Hold on! Your PC’s gonna burst in flames!

Nothing can remain isolated in the open market, can it?! And after making its decision public, to recall 9.6 million laptop batteries from the market due to fire hazards, Sony – the world’s second largest consumer electronics manufacturer – felt the heat in its quarterly earnings too! Sony’s second quarter profits for the quarter ended September 2006 fell by a hair-raising 94% to just $14 million from $329 million in the corresponding period during 2005. The profit figures lost sheen owing to the extra added cost of $429 million in relation to the battery recall. Worse enough, all these recent developments have forced Sony to trim its earnings forecast for the year 2007 to such an extent that it represents the lowest since 2002.

Though Sony executives apologised for the inconvenience caused due to the shameful mass-scale battery recall, the company also made it very clear that no one would resign from amongst the top management of the company with an added assurance that all possible measures have been taken to rectify the problem. The faulty batch of laptop batteries, manufactured between August 2003 and February 2006, are being recalled worldwide after reports of some laptops using the Sony battery packs overheating and bursting into flames came to surface. Declining bottom-line has already weakened CEO Howard Stringer’s plan to rebuild the brand’s iconic status, and such incidents only help but tarnish it to the point of no repair!

Lucent posts goodie results!

Lucent Technologies has all the reasons to feel happy with the announcement of its wonderful fourth quarter and fiscal year results, ending September 2006. The company reported revenues of $2.56 billion, a sequential increase of 25% over the previous quarter and a rise of 5% when compared to the corresponding period last year. However, its net income declined marginally from $372 million a year ago, to $371 million. On an annual basis, Lucent pulled in $8.80 billion in revenues in 2006, screening a decrease of 7% from $9.44 billion in 2005. Besides, Lucent hopes to close the merger with Alcatel as the transaction got shareholders’ approval of both the companies on September 7, 2006.

A gift for Amazon’s wonderful quarter...

Disputes over patent infringements are turning out to be a daily affair, especially when we talk about the global Information Technology sector. On October 24, 2006, IBM gave a wonderful legal gift to Amazon. com to make it an occasion worth remembering. Guess what the gift was – a legal suit against the online powerhouse for the infringement of five of IBM’s patents! According to IBM, Amazon.com has knowingly infringed its patents and was informed about the same in 2002, but no interest was exhibited by Amazon to have a meaningful discussion over the issue. After waiting for four years, IBM has finally filed a suit. Interestingly, Amazon has already experienced the patent battle in the past when it filed a suit against Barnesandnoble.com; however, both had settled the dispute mutually in 2002.

Halt to 115 year long heir’s legacy

Sacrificing the pedigree to save the sinking company seems to be the latest agility in demand. Makers of Wrigley’s, the highest-quality chewing gum & confectionery product, observed the legacy of the Wrigley family ending after 115 years on October 15, 2006, when Bill Wrigley Jr. decided to step down. Bill abdicated the throne to William Perez, a former Nike executive. The news propelled Wrigley’s stock price by 13.7%, the highest in 20 years to close at $53.23. Company’s third quarter sales stood prettier at 11% amounting $1.18 billion; worldwide shipment rose by 9%.

Larry Ellison: The Oracle of M&As...

Oracle is on the acquisition spree and as was revealed in its AGM on October 23, this time the target is MetaSolv Software. Oracle has offered $219.2 million in cash for the Texasbased company which provides back-end soft ware for telecom companies. MetaSolv, with definite conviction will allow Oracle to help telecom operators speed the deployment of services to customers which will only further complement the efficiency in service delivery to its strong customer base around the world. The last couple of years have seen Oracle acquiring as much as two dozen companies with total deals valued in excess of $20 billion!

Volkswagen – fallen but not down!

The profits of Europe’s largest car-maker, Volkswagen, fell for the first time in five quarters. Net income fell 92% as compared to the same period last year, to $29.25 million for the quarter ended September 2006, because of costs for making one-time pension payments. However, operating profit of the Volkswagen group grew by a swashbuckling 90% to $1.26 billion! The company also increased its stake in truck maker MAN AG by 5% to around 20%.

How about a ‘Made in China’ car?

After painting the world’s consumer market red with ‘Made in China’ consumer products, the Asian economic power house is all set to enter the automobile market. The foray will be spearheaded by renowned Chinese auto-maker, Changan Auto under the ‘Chana’ branded cars, which will be available in three separ ate variants (mini van, combination and open bed van versions) with a 970 cc 53 bhp engine. The models which featured MPFi engine were showcased at the 24th Sao Paulo car show held between October 19 and 29. The cars will use good storage capacity as a trump card. Priced attractively at $12,700, these cars will definitely prove to be a goodalternative to expensive European rivals.

Sanyo freezes deal with Haier

In a move to revive its lost fortunes, Sanyo Electric Co. Limited on October 27, announced a tie-up with China’s Haier Group in the refrigerator business. The group has also decided to sell its Thai refrigerator plant to Haier. Consequently, a joint venture will be formed in Japan in December when Haier will officially take over Sanyo’s refrigerator design and development operations. Haier and Sanyo are expected to hold 60% & 40%, respectively, in joint venture.

EU: Trade is a ‘two-way street’

The European Union (EU) has urged China to increase access to its domestic markets. EU has asked China to lower the entry barrier and relax restrictions for foreign companies, which are willing to do business in China. EU said that it was Europe's openness to Chinese products that ultimately helped China gain the invincible market shares in consumer products all over the world. So, now it's China's turn to open its market and prove that trade is ‘two-way street’. European Union runs a trade deficit of $133 billion with China, and is currently China’s largest export market in terms of value.

We are waiting for Zune & Vista!

Microsoft’s revenues for the first quarter, ending September, increased by 11% to touch $10.81 billion. Operating income for the quarter stood at $4.47 billion; an 11% increase compared to that of $4.05 billion in the corresponding period the previous year. Strong ‘server & tools’ sales helped Microsoft to post double digit growth in both top-line and bottom-line. Microsoft pegged Q2 revenues in the range of $11.8 billion-$12.4 billion and operating profits at $2.9 billion-$ 3.1 billion in its earnings guidance. Microsoft’s next big bet will be on Zune, which is positioned against Apple’s iPod and will hit the markets on November 14, while Windows Vista will finally reach consumers in January next year after a series of delays.

Hey, now why did you steal my Coke?

Emerging markets like China and Latin America coupled with a hot European summer, certainly helped Coca-Cola to improve its net quarterly profit figures by 14% when compared to last year’s figures (to reach $1.46 billion for the third quarter ended September 29, 2006), but even this wonderful double-digit push couldn’t save it from yet another ‘controversy’ in the Americas! Yes, the two men who had previously have been charged with ‘pinching’ trade secrets from the giant, and selling them to rival PepsiCo. have accepted their crime before a US judge. The two men – Ibrahim Dimson and Edmund Duhaney confessed to the charge of conspiracy and presently stand a peaceful decade in prison and a fine in excess of $200,000 – how about that for a combo deal! A third accused – Joya Williams, former Company Secretary – has been charged with actually lifting the samples from the company source and passing them onto the two men accused. And when the whole world would have guessed otherwise, PepsiCo. informed the officials at Coca- Cola of the developments as soon as they were approached – talk about the business ethics and values in such a competitive environment!

Hurt but not out...

Mukesh Ambani controlled Reliance industries has been quite an attention-monger, lately. Earlier it was the fire at its 33 million tonne capacity Jamnagar refinery and now the retail store foray in Hyderabad. India depends on Reliance and that is pretty apparent from the repercussions that the fire at Reliance had on the Indian economic well being. No sooner than the fire broke out; Indian government was quick to respond by floating a tender for importing 65,000 tonnes of LPG in an event of a shortfall. The fire destroyed one of the vacuum gas-oil hydro-treaters, and as a precautionary measure the adjacent diesel hydro-treater was shut down as well. Hydro-treaters help in the removal of sulphur and are in line to the country's stringent emission norms. Reliance has reportedly formed two task teams which will look into the matter of resurrecting the damaged areas and analysing the accident. The mishap left one dead and another seriously injured. The company did not agree with reports that the fire would actually create LPG shortage in the country. According to the company sources, there would really be no shortfall in the availability of the product and the refinery would meet all its commitments. Fallouts will be minimal and will be contained, if any.

Well, of late, the company is sporting a very good financial status. President P. K. Kapil said in an e-mail to the employees “There will be no impact, whatsoever, on the financial performance of the refinery, or for that matter, in the final products.” On the retail store front, Reliance plans to invest nearly Rs.250 billion in the course of its plan's actuation. It will set up 5-10 stores in Hyderabad within a month and would then expand in other major cities like Delhi, Bangalore and Mumbai. Ambani's close support Manoj Modi, will head the retail venture while Nita Ambani will take care of the branding part. It appears that the company is really not affected by any adversity, no matter how hard it hits the Reliance structural integrity. The resilience showed is truly appreciable, but then this cannot be expected from any other company either.