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Danish Wind Turbine Maker Appoints New Leader

August 21, 2013 by NewsMaker

LONDON — Vestas, the Danish wind turbine maker, appointed a new chief executive, Anders Runevad, on Wednesday amid signs that the company is continuing to struggle.

Mr. Runevad replaces Ditlev Engel, who been chief executive since 2005.

The company reported a net loss of 62 million euros, or $83 million, for the second quarter, compared with a loss of $10.7 million in the similar quarter a year earlier. Revenue declined to $1.6 billion, compared with $2.1 billion the previous year.

The company’s share price, which has fallen about 85 percent since 2009, was up 5 percent Wednesday in Copenhagen trading.

Vestas, once a star of the wind power industry, has been under pressure in recent years from the recession in Europe, lower government subsidies for alternative energy and competition from China. These trends have put pressure on most of the renewables industry.

The company’s chairman, Bert Norberg, a former executive at Ericsson, the Swedish telecommunications company, has been leading a restructuring of the company since 2012. Several top executives have been replaced. The company also says it is cutting its work force to no more than 16,000 at the end of this year, from 22,700 employees at the end of 2011.

Like Mr. Norberg, Mr. Runevad, the new chief executive, comes from Ericsson, where he was president for Western and Central Europe.

“The company is now entering a new phase, where we want to realize our growth potential, and I am confident that Mr. Runevald has the right experience to lead the company, ” Mr. Norberg said in a statement.

There were some bright spots in the results announced Wednesday. Orders booked in the quarter nearly doubled, to $2.3 billion. Free cash flow, or money available for investment or redistribution to shareholders, was positive, at $264 million, compared to a negative $453 million a year ago.

But there were also signs of lingering problems. For instance, Vestas cut its estimate of its order book by $536 million, to $95 billion, “due to uncertainty surrounding a few customers’ ability to comply with the contractual obligations.” The company said that about half of the amount “relates” to a Central European customer that it did not name.

Article source: http://www.nytimes.com/2013/08/22/business/global/danish-wind-turbine-maker-appoints-new-leader.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: previous year, share price, top executives

DealBook: Bid for Invensys Gives Investors Appetite for More

July 12, 2013 by NewsMaker Leave a Comment

LONDON – Invensys, the British maker of industrial control products and software that has long been the subject of takeover speculation, is in talks to be acquired by Schneider Electric of France for about $5 billion. But investors are indicating that they expect a competing offer.

Schneider, which provides low- and medium-voltage electrical equipment and services, offered to pay 5.05 pounds a share in cash and new shares for Invensys, valuing the company at 3.3 billion pounds, the company said late Thursday. While the talks are at an early stage, Invensys said it was likely to accept such an offer.

“The board of Invensys has indicated to Schneider that it is likely to recommend a firm offer at the offer price,” Invensys said in a statement.

The proposed price is 15 percent above Invensys’s closing share price on Thursday. The company’s shares jumped 16 percent, to 5.1 pounds, in London on Friday on expectations by some investors that Schneider would increase the offer or face competition from another bidder. Shares of Schneider fell more than 4 percent in Paris.

According to takeover rules, Schneider has until Aug. 8 at 5 p.m. to make a formal offer.

Invensys has been considered a takeover target since at least last year when takeover discussions broke down with Emerson Electric, which is based in St. Louis. Invensys had been shackled by pension liabilities of more than $700 million at the time. But the company sold its rail-infrastructure business to Siemens of Germany in May, which not only allowed it to ease its pension burden but also made it a more attractive takeover target. In addition to Schneider, other potential suitors could include General Electric and ABB, analysts have said. G.E. and ABB declined to comment.

Juho Lahdenpera, an analyst at Nomura, said Invensys was the most obvious takeover target in its industry and that it was unlikely that Schneider’s takeover approach would touch off a wave of other deals in the sector.

“Valuations are quite high and managers are generally still hesitant because of the economic situation,” Mr. Lahdenpera said. He added that he was skeptical that another bidder would emerge for Invensys. “It’s a full price, fair for Invensys and given what Schneider can do with these assets, it would be surprising to see another bidder,” he said.

Schneider said last summer that it was back on the acquisition trail after completing and integrating a string of takeovers that included companies in Spain and India. It said the strategic and financial rationale for buying Invensys was “compelling” and that an “enlarged group would significantly expand its access to key electro-intensive segments.”

A takeover would give Schneider access to Invensys’ large customer base in the oil and gas industries for which it provides control and safety systems. Invensys also sells heating and ventilation controls to large manufacturing companies as well as room thermostats and other temperature control systems to private households.

Schneider’s products include emergency lighting, fuse switches, weather observation hardware and charging devices for electric vehicles. Schneider said it expected the takeover would create “significant cost savings.”

Article source: http://dealbook.nytimes.com/2013/07/12/bid-for-invensys-gives-investors-appetite-for-more/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: pension liabilities, share price, takeover target

News Analysis: After Apple’s Rise, a Bruising Fall

April 19, 2013 by NewsMaker Leave a Comment

Wall Street has turned viciously on its one-time iDarling. The rout in Apple’s share price — it fell nearly 2.7 percent on Thursday, bringing the damage since late September to 44 percent — has many wondering when, and where, all of this will end.

The answer, of course, is that no one really knows. Yes, Apple is slowing, as companies inevitably do. But Apple remains enormously profitable and the envy of corporations worldwide.

And yet Apple’s decline in the stock market has been so swift and so brutal that the development has begun to change the way investors view the company. Apple no longer looks like a sure thing.

It is a remarkable turn in one of the standout stock market stories of recent years. Only seven months ago, Apple’s share price raced above $700 to a record high, making Apple the most valuable company on the planet. By Thursday, the stock had sunk to $392.05, closing below $400 for the first time since late 2011.

The proximate cause of Thursday’s decline was news this week of a glut of audio chips at one of Apple’s suppliers. That, in turn, prompted concern that sales of iPhones might fall short of expectations.

But that was just one more bit of downbeat news in what has been a downbeat few months. All told, $290 billion has been wiped off Apple’s value since September. It might seem difficult to believe, but Apple now ranks among the biggest losers in the stock market over the last seven months, right next to the J. C. Penney Company, that sick man of American department stores. The last time Apple was trading this low was in November 2011. Steve Jobs had just died and everyone wondered how Apple would carry on without its visionary leader.

Stock price aside, Apple is bigger and, by some measures, stronger today that it was then. It sells more iPhones and iPads than ever. It is expanding its global reach. And it is making so much money — analysts expect the company to report another solid quarter next week — that it has been having trouble figuring out what to do with all of its cash. Speculation is rife that Apple might pass some cash to shareholders in the form of an increased stock dividend.

On one level, the Apple story is a common one on Wall Street: what goes up also goes down. As Apple’s stock price soared in recent years, some pointed out that the company’s sales couldn’t keep growing — and its share price couldn’t keep rising — at that rapid pace forever. In hindsight, Apple’s surge above $700 strikes some as irrational, as does its precipitous plunge back below $400.

“Overexuberance on the upside leads to herd behavior and panic during the correction,” said Avanidhar Subrahmanyam, an professor of behavioral finance at U.C.L.A. “People just panic and the stress hormone kicks in.”

One issue is that Apple is a favorite stock among individual investors. The investment firm SigFig estimated last fall that 17 percent of all retail investors owned Apple stock, four times the number that owns the average stock in the Dow Jones industrial average.

Trading by retail investors can be amplified by hedge funds, who see everyday investors piling in and push in the opposite direction by shorting the stock, betting it will decline. The so-called short interest in Apple reached a peak last November, but hasn’t gone down much since then, according to data from Nasdaq.

Aswath Damodaran, professor of finance at New York University, said the enthusiasm surrounding Apple last year prompted him to sell his own holdings in the company when the stock was around $610.

“I was terrified by the kinds of investors coming into Apple’s stock,” said Mr. Damodaran. “Not only were they coming in with unrealistic expectations, they were at war with each other.”

Recently, Mr. Damodaran began buying shares again, convinced that the fears had gone too far.

“Right now, Apple is being priced as though it has no future growth,” he said.

Article source: http://www.nytimes.com/2013/04/19/technology/after-apples-rise-a-bruising-fall.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: late september, proximate cause, share price

Google’s Earnings Beat Expections, but Revenue Does Not

April 18, 2013 by NewsMaker Leave a Comment

The company reported first-quarter financial results Thursday that exceeded analysts’ expectations for profit, yet missed their expectations for revenue. Analysts blamed Google’s mobile business for the weakness, as consumers rapidly shift their computer use to mobile devices. Even though Google is even more dominant on smartphones than it is on computers, mobile ads cost less, which is a threat to search advertising revenue, Google’s lifeblood.

Net income in the first quarter rose 16 percent to $3.35 billion, or $9.94 a share. Excluding the cost of stock options and the related tax benefits, Google’s profit was $11.58 a share, up from $10.08 a year ago. Analysts had expected $10.69 a share.

The company reported first-quarter revenue of $13.97 billion, an increase of 31 percent over the same period last year. Net revenue, which excludes payments to the company’s advertising partners, was $11.01 billion, up from $8.14 billion. Analysts had expected net revenue of $11.3 billion.

“We had a very strong start to 2013,” Larry Page, Google’s chief executive, said in a statement. “We are working hard and investing in our products that aim to improve billions of people’s lives all around the world.”

Despite Google’s mobile challenge, investors who want a piece of the mobile revolution have been fleeing Apple and turning to Google instead. Over the last 12 months, Google’s share price has climbed 26 percent while Apple’s has fallen 36 percent as the company faces flat profits, slowing growth and growing competition from Google’s Android phones.

“Google replaced Apple in tech portfolios as the comfort food trade in mobile,” Jordan Rohan, an Internet analyst at Stifel Nicolaus, wrote in a research note.

Shares climbed 1.7 percent in after-hours trading Thursday after closing at $765.91 before the earnings news was released.

Google will not reveal the number of searches people perform on desktop computers or on mobile devices, or the amount of money Google makes from each of those searches. Instead, investors rely on a metric known as cost per click, or the price that advertisers pay Google each time someone clicks on an ad.

In the first quarter, that price declined 4 percent from both the previous quarter and the previous year, falling for the sixth consecutive quarter, and declining more than analysts had expected. They attribute that to the increase in less expensive mobile ads. Mobile ads cost about half as much as desktop ads, and receive only a quarter of the clicks that desktop ads do, according to BGC Partners.

Google has been scrambling to fix the mobile problem. In February, it announced the biggest change to its advertising program, called enhanced campaigns. Now advertisers, by default, will have to buy ad campaigns on smartphones and tablets when they buy ads on desktop computers. The program, which is scheduled to be fully in effect this summer, is expected to increase mobile ad prices because there will be more demand, something that pleases shareholders but frustrates advertisers.

Google has also benefited from another new type of ad, called product listing ads, which retailers are now required to buy if they want to appear in Google’s comparison shopping service. These ads now account for 17 percent of search ad spending on Google, and people click on them about 25 percent more than they do on text ads, according to Adobe, which manages $2 billion in online ad spending.

Google’s ad business remains the strongest on the Web. It is the leader in online search, display and mobile advertising markets, bringing in 41 percent of all digital ad revenues, according to eMarketer. On mobile devices, it earns 55 percent of ad dollars and 93 percent of search ad revenue, though it trails Facebook in mobile display ad revenue.

Article source: http://www.nytimes.com/2013/04/19/technology/googles-earnings-beat-expections-but-revenue-does-not.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: google, share price, stock options

Fair Game: Dell Shareholders Look Hard at Takeover Effort

February 23, 2013 by NewsMaker Leave a Comment

That’s what more and more Dell shareholders appear to believe about the $13.65 per-share price proposed on Feb. 5 by Mr. Dell and Silver Lake Partners, a technology investment firm. Initial objectors to the buyout have been joined by additional shareholders concerned about getting a fair shake.

The issue of fairness is a hazard of management-led buyouts, of course. Are insiders, who have an enormous information advantage owing to their deep knowledge of a company’s operations, trying to get control of an enterprise when its shares are perhaps temporarily depressed? Over the last year, Dell’s stock has lost 19 percent of its value.

Some investors wonder if Mr. Dell, who owns 14 percent of the shares outstanding, might have a hot new product on the drawing board that has the potential to make the company a highflier again.

Neither management nor Mr. Dell is saying much of anything about the company’s prospects. Last Tuesday, when Dell announced mixed earnings for the year, the company declined to make any projections for coming quarters on the conference call with investors and analysts. Its chief financial officer cited the pending deal as the reason no outlook was given.

As is the case with all insider deals, there’s great potential for outside shareholders to be treated unfairly. Making the deal even more problematic, Dell’s shareholders have little data upon which to assess its price. Dell’s regulatory filings say that the $13.65 per-share price is the result of extensive “bids and arms-length negotiations” between Silver Lake and the special committee of Dell’s board beginning in late October 2012.

Still, there’s no mention of how the $13.65 per-share offer stacks up against the company’s long-term enterprise value, an assessment of future earnings potential that is a typical measure in a takeover. Instead, the offer by Mr. Dell and Silver Lake seems based on the company’s recent stock price. Their $24.4 billion deal represents a 37 percent premium to the stock’s average price over the previous three months, they say.

Meanwhile, Southeastern Asset Management, one of Dell’s largest outside shareholders, estimates that the company is worth $23.72 a share, almost 75 percent more than the buyers are offering. Southeastern has come to that conclusion using publicly available information, however, because that’s all it has access to.

Naturally, both of these parties have a vested interest in getting their price in the deal. Mr. Dell and his group want to pay as little as possible, while long-suffering outside owners hope for more.

Trying to remedy this unsatisfying situation, an uninvolved investor organization has made an excellent suggestion: an independent, peer-reviewed analysis of Dell’s enterprise value should be done on behalf of its outside shareholders. Based on the same information Dell’s management has, such an assessment would assure investors that they are being bought out at a fair value.

This idea comes from the Shareholder Forum, a nonpartisan, independent creator of programs devised to provide the kind of information investors need to make astute decisions. The Forum, overseen by Gary Lutin, a former investment banker at Lutin Company, suggests hiring a qualified expert to analyze the company’s operations. This would be similar to the so-called fairness opinions provided to shareholders in takeovers by outsiders. The analysis would be subject to confidentiality when necessary and would be reviewed by recognized analysts, academics and other investment professionals.

On Feb. 14, Mr. Lutin sent a letter to Mr. Dell and Alex Mandl, chairman of the special committee of Dell’s board charged with ensuring the deal’s fairness to all shareholders. In the letter, Mr. Lutin asked that the company support the independent analysis and provide assistance in its preparation.

Mr. Lutin said he had assumed that the board committee and Mr. Dell would want to support this project. “Shareholders have a very well-established right to any information relevant to their investment decisions under Delaware law,” Mr. Lutin said last week. “They also have the right to expect management to be responsible for addressing those interests.”

But last week, Mr. Lutin said that lawyers representing Mr. Mandl and his committee told him they would not be supporting the independent analysis.

Article source: http://www.nytimes.com/2013/02/24/business/dell-shareholders-look-hard-at-takeover-effort.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: insiders, regulatory filings, share price

DealBook: Facing New Legal Worry, Barclays Reports a Loss

November 1, 2012 by NewsMaker Leave a Comment

Facundo Arrizabalaga/European Pressphoto AgencyA branch of Barclays in London. On Wednesday, the British bank posted a net loss of £106 million ($170 million) in its latest earnings report.

LONDON — The British bank Barclays disclosed on Wednesday that it faced two new investigations by American authorities, including one examining whether the company had violated anticorruption laws in its capital-raising efforts during the financial crisis. The news further hurt the share price as the bank reported weak third-quarter results.

The new joint investigation from the Justice Department and the Securities and Exchange Commission on the bank’s capital-raising efforts follows similar efforts by British regulators. The Federal Energy Regulatory Commission is also investigating the past energy trading activity in the bank’s American operations. The commission’s staff on Wednesday recommended taking action against the bank and levying a $470 million fine. Barclays, which has 30 days to respond to the commission, has said it would defend itself against the inquiry.

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Justin Thomas/VisualMedia, via Agence France-Presse — Getty ImagesAntony Jenkins, chief of Barclays.

“The last three months have been difficult for Barclays,” Antony P. Jenkins, the bank’s chief executive, said on a conference call with reporters.

Shares in Barclays fell 4.7 percent in trading on Wednesday in London.

Mr. Jenkins took over as chief executive from Robert E. Diamond Jr., who resigned in July after Barclays agreed to pay $450 million to settle charges that it had tried to manipulate a key benchmark, the London interbank offered rate, or Libor. In the aftermath, Mr. Jenkins promised to increase the focus on retail banking, shifting away from riskier activity in the firm’s investment banking unit.

Unlike the Royal Bank of Scotland Group and the Lloyds Banking Group, Barclays turned to sovereign wealth funds in Abu Dhabi and Qatar for new capital during the financial crisis. Barclays raised a total of $7.1 billion from Qatar in July and October 2008.

The bank disclosed this year that British authorities were investigating the legality of payments to Qatari investors in connection with the bank’s capital-raising. Barclays said on Wednesday that American regulators were also pursuing similar inquiries, adding that the bank was cooperating.

Despite its net loss, Barclays is making progress as its underlying businesses show signs of improvement. Excluding the adjustments, Barclays said pretax profit rose 29 percent, to £1.7 billion, in the third quarter.

In the face of continued market volatility, Barclays said pretax profit in its investment and corporate banking division more than doubled in the quarter, to just over £1 billion, on a strong performance in fixed income and equities. The European debt crisis, however, weighed on the bank’s retail and business banking franchise, where pretax profit fell 31 percent, to £794 million.

Ian Gordon, a banking analyst at Investec Securities in London, said the decline in revenue in the investment banking division raised some questions about the unit’s performance. He added, however, that Barclays was in a position to win market share, as competitors like UBS moved to reduce trading activity.

“As others pull back,” Mr. Gordon said, “there’s a potential to win a greater share of the piece.”

Barclays warned, however, that difficulties in Europe and uncertainty in global markets could weigh on future profitability. “We continue to be cautious about the environment in which we operate,” the bank said in a statement.

Given the challenging environment, Barclays is moving to insulate its businesses. The bank said it had reduced its presence in heavily indebted countries. The bank said it had cut its exposure to the sovereign debt of Spain, Italy, Portugal, Greece and Cyprus by 15 percent, to £4.8 billion.

It is also bolstering its capital to protect against potential losses. The bank’s core Tier 1 ratio, a measure of its ability to weather financial shocks, rose to 11.2 percent at the end of September from 10.9 percent at the end of the second quarter.

This post has been revised to reflect the following correction:

Correction: October 31, 2012

An earlier version of this article misstated the pretax profit Barclays attributed to its retail and business banking franchise. It was £794 million, not £794.

Article source: http://dealbook.nytimes.com/2012/10/31/barclays-reports-third-quarter-loss-on-credit-charges/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: conference call, share price, third quarter results

DealBook: British Regulator Fines Einhorn in Insider Trading Case

January 25, 2012 by NewsMaker Leave a Comment

Jonathan Fickies/Bloomberg NewsDavid Einhorn, the head of the hedge fund Greenlight Capital.

LONDON – David Einhorn and his hedge fund, Greenlight Capital, were fined $11 million by Britain’s financial regulator on Wednesday after he was accused of using inside information when trading the shares of a British pub chain.

The Financial Services Authority said it fined Mr. Einhorn, who became famous after making vocal bets against Lehman Brothers before that firm’s collapse, and his fund about 3.6 million pounds each for selling stock in Punch Taverns shortly after learning that the company was close to a large equity fund-raising.

“On 9 June 2009, Einhorn was a party to a telephone conference in which it was disclosed to him by a corporate broker acting on behalf of Punch Taverns Plc that Punch was at an advanced stage of the process towards a significant equity fundraising,” the regulator said in a statement. “This was inside information and Einhorn should have appreciated this.”

About two minutes after the conference call, which lasted about 45 minutes and included the broker, Mr. Einhorn and Punch management, Mr. Einhorn gave instructions to sell all of Greenlight’s holding in Punch, a 13.3 percent stake, the regulator said. Over the next four days, Greenlight managed to reduce its holding in Punch to 8.89 percent.

When Punch Taverns, one of the largest pub and bar operators in Britain, announced on June 15, 2009, that it was raising 375 million pounds on the market, the company’s share price fell 29.9 percent. The regulator claims that acting on the information before the fund-raising became public helped Greenlight avoid 5.8 million pounds in losses, or about $9 million at current exchange rates.

In a statement, Mr. Einhorn said: “We believe that this action is unjust and inconsistent with the law and with prior F.S.A. enforcement precedent. However, rather than continue an arduous fight, we have decided to put this matter behind us and concentrate on managing our business.”

Noting that Greenlight did not enter into a confidentiality agreement, Mr. Einhorn added that “we didn’t believe in 2009, and we don’t believe now, that there was anything wrong with our conduct and our action.”

The regulator said it accepted that “Einhorn’s trading was not deliberate because he did not believe that it was inside information. However, this was not a reasonable belief.”

“We expect someone in his position to be able to identify inside information when he receives it and to act appropriately,” Tracey McDermott, director of enforcement and financial crime, said. “His failure to do so is a serious breach of the expected standards of market conduct.”

The regulator contends that the conference call had provided Mr. Einhorn with three pieces of information. The broker hinted that the amount of the equity issuance would be about 350 million pounds, that the sale would happen within a week and that the fund-raising was highly likely to go ahead, the agency said.

In an e-mail to Greenlight investors, Mr. Einhorn said the fine and related legal expenses would be paid by the management company and himself without any expense to investors. He also offered investors the opportunity to redeem their investments and said he would open the Greenlight funds to replace any redemptions if needed and possibly to raise additional capital.

While Mr. Einhorn is best known for his bearish bets on stocks — most recently, shorting shares of Green Mountain Coffee Roasters — his fund also takes long positions in stocks, including General Motors and, briefly, Yahoo.

Last summer, Mr. Einhorn was in talks to buy a significant minority share of the New York Mets. That deal, however, broke down.

Article source: http://feeds.nytimes.com/click.phdo?i=7ee874fc7188014c3fde841c2c79a276

Filed Under: Business News Tagged With: british pub, corporate broker, share price

DealBook: Roche Bids $5.7 Billion for Illumina

January 25, 2012 by NewsMaker Leave a Comment

11:23 p.m. | Updated

Roche Holding made a $5.7 billion hostile bid late on Tuesday for Illumina, a provider of genetic analysis services, going directly to the company’s shareholders after months of failed efforts to begin deal talks.

The Swiss drug maker said that it would pay $44.50 a share in cash through a tender offer. That represents an 18 percent premium to Illumina’s closing share price on Tuesday. It’s also 63 percent higher than Illumina’s closing price on Dec. 21, when Roche said market rumors about a potential offer began to arise.

But Roche said that it has been stymied by Illumina’s unwillingness to enter deal talks. Roche had sought to begin negotiations about six to eight weeks ago, according to a person briefed on the matter who was not authorized to discuss the private negotiations.

Roche said that it planned to nominate director candidates and other corporate governance proposals that could give it control of Illumina’s board. But Roche added that it would prefer to strike a consensual deal. (In 2008, the company pursued an initially hostile bid for Ventana Medical Systems, before winning over the diagnostics company with a $3.4 billion offer.)

Severin Schwan, Roche’s chief executive, said in a statement: “Roche’s all-cash offer of $44.50 per share represents full and fair value for Illumina and we expect that Illumina’s shareholders will welcome the opportunity to sell their shares at a significant premium to current market prices.”

Jay T. Flatley, the chief executive of Illumina, declined to comment on Roche’s offer. “Obviously we just got it, and it has to be evaluated by our board of directors,” he said in a brief telephone conversation Tuesday night.

By buying Illumina, Roche is hoping to bolster its diagnostics business by adding one of the biggest players in genetic sequencing, a field that has gained prominence over the past decade. Illumina is the leading vendor of the current generation of high-speed DNA sequencing machines, with over half of that market.

Sequencing has been used until now mainly for research projects aimed at understanding genomes. But as the cost of sequencing plummets, it is beginning to be used for medical diagnosis. Cancer centers, for instance, are starting to sequence numerous genes in patients’ tumors to help select the most effective drugs. In a few cases, mysterious diseases in infants have been diagnosed by sequencing their genomes.

That means that sequencing is becoming an increasingly important part of the diagnostics business, one of Roche’s mainstays. Roche acquired another sequencing company, 454 Life Sciences, several years ago but those machines have a small market share compared to Illumina’s.

Still, Roche would be buying Illumina at a time its business faces threats from new competition.

One rival, Life Technologies, is making gains with inexpensive sequencers that can do some simple jobs in less than a day. And while Ion Torrent’s machines lack the capacity of Illumina’s, they are far less expensive, starting at around $50,000 compared to about $700,000 for Illumina’s main product, the HiSeq 2000. Illumina has countered with a smaller cheaper machine called the MiSeq.

Other technologies are in development that could sharply lower sequencing costs. Sequencing an individual’s entire genome now runs to only a few thousand dollars. That figure is rapidly heading toward $1,000, a level that would make whole genome sequencing practical for many medical uses.

Meanwhile, there are concerns that federal budget problems will lead to decreased spending by the National Institutes of Health and other government agencies on DNA sequencing projects. Those concerns have contributed to a decline in the stock prices of Illumina and some other DNA sequencing companies.

Illumina’s shares have dropped nearly 46 percent over the last 12 months, giving it a market value of $4.6 billion.

Roche plans to pay for the deal with a combination of cash on hand and new debt. The company said its offer was not conditioned on financing.

Roche is being advised by Greenhill Company, Citigroup and the law firm Davis Polk Wardwell.

Article source: http://feeds.nytimes.com/click.phdo?i=c36b6a1fe1936555817755b70a1fdf29

Filed Under: Business News Tagged With: dealbook, flatley, share price

BP Earnings Slip 3.7% on Lower Production

October 25, 2011 by NewsMaker Leave a Comment

Earnings adjusted for one-time items were $5.3 billion in the three months that ended in September, compared with $5.5 billion in the same period a year earlier. Analysts polled by Reuters had forecast earnings of $5.03 billion on average.

BP said it planned to sell another $15 billion worth of assets by the end of 2013 in addition to the $30 billion it has already announced. Net income excluding one-time items rose to $4.9 billion in the third quarter from $1.8 billion in the same period a year earlier on lower costs to cover the company’s response to a disastrous oil spill in the Gulf of Mexico in 2010.

BP’s chief executive, Robert Dudley, has spent the past year repairing BP’s reputation and safety record after an accident on an offshore rig caused the oil spill, while also seeking new exploration projects. BP plans to increase investments in exploration and focus on areas such as operations in the deep water and the management of giant oil fields. Some analysts have questioned whether that would be enough to restore BP’s share price to the level before the accident. The company’s shares traded Tuesday morning in London around 457 pence, or $2.85; they closed at 655.40 pence on April 20, 2010, the day of the explosion.

“This company has been steadied, turned around and now, this month, with high-margin assets returning onstream, we have reached a clear turning point,” Mr. Dudley said in a statement. “Our operations are regaining momentum and we are facing the future with great confidence.”

Mr. Dudley said he expected investments in new exploration projects and the end of payments to the Gulf of Mexico Trust Fund to increase cash flow by about 50 percent by 2014. The forecast is based on a oil price of $100 per barrel, compared to an average oil price for the first nine months of this year of about $112 per barrel.

Production levels improved particularly from Angola, the North Sea and the Gulf of Mexico, Mr. Dudley said. In a first sign that BP would be allowed to continue drilling in the gulf, the Obama administration last Friday approved BP’s plan for four exploration wells off the Louisiana coast.

It is still unclear how much BP will end up paying for costs related to the 2010 explosion on the Deepwater Horizon oil rig that killed 11 people and leaked billions of barrels of oil into the ocean. BP so far has put aside $41 billion to cover costs.

BP was the first major oil company to report third-quarter earnings this week. Royal Dutch Shell and Exxon Mobil are set to report figures on Thursday, followed by Chevron on Friday.

Also on Tuesday, BP named Brian Gilvary, 49, to become chief financial officer at the beginning of next year. He will replace Byron Grote, 63, who had been in the job since 2002. Mr. Grote is to remain on BP’s board as executive vice president of the corporate business activities. Mr. Gilvary is currently deputy group finance chief.

Article source: http://www.nytimes.com/2011/10/26/business/global/bp-earnings-slip-3-7-on-lower-production.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: first nine months, safety record, share price

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