Michelin reported EUR 5.4 billion in revenue for the third quarter (it only reports full financial results every six months), an increase of 5.7% from EUR 5.1 billion last year, owing to favorable price mix and currency. With more than 40% of the company’s revenue derived from Europe, analysts had been expecting a greater slowdown in volume as well as weaker overall pricing. However, thanks to Michelin’s better-than-expected revenue, declining raw material costs, and favorable pricing, Morningstar has raised its 2012 earnings per share estimate to EUR 9.15 from EUR 8.20. Additionally, they expect raw material pricing to remain favorable…
Author: Thomas Larson
Eaton is finally in the market with its long-awaited benchmark-sized bond offering to help fund the acquisition of Cooper Industries. Eaton is selling 5s, 10s, 20s, and 30-year notes in a 144a offering which will help fund the $5 billion or so debt portion of the Cooper deal. Our rating reflects the higher leverage of the combined firm, with debt/EBITDA close to 3 times up from below 2 times prior to the deal, offset by the positive strategic implication of the transaction. The Cooper deal is expected to close by year-end. Eaton is a highly diversified provider of electrical equipment…
Nokia depends significantly on its partnership with Microsoft, a position that offers some kind of financial support today, but in the long-term it leaves the company exposed to some risks. Microsoft gives Nokia approximately $1 billion each year from for Windows platform support, the money helping to amortize the blow caused by the significant decline in Nokia’s market share. The firm’s phones’ sales have been reduced by more than a half during the last two years, a particularly heavy hit being taken by the smartphone segment. With the margins in the phone business reduced, Nokia lost money during 2012 as it…
The fiscal third-quarter results of European tour operator TUI Travel indicated that the long-held tradition of a family vacation remained resilient amid the economic hardship on the continent. Revenue declined by around 2% on the year to GBP 3.7 billion, mainly due to a 5% currency headwind (in eurozone business) as well as an earlier Easter holiday (at the beginning of April) that resulted in some travel taking place toward the end of the March quarter instead. For the critical summer season, management pointed to strong initial bookings performance in key markets such as the United Kingdom and Nordic regions…