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DealBook: Glaxo to Buy Human Genome Sciences for $3 Billion

July 17, 2012 by Leave a Comment

A technician at work in a Human Genome Sciences laboratory in Rockville, Md.Marshall Clarke/Human Genome Sciences, via Reuters A technician at work in a Human Genome Sciences laboratory in Rockville, Md.

10:00 a.m. | Updated with news announcement

GlaxoSmithKline of Britain said on Monday that it would buy the biopharmaceutical company Human Genome Sciences on friendly terms for about $3 billion, ending a long hostile takeover campaign.

The friendly deal between the two ends Human Genome’s efforts to find an alternative buyer for the company. It also ends months of jockeying between the two drug companies, who are partners in developing the lupus drug Benlysta.

Biopharmaceutical companies like Human Genome have been in demand by acquirers in recent years. Bigger drug makers have been seeking to restock their product pipelines with new offerings as older treatments lose patent protection. Two weeks ago, Bristol-Myers Squibb agreed to a $7 billion deal to buy Amylin Pharmaceuticals, which has been developing a new drug to treat diabetes.

Under the terms of the deal, GlaxoSmithKline is paying $14.25 a share in cash, or nearly double where Human Genome Science’s shares were trading before news of the Glaxo’s initial offer was disclosed.

In April, GlaxoSmithKline first proposed to pay $13 a share to acquire Human Genome, 81 percent above its closing share price the day before the bid was announced. The British drug maker was seeking to take advantage of a steep drop in Human Genome’s share price in the last 12 months, a decline driven in part by high marketing costs for Benlysta.

But Human Genome swiftly rejected the bid as insufficient and instead put itself up for sale, inviting GlaxoSmithKline to participate in the auction process. Human Genome also put up defenses like a shareholder rights plan aimed at thwarting a hostile takeover bid.

Still, GlaxoSmithKline decided to take its bid directly to Human Genome’s shareholders and had extended that offer several times.

Last week, Human Genome and GlaxoSmithKline began talks about a potential friendly transaction, a person briefed on the talks said. On Monday, Glaxo said the boards of both companies had approved the deal.

Some analysts and investors have said that GlaxoSmithKline was the natural buyer of Human Genome. The two split profits from sales of Benlysta, and are working together on two other treatments, for heart disease and for diabetes.

The lupus drug received approval from the Food and Drug Administration, making it the first new treatment for the disease in about 50 years. But sales have been slow and have fallen far short of expectations.

Human Genome’s heart disease drug, darapladib, has also been seen as a potentially promising new product, though it is still in clinical trials.

Any other drug maker would have needed to either buy out GlaxoSmithKline’s 50 percent stake in Benlysta and the other treatments, or content itself with sharing proceeds from sales of the drugs.

Investors had long expected GlaxoSmithKline to raise its offer price above $13 a share. Human Genome’s shares had traded above that level since the proposal was first announced, closing on Friday at $13.58.

GlaxoSmithKline was advised by Lazard, Morgan Stanley and the law firms Cleary Gottlieb Steen Hamilton and Wachtell, Lipton, Rosen Katz. Human Genome was advised by Goldman Sachs, Credit Suisse and the law firms Skadden, Arps, Slate, Meagher Flom and DLA Piper.

Article source: http://dealbook.nytimes.com/2012/07/15/glaxosmithkline-in-talks-to-buy-human-genome/?partner=rss&emc=rss

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Xerox expects Services Business to Spur 2012 Growth

January 25, 2012 by Leave a Comment

Once popularly known for its office copiers and printers, Xerox now only makes 45 percent of its revenue from those kinds of products, and that area is growing more slowly than Xerox’s services business.

Xerox, based in Norwalk, Connecticut, said it aims to post adjusted earnings per share in a range of 21 to 24 cents in the first quarter of 2012 and between $1.12 and $1.18 per share for the full year compared with $1.08 in 2011.

By comparison, analysts are expecting earnings of $1.16 per share this year on revenue of $23.23 billion, according to Thomson Reuters I/B/E/S.

Ananda Burah at Bean, Murray Carret Co said the outlook was a “bit softer than hoped for” but that he was “hopeful that Xerox had injected a healthy dose of conservatism into the 2012 guidance” considering economic and currency headwinds in Europe and potentially in Japan.

Xerox shares fell 1.6 percent, or 14 cents, to $8.50 in early New York Stock Exchange trading.

Xerox said that in the fourth quarter its technology unit was hit by economic weakness in Europe but that growth in its services business had compensated for the decline.

Xerox said revenue from its services business rose 6 percent, and revenue from its technology business was down 5 percent.

Signings for services — or estimated future revenue from contracts signed during the period — rose 15 percent in the fourth quarter.

The company said adjusted earnings per share were 33 cents, up 14 percent compared with a year earlier, in line with analysts’ average estimates.

Total quarterly revenue was flat at $6 billion, just shy of analysts’ estimates of $6.08 billion.

Xerox also said its board of directors had authorized an additional $500 million in share buybacks.

According to equity research firm Starmine, which gives more weight to estimates from analysts with a better track record, Xerox is traded at 7-1/2 times 12-month forward earnings.

That compares with printer-maker Lexmark which is valued at 8.4 times and consultant Accenture at 14.2 times.

(Reporting By Nicola Leske; Editing by Maureen Bavdek)

Article source: http://feeds.nytimes.com/click.phdo?i=75719ba2a613f16bfc77edd5b24d940c

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Smartphone Sales Are Strong, but Verizon Has a Loss

January 25, 2012 by Leave a Comment

Verizon Communications on Tuesday reported rising iPhone sales and revenue growth in its wireless business, but it booked a quarterly loss, primarily because of previously announced pension charges.

The company reported a net loss of $2 billion, or 71 cents a share, for the fourth quarter of 2011, in contrast to net income of $2.64 billion, or 93 cents, in the quarter a year earlier. Revenue climbed 7.7 percent, to $28.44 billion in the quarter, from $26.4 billion in the quarter a year earlier.

Adjusted for the pension charges, the income was 52 cents a share, just below the average forecast of 53 cents from analysts. Revenue was right in line with expectations, according to Thomson Reuters. Shares of Verizon fell 61 cents, to $37.79.

“Verizon finished 2011 very strong, both in terms of revenue growth and by delivering an 18.2 percent total return to our shareholders for the full year, and the company has great momentum for 2012,” Lowell C. McAdam, Verizon’s chief executive, said in a statement.

The company said strong sales of smartphones drove its wireless business to its best quarterly growth rate ever, up 13 percent to $18.3 billion in revenue. Verizon sold 7.7 million smartphones in the fourth quarter, 4.2 million of which were iPhones.

The company added 1.5 million wireless subscribers over the quarter, bringing its total subscriber count to 108.7 million.

“We have great momentum in wireless, and we expect to build on that strength,” said Francis J. Shammo, chief financial officer of Verizon, during a conference call after the earnings report was released.

Profit margins, however, dropped because of the high subsidies that Verizon pays for each new iPhone bought by customers when they commit to a two-year contract.

Wireless carriers subsidize a part of the retail price on most new cellphones to attract customers. The companies recoup the costs over the duration of the customer’s contract.

Verizon said this week that it had a large lead over its rival ATT in the race to build out a newer, faster network called 4G Long Term Evolution, or LTE. The company says it now has LTE networks deployed in 195 markets, compared with ATT’s 26 markets, and it plans to make coverage from such so-called fourth-generation networks as ubiquitous as its older third-generation networks by mid-2013. Verizon said it sold 2.4 million 4G devices in the fourth quarter.

Mr. Shammo added that Verizon’s wireless business intends to expand in the business market, as the company is planning wireless innovations for automobiles, health care and energy conservation.

He said Verizon is advancing its lead in 4G at a time when ATT is trying to obtain more spectrum needed to expand its networks. In one effort to gain spectrum, ATT tried to merge with T-Mobile USA, but eventually withdrew the bid after it faced resistance from government agencies over antitrust concerns.

While ATT was pursuing the merger, Verizon made a deal with a consortium of cable companies, including Comcast and Time Warner, for $3.6 billion worth of spectrum.

Though ATT is far behind in acquiring spectrum, it is not out of the 4G game, said Christopher C. King, a telecom analyst at Stifel Nicolaus. The company still has enough spectrum to deploy its nationwide 4G LTE network.

Verizon’s wireline business, which includes traditional landlines, continued to shrink. Quarterly revenue decreased 1.5 percent, to $10.14 billion.

To Simon Leopold, an analyst at Morgan Keegan, Verizon’s aggressive pursuit of 4G networks symbolizes its continued investment in superior technologies to attract consumers and beat rivals. “ ‘It’s the network’ is not just a tagline with Verizon,” Mr. Leopold said. “It’s something that’s deep within their culture.”

Verizon’s expansion of 4G will probably create new opportunities for makers of networking equipment, like Cisco, Alcatel Lucent and Juniper, meaning consumers can expect a wave of new devices compatible with the faster network in the coming year, Mr. Leopold said.

This article has been revised to reflect the following correction:

Correction: January 24, 2012

An earlier version of this article used net income figures that understated Verizon’s losses. It now uses updated net income figures that show the company lost $2 billion, not $212 million.

Article source: http://feeds.nytimes.com/click.phdo?i=cbf38fc8b376196b6de72a75996d0d67

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G.E. Says Operating Profit in Quarter Rose 6%

January 20, 2012 by Leave a Comment

The financial performance is in line with Wall Street’s expectations and reflected the company’s strategy of paring back its reliance on its big finance arm and relying more on its diverse portfolio of industrial businesses.

The quarterly profit was helped by strong orders for jet engines and a favorable tax rate. G.E. executives expressed confidence that despite “volatile” economic conditions, especially in Europe, the company would remain on track for double-digit earnings growth in 2012 and an increase in the dividend payout to shareholders.

G.E. reported that its operating earnings rose 6 percent to $4.1 billion, which excludes the previous year’s contribution from NBC Universal, which G.E. had owned and sold a majority stake to Comcast.

Its operating earnings per share rose 11 percent, to 39 cents a share. The result partly reflects fewer shares outstanding than the year-earlier quarter, because the company bought back shares, and was just above analysts’ average estimate of 38 cents a share, as compiled by Thomson Reuters.

Revenue for the quarter declined 8 percent, to $38 billion. That was in line with Wall Street’s forecast of $40 billion. Excluding revenue in the 2010 fourth quarter from NBC, revenue from continuing operations rose 4 percent.

In a statement, Jeffrey R. Immelt, General Electric’s chief executive, said the quarterly performance underlined the company’s “strength and resilience,” continuing a steady recovery from the financial crisis. In Europe, Mr. Immelt said, the company would be restructuring its operations given the weakness in that market.

But Mr. Immelt said G.E. remained confident that its financial improvement would improve in 2012 enough to “provide dividend growth to our shareholders in line with earnings.”

Revenue in General Electric’s industrial businesses — ranging from jet engines and power generators to medical-imaging equipment and wind mills — rose 10 percent to $26.8 billion. The result was helped by strong sales of jet engines and gas turbines in the Middle East.

The company’s revenue was held back by a 9 percent decline, to $11.6 billion, in its finance unit, GE Capital. That contraction was by design. Before the financial crisis hit in 2008, GE Capital had grown well beyond its traditional business of financing sales of the company’s industrial equipment into home mortgages in Britain and consumer finance in Japan.

But battered by the credit crunch, General Electic was forced to cut its dividend for the first time since the Great Depression, and began the lengthy process of shedding bad loans and trimming the finance business.

A smaller GE Credit produces less revenue for the company, but the recovery of the unit has been the main source of profit gains in the last few years.

“GE Capital is continuing to improve and to drive earnings growth for the company,” said Steven Winoker, an analyst at Sanford C. Bernstein.

Article source: http://www.nytimes.com/2012/01/21/business/general-electric-says-quarterly-profit-rose-6.html?partner=rss&emc=rss

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DealBook: Morgan Stanley Reports a Loss as Settlement Weighs on Results

January 19, 2012 by Leave a Comment

Morgan Stanley's headquarters in Manhattan.Scott Eells/Bloomberg NewsMorgan Stanley‘s headquarters in Manhattan.

Morgan Stanley, hit hard by a big legal charge and a difficult economy, swung into the red in the fourth quarter, reporting a loss of $275 million.

The loss of 15 cents a share compares with a a profit of 42 cents a share in the quarter a year ago, but is better than a loss of 57 cents that was expected by analysts polled by Thomson Reuters. Morgan Stanley last posted a loss in the second quarter of 2011.

Despite the loss, the bank’s chief executive. James P. Gorman struck a positive note in the earnings release, saying that Morgan Stanley ended the year “in better shape” than where it started and dealt with a number of outstanding legacy and strategic issues that had been dogging it.

The firm took a one-time $1.7 billion charge related to a legal settlement with bond insurer MBIA, which weighed on the results for the quarter. The charge accounted for a loss of 59 cents a share.

Fourth-quarter revenue in institutional securities fell 42 percent to $2.07 billion. One number that stood out in the institutional securities division was its compensation ratio. It came in at $1.6 billion, 75 percent of net revenue. The number is high because it includes the MBIA settlement. If that is removed the number drops to a more normalized 41 percent.

Asset management reported a sharp drop in revenue, falling to $424 million for the period, down 50 from the year-ago period. Morgan Stanley attributed the drop to lower gains on investments it has made in its merchant banking and real estate investing businesses.

The one main bright spot in the quarter was the firm’s global wealth management division. It posted net revenue of $3.25 billion this quarter, down just 3 percent from the year-ago period. The division had $1.6 trillion assets under management in the quarter, unchanged from the previous quarter.

All told, the firm logged net revenue of $5.71 billion in the quarter, down 26 percent year the year-ago period.

Morgan Stanley also announced that it has set aside $16.4 billion in 2011 to pay its employees, 51.2 percent of its net revenue. In 2010, Morgan Stanley paid $16.05 billion to employees, which also came to roughly 51 percent of its revenue. This year, with money tight, Morgan Stanley, as previously reported, decided to cap all cash bonuses at $125,000 for the year.

Morgan Stanley, like its rivals, is trying to navigate its way through the current difficult economic environment, which is exasperated by a tighter regulatory regime that has forced firms to hold more capital against certain operations and out of other businesses altogether.

On Wednesday, Goldman Sach, said its profit in the fourth quarter was $978 million, ahead of analyst expectations but still muted compared with its historical earnings power.

Yet Morgan Stanley was hit harder by the credit crisis than Goldman Sachs and Mr. Gorman has spent the last two years rebuilding the firm. He has reduced the risk in some divisions and focused a lot of his energy building out Morgan Stanley’s wealth management division, which is a lower risk operation that has the potential to deliver steady returns

Morgan Stanley on Wednesday also declared a quarterly dividend of 5 cents a common share.

Article source: http://dealbook.nytimes.com/2012/01/19/morgan-stanley-reports-a-loss-as-settlement-weighs-on-results/?partner=rss&emc=rss

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U.S. Trade Deficit and Consumer Sentiment Rise

January 14, 2012 by Leave a Comment

A separate survey released on Friday showed that consumer sentiment hit an eight-month high in early January as Americans grew more optimistic about job prospects.

The Thomson Reuters/University of Michigan preliminary January reading on its overall index of consumer sentiment rose to 74 from 69.9 in December for the fifth month of gains and the highest level since May 2011.

The report topped expectations of 71.5 and contrasted with December’s weaker-than-expected retail sales reported on Thursday.

“This shows even though the retail sales number this week was disappointing, there could be a little more underlying strength,” said Kathy Lien, director of research at GFT Forex in Jersey City. “I’d be wary of looking at this as a shift in long-term confidence, but I’d look at this as good news today.”

Commerce Department data showed that the trade gap was $47.8 billion in November, exceeding analysts’ forecast of a $45 billion deficit.

“The trade balance deteriorated pretty significantly, and it could shave a few tenths of a percent off our expectation for fourth quarter,” said Russell Price, senior economist at Ameriprise Financial.

JPMorgan Chase said gross domestic product growth for the fourth quarter was now tracking closer to 3 percent than the company’s forecast of 3.5 percent.

A wider deficit shows that more goods and services bought by American businesses and consumers were produced outside the country, subtracting from gross domestic product.

“The external outlook does not bode well for U.S. exports, as a deceleration in global growth will coincide with a stronger U.S. dollar due to lingering financial concerns regarding Europe’s sovereign debt turbulences,” wrote Martin Schwerdtfeger, a senior economist at the TD Bank Group, in a note.

A dip in import prices showed that inflation pressures were still muted, giving the Federal Reserve wiggle room as it holds benchmark interest rates at ultralow levels.

Import prices were down 0.1 percent in December after a 0.8 percent gain in November as oil prices fell, in line with economists’ expectations.

Economic growth in the final quarter of 2011 is likely to have accelerated from the third quarter’s 1.8 percent rate, with many economists expecting an annualized rise of around 3 percent.

Consumer spending, once a crucial pillar of the economy, remains lackluster and sensitive to shocks.

Although some Federal Reserve officials have said further steps may be needed to stimulate the economy, no action is expected at the next Fed policy meeting at the end of the month.

Thirty-four percent of consumers polled in the confidence survey said they had heard of recent job gains, a record high in the survey’s history and well above the 21 percent recorded in December.

“The data suggest a stronger consumer spending outlook, rising to about a 2.1 percent gain in 2012,” Richard Curtin, the survey director, said in a statement.

But consumers still lacked confidence in government economic policies, with the majority rating them unfavorably for the sixth consecutive month.

Americans also remained dour on their personal finances, with just 24 percent expecting their finances to improve in January, compared with 25 percent last month.

The survey’s barometer of current economic conditions rose to the highest level since February at 82.6, from 79.6, while its gauge of consumer expectations rose to 68.4 from 63.6.

Article source: http://feeds.nytimes.com/click.phdo?i=b55d071f1562025bae74effb669dce56

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DealBook: Groupon’s Real Deals Trump Zynga’s Virtual Sheep

December 23, 2011 by Leave a Comment

Mark Pincus, left, chief of Zynga, and Andrew Mason, chief of Groupon.Zef Nikolla/NASDAQ, via Reuters and Brendan McDermid/ReutersMark Pincus, left, chief of Zynga, and Andrew Mason, chief of Groupon.

This holiday season, investors seem to prefer real deals to virtual sheep.

It’s been several weeks since Groupon and Zynga went public. Yet it’s striking how the two companies have performed in the marketplace since their initial public offerings.

Groupon shares have fallen 15.4 percent since spiking on their Nov. 4 debut. Yet at $22.10, they still remain above their $20 initial offer price. Zynga shares have tumbled 14.5 percent since beginning trading last week, and at $9.47 remain below their I.P.O. price of $10.

It is perhaps more surprising given the amount of trouble Groupon raised during its run-up to going public. There were the controversial accounting measures, the inopportune comments from its chairman, the much-debated letter from its chief executive and its revenue restatements.

By contrast, Zynga had to revise its revenue only once — which had the effect of improving its current numbers.

Even by looking at the performance numbers, Zynga appears to be doing a bit better. The company posted $597.5 million in revenue and $27.9 million in earnings last year, full stop.

As for Groupon? The math gets a bit more complicated:

  • It posted $312.9 million in net revenue. Fair enough.
  • But in terms of gross billings, which includes money that would eventually be paid to merchants, it reported $745.3 million.
  • On a generally accepted accounting principles basis, Groupon recorded a $456.3 million loss.
  • And using one of Groupon’s preferred accounting metrics, the company recorded a $181 million loss.

So why is Zynga’s stock underperforming?

There’s a technical possibility: the difference in the two companies’ floats. Zynga sold about 14 percent of its outstanding shares in its I.P.O. But Groupon sold an almost absurdly low 5 percent of its stock, creating significantly more scarcity for the coupon company’s shares.

Time will tell how each fares, especially when the lock-ups for insider stock sales expire. That could show what the people with the deepest knowledge of each company’s prospects — management — thinks of where each player is headed.

Article source: http://feeds.nytimes.com/click.phdo?i=9faaacc4349fec74f511e7d60f7ec3d2

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Demand Is High for Euro Loans From Central Bank

December 21, 2011 by Leave a Comment

European stocks and the euro initially gained, and bond yields fell for euro-zone governments like Spain and Italy that had been under pressure of late. But by afternoon, equities markets were down slightly and borrowing costs for Spain and Italy rose again.

In its role as lender of last resort to banks, the E.C.B. allocated 489.2 billion euros, or $644 billion, to 523 institutions, through what are known as long-term repurchasing operations. That was well above the roughly €300 billion average estimate of analysts polled by Reuters and Bloomberg News, though estimates had been widely divergent.

The injection of three-year funds was one of the new measures announced by the E.C.B. on Dec. 8
to calm European credit markets, which have become increasingly frothy as the euro zone crisis wears on. It was the first time that the E.C.B. has extended such loans for longer than about a year. Banks will pay the benchmark interest rate, currently 1 percent.

“This reduces the tail risk of a Lehman-type situation, where banks go into the new year facing a wave of refinancing and are unable to access the market,” Jacques Cailloux, chief euro area economist at Royal Bank of Scotland in London, said.

Mr. Cailloux said the initially positive market reaction showed investors were breathing easier, but “we’ll see if this is sustained. I don’t want to downplay the importance of the E.C.B.’s action, but the euro’s problems are bigger than that, with political and economic dimensions that still need to be addressed.”

The E.C.B., as part of its effort to prevent a credit crunch, also broadened the collateral it agreed to accept in return for the loans. The central bank is even accepting outstanding loans as security, a measure designed to help smaller community banks that may lack conventional forms of collateral like bonds.

Carsten Brzeski, an economist in Brussels with ING Group, said the size of the take-up by lenders was not surprising, because “there is obvious demand for liquidity, and it’s cheap. There’s almost a free lunch out there, so even banks that didn’t need liquidity would be thinking, ‘why not be part of it?”’

Mario Draghi, the E.C.B. president, said earlier this week that helping the smaller banks was crucial because they provide most of the credit to small businesses.

The three-year loans are also designed to compensate for a dearth of longer-term market funding, at a time when banks are facing the need to roll over an extraordinarily high amount of their own debt. Banks in the euro zone must raise more than 200 billion euros in the first three months of 2012, according to data compiled by Dealogic and cited by the E.C.B.

Banks often borrow money for relatively short periods and loan it for longer periods, profiting from the difference in interest rates. But this so-called maturity transformation means that banks must continually roll over their debts. An otherwise healthy bank can fail if it is not able to raise fresh cash.

Gilles Moëc, an economist at Deutsche Bank in London, said the E.C.B. action “is very positive for the banks,” but said “the jury is still out” on what it means for embattled euro zone governments.

Strong demand at recent Spanish debt auctions, which drove down yields, suggests that banks were loading up on the debt to use as collateral for the operation Wednesday, he said.

To the extent that banks continue buying sovereign debt — something they have been trying to move away from because of the euro crisis — government financing will be easier.

Economists said it appeared that only 190 billion to 200 billion euros of the E.C.B. funds Wednesday represented new lending. Rather, Mr. Cailloux said, most of the uptake represented banks “recycling liquidity that was already in the system,” shifting from shorter maturities into three-year loans.

Article source: http://feeds.nytimes.com/click.phdo?i=a19f5db2d33acd2680d08238118f5983

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Media Decoder Blog: Reuters Says New Chief Will Lead Turnaround

December 2, 2011 by Leave a Comment

9:24 p.m. | Updated

Thomson Reuters said Thursday that it was replacing its chief executive, Thomas H. Glocer, who had struggled to turn around the financial news and information service in an increasingly competitive market.

James C. Smith, Thomson Reuters’s chief operating officer, will replace Mr. Glocer beginning Jan. 1.

The switch comes at a tumultuous time for the company, which has a market capitalization of about $22 billion. In the struggling economy, fewer companies are willing to pay for the financial tools and market analysis that Reuters provides on expensive desktop terminals. Reuters also faces competition from rivals like Bloomberg L.P., FactSet Research System and Dow Jones, part of News Corporation.

Its markets division mainly serves banks and brokerage houses and accounts for 60 percent of overall revenue. The company was late to the market with its Eikon desktop product and, in the view of many clients, it was not up to the standards of competing technology from Bloomberg.

“Thomson Reuters has been losing the bake-off,” said Douglas B. Taylor, the managing director of Burton-Taylor International Consulting, a company that tracks the financial information business. Not only have Bloomberg and, to a smaller degree, other firms been taking customers away from Thomson Reuters, Mr. Taylor said, but the company has also been largely unsuccessful in attracting new clients.

In July, Thomson Reuters announced the departure of a half-dozen executives, including Devin N. Wenig, the market division’s chief executive.

Mr. Glocer, 56, subsequently assumed responsibility for the markets division.

“By the end of this year, the organizational, strategy and budget work I have been leading will be complete and the transition plan I launched last summer will have achieved its objectives,” Mr. Glocer said in a statement. Of his replacement, Mr. Glocer said: “Jim Smith is a very talented executive with whom I have worked closely over the past four years; he is ready to lead Thomson Reuters.”

The announcement came after the markets closed on Thursday.

In 2007, the Thomson Corporation agreed to pay $7 billion for Reuters. At the time many were surprised that Mr. Glocer was picked to lead the combined operation. Richard J. Harrington, Thomson’s chief at the time, retired as soon as the transaction closed.

The Thomson family, through its private holding company, Woodbridge, has a 55 percent stake in Thomson Reuters.

A former journalist, Mr. Smith, 52, joined the Thomson Newspaper group in 1987 and has held several positions, including leading the division that sells tax, legal and accounting products.

David Thomson, chairman of Thomson Reuters, said in a statement: “Tom successfully directed an extensive integration, expanded our business internationally, revitalized the Reuters news organization and championed talent across the entire business.”

Article source: http://feeds.nytimes.com/click.phdo?i=7d062c5c5a4ab3575ae59fd2d52b9f60

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Microsoft Income Gains 6%, but Weak PC Sales Continue

October 20, 2011 by Leave a Comment

Microsoft said its net income rose 6 percent, to $5.74 billion, or 68 cents a share, from $5.41 billion, or 62 cents a share, a year ago. Revenue jumped 7 percent, to $17.37 billion, from $16.2 billion a year ago.

Analysts on average estimated Microsoft would earn 68 cents a share on revenue of $17.24 billion, according to Thomson Reuters.

The PC market, or at least for the vast majority of PCs inside companies running Microsoft’s Windows operating system, have suffered lately as economic uncertainty has crimped spending on information technology. Newer types of devices like tablets and mobile phones have sapped some of the business as well. Microsoft said its revenue from selling Windows rose less than 2 percent during its first quarter, which ended Sept. 30.

Microsoft’s shares fell 1 percent after it released the financial results at the close of normal trading hours.

Shipments of new PCs grew only 3.6 percent globally in the quarter, which ended Sept. 30, according to the research firm IDC. Apple defied the trend, reporting a 26 percent increase in the number of Macs sold during the same period, the company said on Tuesday.

Brendan Barnicle, an analyst at Pacific Crest Securities, said the company’s revenue from Windows sales were weaker than he had expected. “We’ve now had a year where Windows hasn’t come in in-line with analyst expectations,” he said. “It’s less of a miss than in the past.”

One other problem for Microsoft is that some of the stronger sources of growth in the PC business are now in developing markets like China. While that is good news for other players in the PC business, like Intel, that make hardware components, Microsoft has a harder time in those regions because of high software piracy rates and lower average selling prices for its products.

Microsoft’s Windows business is also facing a growing challenger in the iPad. Tech industry executives are divided about the degree to which Apple’s tablet computer is eating away at sales of traditional PCs, but even Microsoft executives concede there has been an impact, especially on low-end notebooks.

Earlier this week, Apple’s chief executive, Tim Cook, said he believed that the iPad was cannibalizing some sales of Macs, but that a “materially larger” number of iPad buyers were choosing the tablet device over a Windows PC. Apple sold 11.1 million iPads in its last quarter. “With cannibalization like this, I hope it continues,” Mr. Cook said.

Microsoft intends to tackle the threat from the iPad with a new version of Windows, known currently as Windows 8, that has been redesigned for the touch screens of tablet devices, but that product is not expected to appear for about another year.

Peter Klein, Microsoft’s chief financial officer, said in a news release that the company’s “product portfolio is performing well, and we’ve got an impressive pipeline of products and services that positions us well for future growth.”

Article source: http://feeds.nytimes.com/click.phdo?i=5b768feda19b585682d1f19a9c32b4e4

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