Friday, 2 November 2007

Rise in Profits for British Airways

Despite Heathrow being named as the worst airport, which is home to the British Flag carrier, British Airways, BA has reported a big rise in its six month profits, as it continues its cost-cutting programme. British Airways reported pre-tax profits of £593 million ($1.18 billion) for the six months to the end of September, up 26% on the same period of last year.

Costs were down 4% even with predictions that its fuel bill will top £2 billion ($4billion) this year for the first time. British Airways also predicts that the restrictions on hand baggage will be removed soon. The airline gave an update on the development of its new home in Terminal 5 at Heathrow Airport, which is due to open on 27 March 2008 and the first trials involving volunteers will begin this weekend.

British Airways profitability rose slightly due to more passengers paying premium rates, but that was largely offset by currency effects, especially the weakness of the US dollar. Despite the rising price of oil, the airline has lowered its prediction for fuel costs by £20 million ($40 million), but that still means they will be £100 million ($200 million) higher than in the previous year. That should be offset by a predicted fall in non-fuel costs of £100 million ($200 million) in the full year. (source: BBC News)

With the competition still strong between Virgin Media and BSkyB, the latter added 83 000 new customers to its pay-TV service in the first quarter, slightly above expectations, and posted an 11% rise in revenues to £1.18 billion ($2.36 billion). Adjusted operating profit was below expectations, at £150 million ($300 million), due to increased programming and broadband investment, or the percentage of customers who dropped their subscription, which was 11.3%.

Analysts had been expecting adjusted operating profit of £166 million ($332 million), revenues of £1.17 billion ($2.34 billion), netto additions of 81 000 and churn of 11.7%. These predictions are by 11 Reuters Analysts. (source: Reuters)

The unlikely fashion sensation and sought after plastic shoe maker, Crocs, posted a drop by almost a third yesterday after the maker of bright plastic clogs acknowledged that it had missed key Wall Street expectations. The drop represented the biggest one-day decline for the company, whose shares were listed in New York at the beginning of last year. The Colorado-based firm does not only produce lightweight footwear with a “turbo strap” across the heel and featuring an “orthotic foot bed”, but it also produces clothing.

For the third quarter to September 30, the company reported a 130% rise in sales to $256.3 million (£123 million), compared with the same period the year before. Earnings after tax for the three months more than doubled to $56.5 million (£28.25), against $21.5 million (£10.75) for the corresponding period in 2006. That increase was less than some analysts on Wall Street had been hoping for, with revenue growth hindered by the group’s switch to a larger distribution centre in Europe. By lunchtime yesterday the shares had fallen 31% to $51.36 (£25.68) on Wall Street, valuing the company at about $4 billion (£2 billion). The stock was worth about $20 (£10) a share at the beginning of the year. (source: Timesonline) - Crocs wins claim

After losing the bid for Facebook to rival Microsoft, Google fought back and has signed on MySpace (owned by News Corp.), the world’s largest online social network, to its Open Social platform that allows outside developers to write programs for social networking websites. Adding MySpace will give Google a platform and greater strength against fast-growing Facebook, which opened up its site to outside developers in May and has since seen its user base grow to more than 48 million people. Google shares closed at $703.21 (£351.60) last night after reaching a record $707 (£353.5) on Wednesday. (source: Timesonline) - Google surpass Wall Street expectations

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