International Business News

PSA Peugeot Citroen, after a first half marked by continued strong sales, think back to a positive operating profit this year despite the difficult months ahead in Europe.

The second European car maker said Wednesday it expected 2010 profit from recurring operations of about 1.5 billion euros after a loss of 689 million in 2009 due wholly to the crisis that hit the area the first half of last year.

"The economic environment has had a significant positive impact in the first half (…) Clearly, this will be less favorable economic environment and will have a negative impact in the second half," warned Philippe Varin, CEO of PSA during a press conference.

PSA Action opened up 1.3% at 25.20 euros on the Paris Bourse, before turning around. At 10:10, the title abandoned 3.32% to 24.05 euros.

"The results are solid and forecasts may reassure, but we wonder if the stock market will not suffer in the second half of the relapse of volumes expected in the automotive business in Europe," wrote analysts at Barclays Capital in a Note."We remain very cautious on the outlook for next 18 months."

PSA has resumed on the first six months of the year with profit from operations, stood at 1.137 million euros after a loss of 826 million a year earlier, with a net profit of 680 million against a loss of 962 million a year earlier.

The first half was also supported by the performance plan unveiled by the group last fall.This plan, which includes cost reductions and income gains, has contributed 854 million euros in operating profit.

Philippe Varin has not ruled out that the goal of contributing 1.1 billion euros to the result of the plan is passed this year.

FOCUS ON INTERNATIONAL

The group's turnover rose by 20.8% to 28.39 billion in the first half, still supported by subsidies still in force and by the success of several new models like the Peugeot 3008 and the crossover sedan DS3 Citroen, which allow PSA to increase its market share in Europe to 14.5% against 13.7% a year earlier.

Registrations of new cars by the first French sales rose 5.5% in the first six months of the year but fell 5.6% on the month of June with the shortness of the effect "scrappage".This was further reduced to 1 July, 500 euros against 700 euros in the first half and 1,000 euros for the whole of 2009.

The loss of aid will be added to the fact that the second half is usually less active than the first for the automotive sector sales, and that the surge in demand in late 2009 with the bonus of 1,000 euros a comparison very unfavorable product from one year to another.

Despite this, the division should be close to self-balance for the second part of the year.

SAP anticipates a decline of 7% of car market in Europe in 2010, slightly less than what he foresaw far.He put forward the emerging countries to find new sources of growth, as China is now its second largest market after France and that it provides a double-digit growth in 2010, and as Latin America where it sees growth significant figure.

To expand its presence in the Chinese market, the group relies on its new joint venture with Chang'An second PSA JV in China, which it expects to receive regulatory approval in early 2011.

The manufacturer hopes to make half of its vehicle sales in markets outside Europe by 2015, against 34% in 2009. The 508 is as such a symbol of the internationalization of PSA.New large sedan planned for 2011, it will be produced in Rennes (Ille-et-Vilaine), but also in China six months later. For the first time, a model for European motorists since its conception has incorporated expectations of Chinese customers.

BP confirmed the upcoming resignation of its CEO, Tony Hayward, widely criticized for his handling of the oil spill in the Gulf of Mexico and its replacement by the American Robert Dudley.

This announcement coincides with a special charge of $ 32.2 billion (24.8 billion euros) related to the oil spill, which plunges the accounts of the British group into the red to the tune of 16.97 billion only for the quarter April-June.

"The tragedy of the explosion and damage wells Macondo environments that ensued marked a turning point," said the group's president, Carl-Henric Svanberg after announcing the departure of Tony Hayward.

"BP is a strong company but will now be (…) a different company."

Robert Dudley, 54, currently in charge of the group's activities in the U.S., oversees efforts to contain the oil spill, considered the worst in the history of the United States, which pollutes the region since the collapse of the Deepwater Horizon platform April 20.

He will be based in London after taking office and will sell the direction of the American branch in Lamar McKey, the company said.

Tony Hayward to take its share towards the non-executive of TNK-BP, BP's joint venture in Russia.He will receive compensation equivalent to one year's salary, or 1,045,000 pounds (1,250,000 euros).

Hayward had angered the U.S. administration for having complained of being overstretched since the beginning of the disaster and for having, during his congressional testimony, tried to dodge responsibility for his group.

Excluding costs related to oil spills and other non-operating expenses, BP poster for the second quarter adjusted earnings of the replacement cost of 4.98 billion dollars, in accordance with Reuters based on estimates of 11 analysts.

Adjusted earnings replacement cost excludes gains or losses related to changes in valuation reserves of fuel and is comparable to net income.

In a separate announcement, BP said its asset sales could reach a total of 30 billion dollars over the next 18 months, which could allow it to reduce its debt by between 10 and 15 billion dollars.

The group said it will review its dividend policy once established results for the fourth quarter.

Schlumberger, a global oilfield services company, reported Friday in an increase in line with expectations, 33% of its quarterly earnings, strong growth of its land in North America offset the effects of the moratorium on drilling offshore in the Gulf of Mexico.

Net income from continuing operations of U.S. group stood at 818 million dollars (632 million euros) over the second quarter, or $ 0.68 per share, against 613 million ($ 0.51 per share) last year.

Turnover rose 7.4% to 5.94 billion dollars.

Analysts on average had forecast earnings per share of $ 0.68 and revenues of 5.915 billion.

In exchange for pre-market action Schlumberger, who finished at 61.30 Thursday, yielded more than 2%.

The moratorium on offshore drilling in the Gulf of Mexico was decided after the explosion and sinking of the platform Deepwater Horizon, operated by BP, which left 11 dead and is causing the worst oil spill from the history of the United States.

But Schlumberger is less affected than, for example, Halliburton, by stopping the activity in the Gulf of Mexico, this region represents only 5% of its turnover.

STMicroelectronics said they expect any slowdown in new orders, after a first half that exceeded expectations, but the difficulties of the ST-Ericsson joint venture have disappointed for the second consecutive quarter.

The European leader in the manufacture of semiconductors published Thursday adjusted earnings of 18 cents per share, which was entered in above expectations, and said providing a sequential increase of its turnover included between 2% and 7% in the third quarter.

"We see today a strong flow of new orders, there is no slowdown," said Group CEO Bozotti during a conference call.

Around 10:10, the title fell by 2.57%, to 6.56 euros, compared with a stability of the sector index of technology stocks.

Several analysts have cited the poor performance of ST-Ericsson, the joint venture between STMicro and Ericsson, to explain this decline.

"The continuing recovery is confirmed in this publication, except for the ST-Ericsson joint venture, where the situation continues to worsen," said one trader.

The subsidiary had already, at the publication of the first quarter, overshadowed the strong performance of STMicroelectronics, and many analysts continue to believe that the recovery of this subsidiary is the main weak point of the Franco-Italian.

"ST-Ericsson is in line with its restructuring plan. A major transition can not be achieved overnight (…).We remain committed to this JV, "said Carlo Bozotti.

The subsidiary has seen its sales drop sharply, while it tries to reposition its product offering, overshadowing the first positive effects of restructuring on the profitability of the JV.

STMicroelectronics has published a turnover up 8.9% sequentially to $ 2.53 billion, while the Reuters Editorial was counting on average quarterly sales of 2.513 billion dollars, on Based on estimates of 14 analysts, and earnings per share of 14 cents, according to 12 estimates.

The group, which had raised its forecast for the end of April the market for semiconductors, has confirmed an expected growth of 20% in 2010.

Major European stock markets finished higher Wednesday for the first time in over a week, boosted by banks and U.S. companies quarterly results.

The Paris Bourse closed up 0.75% to 3493.92 points.

While the results of their strength tests will be published Friday, banking stocks were among the most requested on Wednesday.The Stoxx index of European banking core values thus gained 1.01%.

German Chancellor Angela Merkel said that resistance tests conducted with European banks to help restore confidence in the financial sector.

The maker of Durex condoms and Scholl sandals SSL International has jumped from his side of 33.45% after the announcement of its takeover by the British household products and health Reckitt Benckiser for 2.5 billion pounds ( 2.97 billion euros).

The corporate failures have continued to decline in France in June to register down 7.9% on the entire second quarter compared to the same three months of 2009, according to data published on the news website score3.fr business.

The Observatory for the failures identified score3.fr 13,189 openings procedures from April to June against 14,326 a year earlier, a decrease of 7.9% followed a modest decline of 1.8% in first quarter .

On June alone, the failures are the number of 4677, a figure higher than in May (4310), but down 7.2% compared to 5039 cases in June 2009.

"The improvement is particularly noticeable in the areas most affected by the crisis, namely real estate (-30.4%), manufacturing (-21.2%) or construction (-10.9 %), "said Score3.fr, which belongs to the group of business services Pouey International.

Agriculture and fishing have also seen their bankruptcies decline sharply compared to June 2009 (-44%) but some areas remain, however, the sentence, like business services and administrative support (14.4% ), accommodation and food (+3.2%), or transport failures which rose 1.4% compared to June 2009.

After several positive months, financial and insurance for their part, experienced strong growth in their failures (6%) in June a year ago. Developments in this sector, however, positive throughout the quarter with an average decline of 3.2% of failures from April to June 2009.

The detailed figures are available on the website www.score3.fr.

The International Monetary Fund and the European Union have suspended Saturday program evaluation assistance granted to Hungary in 2008 to enable it to overcome the financial crisis, noting that tough measures must be taken to reduce deficits.

The suspension means that consultations, as the assessment has been completed, Hungary can not access funds that have not yet been used for the loan of 25.1 billion euros earmarked by EU and the IMF.

The negotiations were supposed to be completed by early next week.

According to analysts, the forint, the national currency could fall sharply at the reopening of markets on Monday.The loan from the EU and the IMF now serves as a safety net for Hungary, which is financed on the markets since the end of last year.

"In an environment of increased scrutiny by the markets of government deficits and debt levels, the budget deficit targets previously announced – 3.8% of GDP in 2010 and less than 3.0% of GDP in 2011 – remains a appropriate basis for the necessary process of consolidation and debt sustainability (…) but additional measures will be taken to achieve these goals, "said the IMF.

The new center-right government, based on the April elections, said he wanted to extend the current agreement with the EU and the IMF until the end of 2010 and obtain a new agreement, as precaution, for 2011 and 2012.

The Minister of Economy, Gyorgy Matolcsy said clearly that the government wanted to resume negotiations with its international creditors.

"The government will obviously continue discussions with international organizations, including the EU and the IMF," he said in a statement taken Saturday by the news agency MTI.

'DIFFICULT DECISIONS'

Christoph Rosenberg, who led the IMF delegation to Hungary, said that the international organization requested more details on the budget next year."When we come next time, unless we were coming next week, the government has consistently advanced the budget 2011 and budget will be very important," he told Reuters.

He also said that the IMF had not discussed with the Hungarian authorities for a new funding agreement for 2011 and 2012.

In a separate statement, the EU has indicated that the conclusion of the evaluation had to be postponed and that further consultations would be held.

"Hungary has returned on a path of positive economic growth and record today one of the lowest gaps in the EU.I welcome the commitment of the authorities towards the 2010 target of reducing the deficit, "said Olli Rehn, European Commissioner for Economic and Monetary Affairs.

"However, the correction of the excessive deficit from next year will require difficult decisions, including spending," he added.

Hungary needs to maintain the safety net that provides the loan of the EU and the IMF to maintain the confidence of the markets from which it borrows.The country remains vulnerable to high public debt, which represents 80% of GDP, and its dependence on foreign financing.

"If we do not have the safety net international creditor, it will penalize us where we are most vulnerable," he responded Zsolt Kondradt, analyst at MKB Bank, adding that a decline in the forint is expected Monday.

The Hungarian currency was trading at 282 forints per euro Fridays.

Romania has already had to make tough decisions last month to ensure the disbursement of IMF aid and reassure the markets.

Boeing said that delivery of the first 787 Dreamliner could be delayed until early 2011 instead of the fourth quarter of 2010, flight tests have revealed some difficulties.

Speaking at a teleconference with the press, Scott Fancher, general manager Dreamliner program, however, said the decision to postpone the delivery of first aircraft from All Nippon Airways (ANA) has yet been taken .

"We found some difficulties that challenge our schedule a bit," he said adding that these difficulties were related to issues of "configuration tools".

Around 17:30 GMT, Boeing retreated 0.51% to 64.42 dollars, wiping out a portion of losses just after the announcement of a possible further delay, while the Dow Jones yielded 0.57 %.

If ever the first delivery was postponed again, the behind the original schedule – May 2008 – would exceed two and a half years.

The beginning of the production launch of the plane was delayed five times in three years and the first flight, which occurred in December 2009, had been postponed six times, due to both a lack of parts, problems design and a two-month strike that affected Boeing plants in 2008.

"We want to play the card of caution and say it could be that delivery is delayed to the first part of next year. But at this point, our schedule still provides a delivery by the end of the year "Scott Fancher continued.

Moments earlier, Boeing said it had revised upwards its forecast of orders for new aircraft by 2029, thanks to an increase in the number of LCCs, the replacement of less fuel efficient aircraft and economic recovery.

The U.S. aircraft manufacturer estimates that 30,900 the number of orders over the next two decades, a figure up 6.5% compared to the forecast of 29,000 made last year.

Negotiations on the reform of financial supervision has failed Wednesday and European agreement on the text has been postponed until September, show several European sources.

"There will be no further talks before late August or early September and I think we can say that the talks failed," a parliamentary source said.

"The core issue is Article 6 which concerns the principle of direct supervision exercised at European level by the new supervisors," the source said adding that the objective was to find a consensus with the all states, including Great Britain.

A second source confirmed the report and discussions held that "one or two additional steps the council (of EU ministers) in the direction of the European Parliament would be required to obtain an agreement."

Home sales in Spain rose for the fifth consecutive month in May, according to data released Monday by the Institute of Statistics, a sign of market stabilization.

Housing sales rose 11.9% in May on a year to reach 37,787 units. In one month, the increase is 10.1%.

The Spanish housing market, which had been boosted by lower borrowing rates over the past decade, has collapsed since the start of the financial crisis, affecting the full brunt of the Spanish economy.

At the height of the housing boom, more than 80,000 homes were sold every month.After the bubble burst, this figure fell to touch a low of 29,178 in April 2009.

Despite the recent rebound, the experts polled by Reuters believe that prices will continue to decline in 2010 and during much of 2011.