US & World News

Societe Generale on Wednesday posted a net income multiplied by 3.5 in the second quarter of 2010, above expectations, thanks to a decline in its stores and a smaller than expected loss in its toxic assets, and confirmed objectives.

The second French bank by market value after BNP Paribas, says that it achieved a net profit of 1.084 million euros for the quarter ended in June, where the consensus reached by the editor of Reuters expected a general result to 732 million.

His provisions for potential loss on the credit over the period fell by 6% but the rate of decline in the cost of risk is much slower than some of its rivals, reflecting a more cautious speech of SocGen on the strength of economic recovery.

BNP Paribas and British bank HSBC, for example reported Monday in stores near their level before the crisis.

"The economic recovery that began in late 2009 confirmed, but it remains fragile," said Frederic Oudéa, CEO of Societe Generale, said in the statement.

"Especially in Europe, growth prospects remain subdued," he adds.

Penalized by the toxic assets, and author of "profit warnings" on its books of 2009, SocGen tries since the beginning of the year to convince the market of its ability to turn the page on the financial and economic crisis and the of the Kerviel affair.

The new management team led by Frederick since May 2009 Oudéa promised mid-June to double the profits of Societe Generale in two years and is targeting a net profit of six billion euros in 2012 against a target of three billion this year.

The bank is also considering acquisitions but said it does not fund them through capital increases.

Besides the new strategic plan, the results of resistance tests conducted on 91 European banks and the announcement by the Basel Committee's flexibility to draft new banking regulation has been a breath of oxygen to the action SocGen, long shunned by investors.

In the past four weeks, the title, boosted by good news on the European banking sector jumped 40%. Since the beginning of the year, however, still leaves nearly 8% and continues to underperform its benchmark Stoxx 600 European banks.

Danone issued a first-half operating result slightly better than expected and has carefully noted the objective of sales growth for the full year, considering that the crisis would continue to weigh on European consumption.

The food group, which focuses on further development of emerging markets, now provides that its comparable sales will grow at least 6% when he was previously an increase of at least 5%.

He always bet on an increase in operating free cash flow in historical data at least 10% and stability of its operating margin in 2010 compared to 2009.

"We continue to invest in countries, products and brands with strong potential: Child Nutrition in Asia, fresh dairy products in the United States, Brazil, Russia, where Danone and Unimilk merger provides us with very significant growth opportunities long term, "said Franck Riboud, CEO of Danone.

In a statement, he confirms that water and medical nutrition, the group continues "to identify potential for growth in emerging markets and through new models."

At the same time, Danone has continued its efforts to improve productivity, says its chief executive.

The action Danone, with brands ranging from yogurts Actimel waters of Evian, lost 2.23% to 45.285 euros at 9:38, while the CAC 40 0.93% but took the DJ Stoxx European " Food yielded 1.13%.

Commenting on the first half, Francis Priest, CM-CIC Securities, believes they are "good bill" but noted that Danone "remains cautious on the S2 due to a persistently difficult".

The analyst believes that the decline of the title, which takes place in small volumes, reflects disappointment with the failure to raise the target group at the ROC, which the market had anticipated.

INCREASE IN VOLUME OF THE 2ND QUARTER 8.9%

On a comparable basis, the EBIT of Danone rose 2% on a comparable basis to 1280 million euros over the period January to June, showing a margin of 15.30%.His current net income was up 10.1% to 848,000,000 euros.

Turnover amounted to 4.386 million in the second quarter (+6.9%) or 8.364 million in the half. Excluding the effects of exchange rates (+7.0%) and changes in scope of consolidation (+0.1%), it grew 6.9% on a comparable basis in the second quarter.This organic growth is divided into volumes rising by 8.9% and a decrease in value by 2.0%.

Sales rose only 1.4% to 2,420 million euros in Q2 while they increased by 15.3% to 635 million in Asia and 15.9% in the rest of the world to 1331000 .

The consensus Thomson Reuters StarMine, the operating result was expected of 1.265 million euros (+5%) and turnover of 8.261 million (+9.8%), representing an operating margin of 15.3 %.

The fresh dairy products division, which represents 55% of sales in Q2, increased its sales by 6.6% to 2.436 million euros over the period. On the entire first half, the operating margin of this sector appears to 13.94% (-94 bps).The volume effect was positive at 9.3% but the negative value effect of 2.7% due to price reductions made in several countries, Danone said.

The division "Water" (19% of sales) has seen its sales grow by 4.8% to 828 million while its margin declined 75 basis points over the first half to 13.70%.

Sales of the "Child Nutrition" (19.5% of sales) rose 8.7% to 857 million (margin down 27 bps in the first half to 19.19%).

Finally, those of the pole "medical nutrition" increased by 10.8% to 265 million (margin decline of 86 bps to 19.90% in the first half).

Free cash flow from operations increased 34.9% to EUR 858 million, or 10.3% of sales in the first half, against 636 million and 8.5% of sales from the same period of last year.

In turn, capital expenditures totaled 275 million euros, or 3.3% of turnover. This level is below the annual forecast, ranging from 4% to 5% in sales due to a timing effect, Danone said.

Net debt amounted to 3180 Danone million euros in the first half.

* Danone Graph comparing to its competitors:

here

ZenithOptimedia noted for his third consecutive growth forecast for global advertising market this year after surprisingly strong spending by advertisers in the U.S. and Europe in the first half.

The agency purchases of space, a subsidiary of Publicis, now expects growth of 3.5% in 2010 against 2.2% previously, considering that all regions should show some growth, even Europe West.

For France, ZenithOptimedia has raised its forecast to 1.7% in 2010 against 1.1% previously, largely thanks to television which has greatly benefited from the opening to competition of Paris and gambling Online.

"The bulk of the upward revision is in North America and Western Europe (…), But these regions grow more slowly than most emerging countries, "ZenithOptimedia said in a statement, adding that emerging countries should support the growth of the global advertising market in the coming years.

The agency expects growth of 2.4% in 2011 and 2.9% in 2012 in industrialized countries, compared to respective rates of 9.1% and 9.8% expected in emerging markets, with support from Asia-Pacific and Latin America.

For the global market, ZenithOptimedia has raised its growth forecast from 4.1% to 4.5% this year and confirmed its expectations of a 5.3% rise in 2012, after a fall of 10.3% in 2009.

ZenithOptimedia now expects a solid growth of 2.2% in Western Europe this year, despite concerns about the debt of countries in the euro area, against 0.4% previously.It anticipates a gradual increase in advertising spending in 2011 and 2012, according to the request after the entry into force of austerity plans.

HEXAGON A CONTRARIO IN 2011

In France, where business confidence is wavering, the agency expects a slowdown in market growth in 2011 and 2012, unlike the global trend.

The strongest contrast in the forecast from ZenithOptimedia North America, where the agency now expects growth of 1.3% instead of down 1.5%, benefiting from a strong recovery in demand and consumer confidence.

Television has gone through the crisis relatively well advertising, consumers tend to spend more time at home with the development of new technologies such as HDD recorders. Even more dominant in emerging markets, the television should represent 40.8% of the global advertising market in 2012 against 39.2% in 2009.

Internet advertising spending, third medium after television and press, expected to reach 17.1% in 2012 against 12.7% in 2009 to promote the growth of mobile internet and social networks.

JPMorgan Chase reported better than expected results in the second quarter with a decline in provision for credit losses, something that gives hope to investors that things return to normal in the bank.

However, the action declined substantially over 2% as investors aggrieved by his assessment of economic conditions.The KBW bank index was weakening even more, 2.45%.

Moreover, the bulk of quarterly earnings from revenue sources that are not stable, such as reduced bad debt provisions, while in some segments, like the conventional mortgage, there are more and more bad debt, which bodes ill for banks such as Citigroup and Bank of America, which publishes Friday.

Income trading at JPMorgan has declined but it is better than expected, which is perhaps a positive sign for banks such as Goldman Sachs Group and Morgan Stanley, who announce their quarterly results next week.

"The results are just adequate and there is a little less than it seems," said Doug Kass (Seabreeze Partners Management).

The outstanding loans of the bank has continued to decline, showing it is reluctant to risk new loans yet.She says she can not yet assess how the reform of financial regulation will affect its accounts, information, precisely, investors were waiting impatiently.

ONE LESS OPTIMISTIC DG

The CEO Jamie Dimon appeared less optimistic about the future than it was in the first quarter, when he said that the economic recovery of the United States could be solid.

"It is too early to measure the improvement that we observe from now" in the consumer credit, which yields "are unacceptable", he has merely stated Thursday.

"We do not know what will happen to house prices and we believe we are not alone," he later told analysts.

The bank reported a net profit of 4.8 billion dollars (3.7 billion euros) or $ 1.09 per share, against 2.7 billion (28 cents per share) for the corresponding period last year.

Net income for the investment bank fell 6% to $ 1.38 billion. The second quarter was marked by markets that have evolved sawtooth, alternating example falls in the stock exchanges with peaks rising in the bond market.

The income earned by the JPMorgan bond, commodity and currency has dropped 28% to 3.56 billion.The bond trading has been a major driver of earnings of all major banks.

The bank posted a windfall of $ 1.5 billion, or 36 cents per share, due to the reduction in provision for credit during the quarter.Excluding this benefit, the result announced by JPMorgan – 73 cents – more than analysts' consensus that emerged at 67 cents per share, according to Thomson Reuters I / B / E / S.

The bank does not renew every quarter this year discount stores but Jamie Dimon said it was the thing that needed to be done during this quarter.

He said that the bank has a solid liquidity, having repurchased $ 500 million of its shares in the first half, but noted that the bank would be more certain of its capital before increasing its dividend.

Many banks want to raise the dividend but regulators see it a bad eye, which makes more likely redemptions.

The bank said its losses on consumer loans, mortgages, credit cards and other debts had declined in the second quarter both compared to the first three months of the year versus the second quarter 2009.

JPMorgan has finally reported a charge of $ 550 million charge related to the British banking bonuses. She had previously launched a warning on that charge, saying it would be an "important" in the quarter.

Bank of China, one of China's four largest banks, announced its intention to undertake a capital increase, the amount could reach 60 billion yuan (7.0 billion euros).

The bank offers to shareholders to obtain up to 1.1 Right to subscribe for 10 shares held.

"All the products of this rights issue (…) should enhance the bank's balance sheet and improve the ratio of financial solvency of the bank," she says in a statement.

This announcement does not specify whether the parent Public Bank, Central Huijin, subscribe to this offer.

In Hong Kong, under the BoC was trading at 3.97 Hong Kong dollars Wednesday, and he treated at 3.4 yuan in Shanghai on Friday before the suspension of trading.

MASSIVE CAPITAL RAISING

The bank, which raised 4.7 billion euros last month by issuing convertible bonds in Shanghai, is looking like its main rival China to strengthen its balance sheet and to comply with the stringent requirements of regulators in terms of ratios solvency.

Agricultural Bank of China (AGBANK), China's third largest bank, has launched its next capital increase of almost 16 billion euros via an IPO in Shanghai and Hong Kong.

According to local press, Chinese authorities have given their approval to raise capital totaling 287 billion yuan (33.6 billion euros) for the four largest banks.

In recent months, Industrial and Commercial Bank of China and China Construction Bank have also announced increases in capital.

Bank of Communications, the fifth-largest bank, raised its next 2.0 billion euros in Shanghai.