The International Herald Tribune

Ford to Increase Its Plant Capacity in India

By HEATHER TIMMONS

Published: July 27, 2011

NEW DELHI — The Ford Motor Company plans to invest almost $1 billion in northwest India, building factories to make nearly a quarter of a million cars a year, company executives said on Wednesday.

The investment is Ford’s latest push into fast-growing markets in Asia and Africa, where it lags other big automakers.

The company’s chief executive, Alan R. Mulally, said this year that Ford aimed to get a third of its sales from these two regions. Ford has been adding factories, rolling out new models and opening dealerships in countries including South Africa and Thailand.

India, where passenger car sales grew 29 percent in the last fiscal year, to 2.5 million, is expected to become¹⁾a critical market over the next decade, Ford executives said Wednesday. Ford expects a “dramatic spike up in India” by the middle of the decade as incomes increase²⁾, said Joe Hinrichs, president of Ford Asia Pacific and Africa, during a meeting with reporters in Delhi.

Ford is investing in the state of Gujarat, because of its probusiness environment and because it has ports, which could allow the company to export from India in the future and to diversify from its existing Indian operations in the south.

Ford plans to build two new factories in Sanand, Gujarat, by 2014 that will employ 5,000 and have the capacity to assemble 240,000 cars and build 270,000 engines. Ford already has operations in the southeastern state of Tamil Nadu that employ 5,000 in manufacturing and 5,000 in back-office work and information technology.

Ford’s performance in India has lagged its performance in other markets. The company sells only 3 percent of all passenger cars in India, compared, for example, with 10 percent of Brazil’s cars.

Ford was the only Detroit automaker to emerge³⁾from the 2009 recession without going into bankruptcy. And on Tuesday it reported its ninth consecutive quarterly profit, although its rebound was showing signs of slowing.

“Because we came out of the crisis much stronger financially, we now can make long-term investments, and that is what we are doing,” Mr. Hinrichs said.

Notes:

1)См. Раздел “Грамматические трансформации в переводе” п 4.2 стр.408 “Инфинитивные конструкции”

2) См. Раздел “Грамматические трансформации в переводе”п.9.7 стр.422 “Служебные слова “as”

3) См. Раздел “Грамматические трансформации в переводе” п 4.1 стр.407 “Инфинитив в различных функциях”

Part 1 Unit 2 Section 3 SALES. THE BOTTOM LINE ON MARGINS

The International Herald Tribune

Sony Slashes Annual Profit Forecast After Posting Quarterly Loss

By HIROKO TABUCHI

Published: July 28, 2011

TOKYO — Sony slashed its annual profit forecast after sinking to a 15.5 billion yen, or $199 million, quarterly loss Thursday, as lingering effects of the Tohoku earthquake, a punishingly strong yen and lackluster TV sales wiped out its bottom line.¹⁾

The electronics and entertainment company, which is based in Tokyo, said in a statement that it now expected net income of 60 billion yen for the fiscal year that ends March 31, 2012, revising an 80 billion yen projection it made just two months ago.

Sony also cut projected sales for the year to 7.2 trillion yen from a previous forecast of 7.5 trillion yen.

The company said that its net loss for the April-June quarter came to 15.5 billion yen, compared with a profit of 25.7 billion yen for the same quarter a year earlier. The loss was significantly higher than a 2.5 billion yen loss estimate in a Bloomberg survey of three analysts.

Sony said that quake and tsunami damage to factories in the Tohoku area came to about 5.3 billion yen for the quarter, though some of that cost would be offset by insurance. It also said the recovery from the March 11 quake was progressing “faster than anticipated.”

Meanwhile, Sony has been battling slow demand for its high-end Bravia TVs amid growing global economic woes and heightened price competition.

Though Sony saw brisk sales in Japan before the country’s switch earlier this month from analog to digital broadcasting, sales in the United States and Europe were sluggish, the company said.

Slower personal computer and video camera sales helped to bring sales of Sony’s consumer products division to 732.3 billion yen, down 17.9 percent from the same period the previous year.

A strong yen — about 13 percent stronger against the dollar in the latest quarter, compared to the previous year — further hurt Sony profits. A strong Japanese currency makes Sony products more expensive, and therefore less competitive, overseas. It also erodes the company’s overseas earnings when they are repatriated.

Sony also suffered a series of hacker attacks on its Web sites and online services, including its popular PlayStation Network, which the company was forced to shut down in April. The network was fully restored earlier this month, but not without damaging the reputation of Sony’s online business.

Sony Ericsson, Sony’s long-suffering mobile phone joint venture with the Swedish telecommunications giant, posted a dismal quarter, with sales down 32.1 percent from the same period last year. Sony blamed the poor performance to a lack of critical components in the wake of the earthquake and a fall in shipments of cellphones as consumers shifted to more advanced smartphones.

Sony’s movie division was a bright spot, with sales up 9.3 percent in the quarter from the previous year to 144.4 billion yen on home entertainment releases of titles like “The Green Hornet.”

Sales at Sony’s music division fell 0.6 percent to 109.6 billion yen, however, despite a new release from Beyoncé and albums tied to the hit American TV show “Glee.”

Still, Sony has two products in its pipeline that it hopes will lift sales. The company has said it will soon sell its first tablet computer²⁾, following a flurry of companies trying to recreate the runaway success of Apple’s iPad. Sonyis also set to introduce³⁾ its next-generation portable videogame player, the PlayStation Vita, later this year.

Shares in Sony fell 1.1 percent to 2,013 yen in Tokyo trading before the earnings announcement. Sony shareshave fallen 30 percent this year, far underperforming Japan’s benchmark Nikkei 225 Stock Average, which has fallen just over 3 percent.

Notes:

1) См. Раздел “Грамматические трансформации в переводе” п.9.7 стр.422 “Служебные слова “as”

2) Tabletcomputer=компьютер-планшетник

3) См. Раздел “Грамматические трансформации в переводе” п 4.2 стр.408 “Инфинитивные конструкции”

Part 1 Unit 2 Section 3 SALES. THE BOTTOM LINE ON MARGINS

The International Herald Tribune

Exxon Earnings Rise 41%

By THE ASSOCIATED PRESS

Published: July 28, 2011

NEW YORK (AP) — Exxon Mobil Corp. said Thursday that higher oil prices and improved refining margins boosted its second-quarter profits 41 percent.

The largest publicly traded oil company reported earnings of $10.68 billion, or $2.18 per share, for the three months ended June 30. That compares with $7.56 billion, or $1.60 per share, for the same part of 2010. Revenue grew 36 percent to $125.5 billion.

It's the highest profit for Exxon since it set a corporate earnings record of $14.8 billion in the third quarter of 2008. But the results fell short of Wall Street estimates of $2.30 per share. Revenue topped projections of $119.2 billion.

Higher oil prices also boosted earnings for Exxon's European rivals BP and Royal Dutch Shell PLC in the second quarter.

Oil and natural gas prices rose during the quarter, and Exxon took advantage of those increases by cranking up production 10 percent. Its production business increased earnings 60 percent to $8.5 billion.

Much of that added production was in natural gas, however. Natural gas prices rose less than 1 percent to $4.38 per 1,000 cubic feet during the quarter, while benchmark oil prices rose 31 percent to $102.34 per barrel.

Profits dropped, however, for Exxon's international refineries. Profits also dropped 3 percent to $1.3 billion for Exxon's chemicals operation because of lower sales volumes and higher taxes.

Sharesfell $1.71, about 2 percent, to $81.60 in premarket trading.¹⁾

Notes:

1) Premarket trading=a period of trading activity that occurs before the regular market session. The pre-market trading session typically occurs between 8:00 - 9:30 A.M. EST each trading day. Many investors and traders watch the pre-market trading activity to judge the strength and direction of the market in anticipation for the regular trading session=осуществление сделок с ценными бумагами до начала биржевой сессии

Part 1 Unit 3 Section 1 KEY ECONOMIC INDICATORS

Reuters

U.S. Economy Grew Slower in Spring Than Previously Reported

Published: August 26, 2011

WASHINGTON (AP) — The nation’s economy grew at an annual rate of 1 percent this spring, slower than previously estimated, the Commerce Department said Friday. The downward revision is stoking fears that the economy is at risk of another recession.

Fewer exports and weaker growth in business stockpiles led the government to lower its growth estimate for the April-June quarter from the initial 1.3 percent rate.

The economy expanded only 0.7 percent in the first six months of the year, the agency said.

Nine of the last 11 recessions since World War II have been preceded by a period of growth of 1 percent or less, economists note.

“The economy is teetering on the edge of a renewed recession,” said James Marple, an economist at TD Securities. “Any renewed shock could¹⁾push the economy over the edge.”

Economists said the revision had not changed their growth forecasts. Most expect slightly better growth — roughly 1.5 to 2 percent — in the second half of the year.

That level of growth would likely cool recession jitters. But it is not enough to make a noticeable dent in the unemployment rate, which was 9.1 percent in July.

Some economists worry that this summer’s sell-off on Wall Street could hamper growth further if consumers and businesses pull back on spending and investment. The stock market has lost 12 percent of its value since July 21.

There were some good signs in the report. Corporate profits rose faster than in the previous quarter. The decline in business stockpiles suggests factories may²⁾step up production to fill future orders.

The revision also showed consumers and businesses spent a bit more in the spring than in the government’s first estimate. Consumers spent more on health care, insurance and financial services. Businesses bought more equipment and software and invested in more buildings.

Consumer spending was revised up to a 0.4 percent gain, slightly better than the first estimate of 0.1 percent. Still, that is the weakest growth since the final three months of 2009.

People bought fewer long-lasting manufactured goods, such as autos and appliances. Those purchases fell 5.1 percent this spring, the biggest drop since the fall of 2008. That partly reflects a shortage of autos on many dealer lots after the March 11 earthquake in Japan. Consumer spending accounts for 70 percent of growth.

Government spending contracted for the third straight quarter. And spending by state and local governments declined for the seventh time in eight quarters.

Corporate profits remained healthy. They rose 3 percent, up from a 1 percent gain in the first quarter.

Several dismal economic reports have suggested the economy worsened in the July-September quarter, sending the stock market lower.³⁾Manufacturing in the mid-Atlantic region contracted in August by the most in more than two years, a survey by the Federal Reserve Bank of Philadelphia found. A Richmond Fed survey released⁴⁾Tuesday and a New York Fed survey last week also pointed to slowdowns in those areas, although not ^as severe.

Still, other reports offer a more optimistic picture. The economy added 117,000 net jobs in July, twice the number added in each of the previous two months. Consumers spent more on retail goods last month than in any month since March. Automakers rebounded last month to increase factory production by the most since the Japan crisis.

Thursday’s report is the second of three estimates the government issues for each quarter’s economic growth. The estimates are updated with more recent data that was not available for the first report.

Notes:

1) См.Раздел “Грамматические трансформации в переводе” п.3.1 стр.401 и п.3.6 стр.406 “Модальные глаголы “could”.
2) См.Раздел “Грамматические трансформации в переводе”п.3.1 стр.401 и п.3.6 стр.406 “Модальные глаголы “may”.
3)/4) См.Раздел “Грамматические трансформации в переводе”п.6.1 стр.417 “Причастие в различных функциях”

Part 1 Unit 3 Section 2 BOOM AND BUST/Part 1 Unit 2 Section 2 SECTORS AND INDUSTRIES

The Financial Times

August 2011

UK industry malaise hits economic recovery

A bleak economic outlook is worsening as manufacturing suffers an "alarming" decline, according to a business survey published today¹⁾.

The malaise engulfing manufacturing has wrecked the recovery according to business advisers BDO²⁾. They point to a rapid fall in business confidence and say companies expect little economic growth over the next six months.

The assessment is more pessimistic than earlier surveys suggesting that while the economy will continue to falter a "double dip" recession will be avoided. It reflects data from 11,000 companies employing³⁾5m people and includes findings from CBI⁴⁾surveys, the Bank of England and the Institute of Purchasing and Supply.

BDO's manufacturing output index – measuring orders on hand and an early indicator of the manufacturing outlook over the next three months – fell to 93.9. This is below the 95 level which indicates contraction of the industry and is the lowest measure since October 2009.

The manufacturing optimism index has remained below the 95 level for two months, leading BDO to conclude that manufacturing will remain mired in recessionary conditions until early next year.

One of the few manufacturing bright spots identified by BDO is the outlook for wage inflation. The rate of annual pay increases between March and May was held at 1pc compared with 2.1pc in all other sectors.

The services sector is not declining as fast as manufacturing but the main indices suggest zero growth for the rest of the year while BDO finds no comfort in its inflation indicator which has reached its highest level for almost three years.

Peter Hemington, a BDO partner, said: "The rapid decline of the manufacturing sector, championed as the key to a rebalancing of the UK economy, is alarming. The services sector is showing little sign of picking up the slack."

Notes:

1)/3)См. Раздел “Грамматические трансформации в переводе” п.6.1 стр.417 “Причастие в различных функциях”

2) BDO is the award-winning UK member firm of the BDO international network, the world's fifth largest accountancy organisation, with more than 1,000 offices in over 100 countries.

4) CBI(The Confederation of British Industry) is a British not for profit organisation which promotes the interests of its members, some 200,000 British businesses, a figure which includes some 80% of FTSE 100 companies and around 50% of FTSE 350 companies.

The CBI works to promote these interests by lobbying and advising governments, networking with other businesses and creating intelligence through analysis of government policies and compilation of statistics, both in the United Kingdom and internationally through their offices in Beijing, Brussels, New Delhi and Washington DC.

PART 1 UNIT 3 SECTION 4MONEY MANAGEMENT

The International Herald Tribune

September 2011

Global central banks act to help eurozone lenders

Central banks around the world have joined in a co-ordinated action to make more dollars available to eurozone banks, to ease the funding pressures which have built up in recent weeks.

Eurozone banks have struggled to borrow dollars to fund their day-to-day activities as the escalating eurozone debt crisis made them wary to lend to each other. ¹⁾

“The Governing Council of the European Central Bank has decided, in coordination with the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, to conduct three US dollar liquidity-providing operations with a maturity of approximately three months covering²⁾ the end of the year,” the ECB said in a statement.

The euro surged against the dollar and global stock markets jumped as the boost³⁾for European bank funding added to earlier support for Greece from Germany and France.

Today's move to boost bank funding has echoes of the co-ordinated action taken by central banks in September 2008, when the global financial crisis was brought to brink following the collapse of Lehman Brothers.

Peter Boockvar, equity strategist at Miller Tabak + Co in New York, said the move by the central banks was "a positive in that short-term relief is being given but a negative that we are at this state to begin with".

The stress is still there as long as sovereign debt issues aren't dealt with aggressively but this move eases short term funding problems," he said.

The dollar loans the central banks are now making available last for three months.

The ECB already offers seven-day dollar loans every week, and this offer was tapped for the second time in a month on Wednesday. Previously, banks had not used the ECB's dollar operation since February.

The Federal Reserve maintains dollar swap lines⁴⁾ with the ECB and other central banks in order to ensure that they can obtain additional supplies of dollars when needed.

Bank shares extended gains, with French bank BNP Paribas surging 15.9pc, Lloyds Banking Group rising 6.2pc and Deutsche Bank gaining⁵⁾8pc.

Notes:

1)/3)См. Раздел “Грамматические трансформации в переводе” п.9.7 стр.422 “Служебные слова “as”

2)/5)См. Раздел “Грамматические трансформации в переводе” п.6.3“Абсолютная причастная конструкция”

4) Swapline=swapagreement=соглашение о свопах=своп-линия= an agreement between two parties to exchange two currencies at a certain exchange rate at a certain time in the future. For example, if a company knows that it will need British pounds in the future and another company knows that it will need U.S. dollars, they agree to swap the two at the agreed-upon exchange rate. This eliminates the risk that the exchange rate will change in a way that is disadvantageous to one party or the other=обмен платежных обязательств, деноминированных в одной валюте, на платежные обязательства, деноминированные в другой валюте.

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