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Capital & Retail Sector •

The CIMB Group Holdings Bhd, a consumer bank of Malaysia posted RM890.27mil earnings for the quarter ending September 30, a 16.1% drop from its previous year’s RM1.061bil earnings as a result of its CIMB Niaga higher loan damages.

This morning, the banking firm, announced its revenue, which jumped 1.2% to RM3.528bil. Company earnings for every share were at 10.72 sen, lower than the previous 13.91 sen.

CIMB’s operating income for its third quarter improved by 1.3% to RM3.529 billion due to the net interest income increase of 4.8%, which was partially compensated by the non-interest revenue decline of 6.4% as a result of lower free-based revenue and softer markets and treasury from Niaga.

Similar quarter’s net profits were 16.2% lesser at RM890mil, primarily due to CIMB Niaga’s higher loan deficiencies. During the past 9 months ending September 30, company revenue dropped 17% to RM2.906bil. The latest result was attributed to the company’s first 9-month net profit last year, amounting to RM3.502bil that included the CIMB Aviva sale of RM365mil gain and the restructuring charges.

Without exceptional gains, CIMB’s BAU (Business as Usual) 9MFY14 net profit dropped 7.4% year-per-year. The firm’s annual 9MFY14 clear return on average equity or ROE was at 11.6 percent along with a superior equity base after the January new share placement.

Tengku Datuk Zafrul Tengku Aziz, acting CEO, said the current has really been challenging as the company’s BAU profitability was relatively affected by the Indonesian unstable operating conditions due to weakened Rupiah, bringing 36.4 percent on-year decrease in Niaga’s PBT (Profit Before Tax) contributions.

Ares Management has made a declaration that one of its subsidiaries has closed a deal to buy Energy Investors Funds but it didn’t disclose the amount of its newest acquisition.

The leading global alternative asset manager may have become quiet about the financial aspects of the acquirement but there’s just one thing that is very vital–that energy will stay important for the public. Also, Ares Management recognizes that businesses will fall off if there isn’t sufficient supply of energy.

Also, while the company doesn’t talk that much about the amount involved in its acquisition of Energy Investors Funds, Ares Management was able to make the people involved known to the public like Latham & Watkins LLP that took care of the technicalities of the deal and Proskauer Rose LPP that led the legal matters.

Taking over a different company is not a first for Ares Management as it has already added a number of famed names under its bucket since it went public a few months ago. Most of the names added under Ares Management are by the way real estate and financial services companies.

Ares Management believes that the deal that it just finalized with Energy Investors Funds would be the key to its growth. As long as the company makes the right decisions moving forward, there would be more to its $4 billion assets.

This acquisition, just like the past mergers and other investments that the company has made are proofs that marketing decisions are all the time liquid. There isn’t any other sure way of getting a business going but to make developments on it.

J.C. Penney (JCP) has reported last Wednesday that their overall sales significantly decreased during the year’s third quarter. This is mainly due to the current shopping momentum that also significantly dwindled down right after the recent back to school overall sales.

J.C. Penney (JCP) reported an overall loss of about 62 cents for every share, amounting to 188 million U.S. dollars, compared to last year’s quarter that recorded a loss amounting to 1.94 U.S. dollars for every share, which is equivalent to 489 million U.S. dollars, during the previous year’s quarter. Zacks latest Investment Research stated that the reported performance levels were able to beat previous estimates of analyst that forecasted a total loss amounting to 83 cents for every share.

Overall net sales declined to 2.76 billion U.S. dollars from the previous year’s 2.78 billion U.S. dollar third quarter. Overall sales at company stores that open for at least 1 year recorded flat performances.

J.C. Penney (JCP) overall stock increased by almost 8% last Wednesday, but overall post-market earnings levels that were reported shares dropped down to 6% during after trading hours. J.C. Penney (JCP) overall shares have decreased by a total of 15% that started early 2014.

Maglan Capital hedge fund’s president, David Tawil, stated that looking at the current report of J.C. Penney (JCP), especially if one views it in a somewhat survival perspective, one can say that the overall results can be considered ok. He added, though, that if one considers to look at it as a turnaround perspective, it is not that good.

Tencent, a social media company, and an investment firm under Alibaba creator Jack Ma combine 2.8B yuan as an investment, raising their Huayi Brothers Media Corp stakes, while Chinese technology giants push entertainment.

Huayi, producer and distributor of television programs, movies, and music stated that it will issue a 145 million worth of shares so as to raise a sum of 3.6B yuan or 588 million dollars in the Shanghai stock exchange. The company has plans for using cash for some other projects a new movie, including the repayment of bank loans.

Ma’s investment company will purchase 61.76M shares. China’s biggest gaming and social network company, Tencent will subscribe 51.55M shares.

Both entities will each own about 8.08% stake in Huayi, higher by 4.03% for Ma and 4.86% for Tencent. Thus, they will become the second-largest Huayi shareholders after company senior executives.

Huayi stated that the mobile internet business is growing fast, while the relationship between internet companies and media firms is similarly increasing. The relationship with Tencent and Alibaba will strengthen the progress in those areas, respectively.

Strategic agreements with Tencent and Ma have also been signed by Huayi, hoping it will use links of some of the largest internet companies in China so as to build its presence within the electronic commerce, movie industry, and online entertainment, including its presence abroad as Huayi has planned on investing between 120 and 150 million dollars in Studio 8, which is a film industry founded by Jeff Robinov, former president of Warner Brothers.

Abercrombie & Fitch is one of the most authentic retailers of American clothing since the 1890’s until today. But it seems like the sales report has been declining due to some changes in the customer’s demands. And also because of some innovative brand ambassadors that were now out in the market.

The company is now focusing on developing brand new styles that would win the hearts of the teens and loyal customers of branded clothing. The fact that consumers were not focusing on the brand and logo anymore, seems to be a warning for Abercrombie and Fitch. Some brand new fashion ambassadors like Zara and Forever 21 which sells more innovative styles at affordable prices, sets a new trend.

Abercrombie and Fitch is now expanding the line of products they offer, not just clothes, but also offering bags and accessories to win back their loyal customers.

Also, aside from these changing demands of consumers, the visibility of these branded clothes was decreasing because of shorter mall hours. If there will be shorter hours, less people would see the changes and strategies offered by the company.

All were hoping to have Abercrombie and Fitch still be part of the emerging market. Honestly, ANN and GAP were also experiencing the same thing.

Visteon Corporation, an auto parts manufacturer reported a 33% increase in quarterly overall revenue, which was helped by the company’s purchase of Johnson Controls Incorporated’s electronics business.

Overall revenue for Visteon’s electronics business, that manufactures vehicle displays and audio systems, doubled up to $760M during the year’s third quarter that ended last September 30.

Visteon Corporation completed the automotive electronics acquisition of business of Johnson Controls last July.

Timothy Leuliette, Chief Executive of Visteon, stated that the company is expecting record incremental wins because of the company’s new business wins and also re-wins amounting to $2.4B up to $2.8B for 2014.

Visteon clients like BMW, Daimler AG, Ford Motor Corporation, and also General Motors Corporation are clients that also significantly gained from the 3% increase worldwide vehicle overall production during the 3 months that would end by September.

Similar auto parts manufacturers like Lear Corp and also Magna International Incorporated also reported better quarterly profit because of the overall increase in production of vehicles.

The company’s overall revenue when it comes to its climate control business that basically makes cooling and heating systems for various vehicles, increased to a total of $1.21B from last year’s $1.13B.

Visteon Corporation’s overall revenue increased to $1.97B from previous statistics of $1.48B.

The largest US-based luxury homebuilder, the Toll Brothers Inc., posted a 29% increase in its quarterly revenue, selling more homes with higher prices, while the housing demands rockets.

Toll’s shares jumped 1.5% to 32.69 dollars in the premarket trading, saying its orders increased both in dollars and units, a first-time within 4 quarters.

Company CEO Douglas Yearley stated the corporation is pleased with its strong finish towards the fiscal year, and having optimism towards the coming year as improvement in housing demands during the fourth quarter is seen.

During the year’s first 8 months, the housing industry began to struggle due to continuous increase in home prices as well as interest rates. But, the latest data from the Commerce Department indicate the recovery of the housing market, with a 6.3% increase in new home yearly pace in September compared to the 14.4% drop in August.

The company said it was able to finish more homes with a 22% rise to 1,807 during the quarter, and the average selling price increased 6.3% to 747,000 dollars the previous year.

Also, new contracts were made with a 10% increase to 1,282 houses, while the contract value rose 16% to 970.2 million dollars.

Toll’s overall revenue jumped to 1.35 billion dollars from 1.04 billion. Company shares closed at 32.22 dollars on Friday in the NYSE. Up until its closure on Friday, the stock rose about 1% within the past year.

During the third quarter, the Bank of America reported a tripled loss of 232 million dollars, in an alteration, which added legal expenses associated with worldwide investigations into forex trading within major banks.

Global regulators are examining accusations that dealers conspired, manipulating key reference rates within the foreign currency market that creates 5.3 trillion dollars per day, and which is the least regulated in the world.

The bank altered its results, adding 400 million dollars to its legal reserve unit in covering expected reimbursements attributable to forex or foreign exchange. The bank also said the revision was included in advanced meetings with the US regulators in resolving the matter.

The company also stated that Bank of America is under investigation by authorities in Asia, Europe, and the North America, however, did not specify which regulators the company was having talks with.

Financial regulator of Britain has also heightened discussions with 6 major banks over the conspiracy and manipulation allegations, setting up a group payment, which could cost 2 billion pounds or 3.26 billion dollars.

He Citigroup Inc. stated last month that it was saving 600 million dollars in covering legal charges during the third quarter as regulatory inquiries are rapidly evolving.

The additional charges extended the bank’s net loss of 232 million dollars or 4-cent per share, compared to the 70 million or one-cent per share net loss, which was reported on October 15.

The company’s litigation-related losses forecast lowered to 3 billion dollars from the 5 billion. Company shares dropped 1% at 17.23 dollars in extended trade.

Prysmian, based on Italy, and the world’s largest cable maker, posted on Thursday a 20% drop in its 9-month earnings, however, confirmed a full-year regulation for its consolidated profit.

Italy’s Prysmian said economic conditions continuously became difficult as other Latin American nations experienced a slowdown, and the European recovery continued to stumble. Simultaneously, the tensions within the Middle East were damaging the business, making it hard to finish some orders.

The company stated that in order to recover from such struggles, it has planned on closing two European plants towards the year-end, adding 3 more ending activities in 2015.

Valerio Battista, company CEO said many plants are no longer efficient through a fixed-cost perspective. Battista also stated that Prysmian will move towards a structure of the regional supply chain so as to better compete with rivals that are operating in low-cost nations.

In 2011, the company became an industry leader, taking the lead over Draka, which operates 91 plants in 50 nations currently.

Based on EBITDA adjustments, the company’s full-year fiscal would become very low, according to the CEO, indicating a range between 506 and 556 million euros.

In August, the company also cut its 2014 core earnings estimate, fearing investors that another reduction may be declared on Thursday.

Adjusted earnings before EBITDA for January to September dropped to 355 million euros, marginally in proportion to analysts’ estimates of 352 million euros. Meanwhile, sales were flat at 5.014B euros during the first 9 months, and expected to increase nearly 2% of the entire 2014.

The McDonald’s Corp’s sales missed the average expectation of analysts in October, McDonald’s said on Monday, and worries remain as it is continually in search of the best recipe so as to compete against famous food chains that sell fresh food.

Sales of newly-opened and at least 13-month operating McDonald’s restaurants dropped 0.5% as the largest fast food chain in the world continues to compete in the extremely tough industry, including the European political and economic turmoil, and the aftermath created by a supplier scandal in Asia.

Analysts expected an average of 2.2% drop based on Consensus Metrix, a research firm. Company sales dropped 1% within the United States, below the analysts estimate of 1.9%. McDonald’s sales have not improved since October last year.

Under CEO Don Thompson’s office since July 2012, the United States have been focused on fresh ingredients as well as customized sandwich toppings as it tried to become more competitive against other food chains like Subway and Chipotle.

Additionally, the company shares remained flat at 95.10 dollars in the early trading. The issue on market share drops in major marketplaces also continued.

Changes occurred as the company also struggled in competing with smaller rivals like Burger King, Chick-fil-A, and Wendy’s.

Sales of the restaurant were off 4.2%  in the African regions Middle East, and Asia Pacific, while analysts estimated a 6.1% decline.

Chinese and Japanese diners shunned the restaurant after a news, exposing the workers’ mismanagement of meat in a China-based supplier of the restaurant. Thus, McDonald’s thrived to find new resources to improve its recipes.

Company sales in Europe dropped 0.7% because of closure in Russia, including the weakening of Russian ruble and euro. However, the European market edges out the US as the company’s top revenue marketplace.

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