introduced this year.

Trade data released by the Customs Department on Monday, however, showed export growth had sagged again in November: the 2.9 percent figure fell far short of the 9 percent the economists polled by Reuters had expected. It also represented a sharp slowdown from the 11.6 percent and 9.9 percent recorded during the previous two months.

Imports also disappointed, by staying flat from year ago.

Combined, the data from Sunday and Monday painted a picture of a recovery that is solidifying, but that nonetheless faces considerable hurdles.

The looming prospect of U.S. tax increases and spending cuts, and the festering debt crisis in Europe, have long been flagged by economists as major risk factors for the recovery in countries, such as China, that derive a large part of their growth from U.S. and European demand.

“Without the strengthening of the two key Western markets, the sustainability of the exports sector’s rebound is questionable,” Xianfang Ren, a China economist at IHS Global Insight in Beijing, said in a research note. “The extremely weak exports data have thrown in one more piece of evidence about the fragility of the recovery.”

Article source: http://www.nytimes.com/2012/12/11/business/global/chinese-exports-slow-even-as-economy-recovers.html?partner=rss&emc=rss

Consumer Borrowing Rises to $2.75 Trillion

The agency said consumers increased their borrowing by $14.2 billion in October from September. Total borrowing rose to a record $2.75 trillion.

Borrowing in the category that covers autos and student loans increased by $10.8 billion. Borrowing on credit cards rose by $3.4 billion, only the second monthly increase in the last five months.

The increase in borrowing came in a month when Americans cut back on consumer spending, reflecting in part disruptions from Hurricane Sandy.

Many consumers may also have scaled back because of fears about the automatic tax increases and spending cuts that will take effect in January if Congress and the Obama administration fail to reach a budget deal by then.

Consumer spending drives about 70 percent of the nation’s economic activity.

Economists think that it could bounce back. But the underlying trend remains weak because with unemployment remaining high, households don’t have the income to spend.

Consumers are also signaling concern. A survey of consumer sentiment, the Thomson Reuters/University of Michigan survey, fell sharply in December, economists noted, partly over worries that taxes could rise next year.

Many consumers have been reluctant to build up credit card debt, which typically carries steeper interest rates than other loans.

Credit card use has fallen sharply since the 2008 credit crisis. Four years ago, Americans had $1.03 trillion in credit card debt. In October, that figure was 17 percent lower.

During the same period, student loan debt rose. The category that includes auto and student loans is 22 percent higher than in July 2008. That reflects in part the decision by many Americans who have lost jobs to return to school to get training for new careers.

Article source: http://www.nytimes.com/2012/12/08/business/economy/consumer-borrowing-rises-to-2-75-trillion.html?partner=rss&emc=rss

Sales at Nation’s Retailers Fall Short

The reporting period included Thanksgiving and Black Friday, the official kickoff of the critical holiday shopping season. Early reports regarding those days had been mixed, and the individual retailers’ dim results suggest a big challenge in the coming weeks for retailers.

Craig Johnson, a retail consultant and president of Customer Growth Partners, said that early November was weak across the board and not just in the Northeast, which was hit by Hurricane Sandy in late October.

“The traditional post-Black Friday lull, normally starting the following week, started on …Black Friday,” Mr. Johnson wrote in an e-mail. Activity in shopping malls slowed down starting about noon that Friday, he said, “right about the time the early bird specials expired, and long after the Thanksgiving evening doorbuster items were all sold out — leaving financially stressed consumers with little reason to shop” so many weeks away from Christmas.

Over all, the 16 retailers tracked by Thomson Reuters that reported results Thursday recorded a 1.6 percent increase in sales at stores that were open at least a year. Analysts had expected a 3.3 percent jump.

It was the major chains’ results that were most troubling. Target, Kohl’s and Macy’s typically promote holiday shopping heavily, while Nordstrom sales tend to give an indication of how higher-income consumers are feeling.

Kohl’s sales at stores open at least a year dropped 5.6 percent, recording negative sales in all regions. Analysts expected a 1.9 percent gain. The company seemed to be the victim of its own “showrooming,” when consumers visit stores to see the merchandise but end up buying online. The company noted “a significant shift in Black Friday-related sales into our e-commerce channel.”

Target’s sales at stores open at least a year fell 1 percent, and its overall sales for the month decreased 0.1 percent from last November. Analysts had been looking for a 2.1 percent increase. Gregg Steinhafel, chief executive, said in a statement that profitability “remained on plan.”

Nordstrom, where same-store sales fell 1.1 percent, said the problem was a weaker-than-expected clearance sale. “Customers continue to demonstrate a strong preference for fashion and newness, which has made clearance events less compelling,” the company said. Hurricane Sandy also hurt sales in the first part of the month, it said. Analysts had projected a 4.3 percent increase.

Macy’s same-store sales fell 0.7 percent, missing analyst expectations of a 1.5 percent increase. The company said it had the largest-volume Thanksgiving weekend in its history — meaning the highest number of transactions, though not necessarily sales — but blamed Hurricane Sandy for the month’s decline.

Many of the nation’s big retailers no longer report same-store sales, including Walmart, the largest, J. C. Penney and Saks. Early on Black Friday morning, Walmart sent out a statement reporting larger crowds than last year at its stores.

Specialty and warehouse stores fared better than the large chains. Costco posted a 6 percent rise in same-store sales, 0.5 percentage point above analysts’ expectations. Limited, the parent company of Victoria’s Secret, said same-store sales rose 5 percent. Gap missed its 3.9 percent estimated increase, but still posted a 3 percent rise. Stage Stores and Stein Mart, two small chains, said same-store sales rose 13.2 percent and 7.1 percent.

Some shoppers said the deals this year were not good enough to get them to buy. “We looked through the ads and didn’t see anything we really wanted,” said Lisa Apple, 46, who was shopping in Columbus, Ohio, on Black Friday. “The good deals were on TVs, but how many TVs do you need?”

Another shopper, Laura Schimpf, 32, who lives in Delaware, Ohio, and works for the Ohio state government, agreed. “The deals don’t seem too good. We really had to hunt for good ones. I’ve been looking online for three weeks,” she said.

Christopher Maag contributed reporting from Columbus, Ohio.

Article source: http://www.nytimes.com/2012/11/30/business/sales-at-nations-retailers-fall-short.html?partner=rss&emc=rss

DealBook: Australian Magnate Abandons Bid for Whitehaven Coal

An effort to stage a buyout of Whitehaven Coal has fallen apart.

Nathan Tinkler, an Australian coal magnate, has abandoned a $5.4 billion bid for the coal mining company, amid investor concern about Australia’s mining sector. Mr. Tinkler had offered 5.20 Australian dollars, or $5.29, a share for the company in July, at what was then a 50 percent premium.

Shares of Whitehaven dropped on Friday to close at 3.1 Australian dollars a share, 11 percent below Thursday’s closing price.

Whitehaven had opened its books to Mr. Tinkler on July 23, giving him until Thursday to gather the resources for a bid. According to Reuters, which cites an unidentified person familiar with the deal, the billionaire was unable to line up enough equity financing.

“The due diligence period expired yesterday and Whitehaven has now been advised by the Tinkler Group that a formal binding proposal of $5.20 cash per share will not be forthcoming,” Whitehaven said in a statement on Friday. “Accordingly, the data room has been closed and the due diligence process has now ended.”

Mr. Tinkler has a history with Whitehaven, having amassed a 20 percent stake in the company after it bought Aston Resources, a coal company of which he was chairman, and Boardwalk Resources, another mining company he backed. This summer, he tried to parlay that stake into a bid for the entire company.

In July, Mr. Tinkler’s bidding group said it had received support from roughly 48.3 percent of Whitehaven’s shares, according to the mining company.

The effort came as investors have soured on Australia’s mining sector, contributing to a fall in coal prices. Part of that concern stems from slowing economic growth in China, a major trading partner for Australia.

Article source: http://dealbook.nytimes.com/2012/08/24/australian-magnate-abandons-bid-for-whitehaven-coal/?partner=rss&emc=rss