Archive for August, 2008

Marvell beats Street but posts weak outlook (Reuters)

Thursday, August 28th, 2008 | Finance News

SAN FRANCISCO (Reuters) -
Diversified U.S. chipmaker
Marvell Technology Group Ltd (MRVL.O) gave a conservative
outlook for the third quarter, sending shares lower, even after
it posted better-than-expected profit helped by increased sales
in the wireless and storage sectors.

Marvell, whose chips are used in Apple Inc's (AAPL.O)
iPhone and Research In Motion Ltd's (RIM.TO) BlackBerry, said
on Thursday it is still uncertain of the impact of the
weakening U.S. economy and predicted revenue growth below Wall
Street expectations
.

"They had a strong quarter, which was widely expected, but
the outlook was light," said John Dryden, analyst at Charter
Equity Research.

The company reported second-quarter net income of $71.4
million, or 11 cents per share, compared with a net loss of
$56.5 million, or 10 cents per share, in the year-ago period.

Non-GAAP profit quadrupled to 24 cents a share.

Revenue rose 28 percent to $842.6 million from $656.7
million a year earlier.

The results beat Wall Street analysts' average forecasts of
non-GAAP profit of 21 cents a share and revenue of $836
million, according to Reuters Estimates.

"The results for our second quarter were better than we had
anticipated," Sehat Sutardja, Marvell chairman and chief
executive officer, said in a statement.

Marvell said profit was helped by strong revenue growth
across its range of products led by wireless and storage
products.

WEAK OUTLOOK

The company said it expects non-GAAP profit for its third
quarter to come in between 24 cents and 26 cents a share, which
would be about 13 cents a share lower than GAAP earnings. It
said third-quarter revenue would come in at $860 million to
$880 million.

Wall Street analysts polled by Reuters Estimates have on
average forecast non-GAAP profit of 24 cents on revenue of
$886.8 million for the third quarter.

"The shortfall in October-period revenue is disappointing
due to expectations for market share gains in storage at both
Western Digital and Seagate, which didn't come through in the
outlook," said Dryden.

Marvell Chief Financial Officer Clyde Hosein told Reuters
the company was been "cautious" with its outlook because of
uncertainty with the weakening U.S. economy.

"I would agree we were conservative," said Hosein. "Yet
even with a tepid view of the economy we are forecasting 14 to
16 percent revenue growth year-over-year, which is way ahead of
forecasts for the semiconductor industry."

Marvell shares traded down 50 cents, or 3.4 percent, at
$14.26 following the earnings report, after closing up 32
cents, or 2.2 percent, at $14.76 on Nasdaq.

(Reporting by Yinka Adegoke; Editing by Gary Hill and Andre
Grenon)

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Colorado Springs man settles SEC fraud case (AP)

Thursday, August 28th, 2008 | Finance News

DENVER - A Colorado Springs man and his two oil and gas companies have agreed to pay $510,000 to settle civil fraud allegations, the Securities and Exchange Commission said Thursday.

The SEC alleged that between March 2002 and December 2006, Donald H. Allen and his companies H&M Petroleum Corp. and American Energy Resources Corp. raised about $9.9 million from more than 350 investors nationwide without disclosing that they had never generated profits for investors.

Allen did not immediately respond to a telephone message.

Allen was accused of spending $2.3 million of investor funds to pay for items including a custom speedboat, ski vacations, fitness equipment and jewelry.

The SEC alleged Allen and his companies touted annual returns of up to 354 percent without disclosing the speculative nature of the projections; incorrectly told investors that AER and H&M invested in their own projects; that securities were improperly sold in unregistered transactions; and that Allen acted as an unregistered broker.

Allen and his companies settled the case without admitting or denying the allegations.

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Boeing makes “best and final offer” to union (Reuters)

Thursday, August 28th, 2008 | Finance News

NEW YORK (Reuters) -
Boeing Co (BA.N) said on Thursday it
made its "best and final" contract offer to its largest labor
union
, including concessions the aerospace manufacturer hopes
will help avert a strike.

Hoping to prevent a walkout that could cost Boeing $3
billion a month, the company said its offer would provide an
average of $34,000 in additional wages and incentive payments
over three years to employees in the International Association
of Machinists and Aerospace Workers
(IAM).

Boeing had previously offered $28,000.

The company appeared to make other key concessions, said
Peter Jacobs, aerospace analyst at Ragen Mackenzie in Seattle.

"From what I can see, it does look like it should have a
good chance of satisfying enough of the workers that it
decreases the odds of a strike," Jacobs said.

Boeing is offering workers either 6 percent of gross pay
over the final 12 months of the existing contract, or $2,500,
whichever is greater. It offered a $2,500 ratification bonus if
a majority vote approves the contract on or before September 3.

IAM members are due to vote on the contract on September 3,
when the current 36-month deal expires. Without a new pact, the
union could vote to strike as early as September 4.

The company can avert a strike by getting more than 34
percent of union members to ratify the offer, because a
two-thirds majority of "no" votes is needed to start a strike.

Any strike would further delay Boeing's new 787 Dreamliner,
a key to the company's financial future.

Boeing withdrew proposals to discontinue medical coverage
for early retirees who were hired after January 1, 2010, and to
create a defined-contribution retirement plan for those hired
after January 1, 2009. It also withdrew its proposal to
negotiate a separate contract for workers in Wichita.

The IAM, which represents 27,000 Boeing employees, mostly
in the Seattle area, has rejected two proposals. Spokeswoman
Connie Kelliher said the IAM was poring over Boeing's final
proposal and was not ready to respond.

"We're going over it line by line to catch the details to
know exactly what impact it will have on our members," she
said. "It's 300 pages, the devil is in the details."

"OUR BEST SHOT"

Boeing made its final offer in time for the U.S. Labor Day
weekend to give employees several days to consider it.

Asked what recourse Boeing had if the final offer is not
ratified, Doug Kight, Boeing vice president and lead
negotiator, said only: "We're focused solely on getting a
ratified agreement by September 3rd."

A strike by the IAM could cost Boeing $3 billion a month in
lost revenue if plane orders are not filled. Boeing's
commercial airplanes unit took in $8.6 billion in revenue last
quarter, or about $2.9 billion per month.

During negotiations, Boeing took the unusual step of
presenting its proposals directly to workers on its Web site,
circumventing the IAM. It has run radio ads in the Seattle area
encouraging union members to look closely at the offer.

The IAM has gone on strike against Boeing three times in
the last 20 years.

Boeing shares closed up $1.82, or 2.8 percent, at $66.34 on
Thursday afternoon. The shares have traded in a 52-week range
of $107.15 to $60.77.

(Additional reporting by Nick Zieminski and Scott Malone
and Daisuke Wakabayashi)

(Reporting by Mark McSherry; Editing by Steve Orlofsky,
Dave Zimmerman, Gary Hill)

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