IN THE PAPERS
In The Papers 13 January
Dell workers may qualify for EU grants | Sony may post year-end loss
The Irish Independent says that PC maker Dell has agreed to pay USD3.35 million in a settlement of allegations that the firm misled consumers on financing, warranties and rebates. US state attorneys general said that Dell had engaged in "deceptive" financing promotions.
In other news of Dell, the Irish Examiner says the company made pre-tax profits of almost USD100 million at one of its Irish subsidiaries last year. In the year to 1 February 2008, Dell Products saw turnover grow 22 percent, or USD2.6 billion, to USD14.2 billion. Pre-tax profit rose from USD52.3 million to USD99.91 million in the year, while gross profit was USD1.9 billion, up from USD1.4 billion. Dell said the revenue growth was due to higher demand for mobility products such as laptops.
Separately, the paper says there is optimism that the 1,900 workers made redundant by Dell will qualify for special EU grants to help them re-enter the jobs market. The Government has been in touch with employment and social affairs officials in Brussels about tapping into a special EUR500 million fund. However, the Government would have to match any money available from the EU's globalisation fund and it would have to be spent on new jobs, training and upskilling. The funding can last for up to 12 months and would also be available for workers laid off in supplier businesses affected by the Dell cutbacks.
According to the Financial Times, shares in Sony fell 8.9 percent in Tokyo trading following local media reports that it will post a JPY100 billion (USD1.1 billion) operating loss in the year to March 2009. "It's possible, given the tough pricing environment we saw over Christmas," said David Gibson, an analyst at Macquarie Securities in Tokyo. An operating loss would be Sony's first since 1995. The reports add to a widespread belief amongst analysts that Sony may fall into a loss because of the weak economy, intense pressure on prices, the strong yen and the cost of restructuring its electronics division. Sony will release its third-quarter results on 29 January.
The paper also reports that India's Infosys Technologies has beaten market expectations with a one-third rise in quarterly profit, although it trimmed its annual forecast. Infosys said October to December net profit rose to INR16.41 billion (USD336 million) from INR12.31 billion a year earlier. The company forecast revenue for the year to March would rise 11.8 to 12.8 percent in dollar terms, down from October's forecast of 13.1 to 15.2 percent. Infosys said it was not seeing any fallout from the giant accounting fraud at IT outsourcing firm Satyam Computer Services.
In other news related to the Satyam scandal, the Wall Street Journal says that the World Bank has revealed it has barred two other Indian IT outsourcing firms, Wipro Technologies and Megasoft Consultants, from doing work with the bank's headquarters. Last month, the bank revealed it had blacklisted Satyam for eight years. The World Bank said Wipro Technologies was banned in June 2007 for four years for "providing improper benefits to bank staff", while Megasoft Consultants was banned in December 2007 for four years for "participating in a joint venture with bank staff while also conducting business with the bank".
The paper also notes that disk-drive giant Seagate Technology has revealed a surprise management shake-up, replacing Chief Executive William Watkins with Chairman Stephen Luczo. Asked to explain the changes, a Seagate spokesman said only that "the board just felt that at this time Steve Luczo was the right guy to take the company forward." The company also said David Wickersham had resigned as chief operating officer, effective immediately. Seagate confirmed on Monday that it plans to reduce its workforce by about 10 percent.
Free! "In the papers" email newsletter -- get the full text to your in-box every business day. Email firstname.lastname@example.org with 'subscribe' in the subject line.