Archive for January, 2009

AT&T, Verizon shares hit by analyst downgrade (Reuters)

Monday, January 5th, 2009 | Finance News

NEW YORK (Reuters) –
Shares of top phone companies AT&T Inc (T.N) and Verizon Communications Inc (VZ.N) fell on Monday after Bernstein Research downgraded their ratings and price targets.

Bernstein analyst Craig Moffett lowered his rating on AT&T shares to "market perform" from "outperform" and lowered the target price to $27 from $35. He cut Verizon's rating to "underperform" from "market perform" and lowered the target to $27 from $32.

"AT&T and Verizon may indeed be somewhat more recession-resistant than most business. But we believe they are nevertheless much more cyclically exposed than consensus estimates (and valuations) would suggest," he said in a report.

AT&T shares fell 4 percent to $28.24, while Verizon shares fell 5.3 percent to $32.80.

Analysts have lately been reassessing the outlook for U.S. telecommunications carriers and their network equipment vendors.

While phone companies used to be considered recession-proof, consumers these days can easily disconnect landlines to go wireless or choose cheaper services. Carriers also require costly investment in new technologies, making them increasingly vulnerable to a downturn.

(Reporting by Ritsuko Ando; Editing by Steve Orlofsky)


Pfizer chief open to acquisitions: report (Reuters)

Monday, January 5th, 2009 | Finance News

(Reuters) –
Pfizer Inc (PFE.N), the world's biggest pharmaceutical group, is open to acquisitions, its chief executive Jeff Kindler told the Financial Times in an interview.

"The real goal is to grow revenues ... We are open to opportunities and constantly looking at those which are big, small and in-between," Kindler told the paper.

Sales of Lipitor, Pfizer's $12 billion-a-year cholesterol fighter, are set to fall in 2011 when generic versions are slated to hit the market.

"We will advance strategies to generate new and diverse sources of revenue growth and cost structures to position us to be strong after Lipitor," Kindler told the paper.

(Reporting by Ajay Kamalakaran in Bangalore, editing by Will Waterman)


HK toy makers urge Li & Fung to pay up for failed US retailer (AFP)

Monday, January 5th, 2009 | Finance News

More than 40 Hong Kong toy makers who say they lost 10 million US dollars following the collapse of US retailer KB Toys said Monday they would be seeking compensation from trading firm Li & Fung.

The manufacturers, who have grouped together to form the Joint Committee for Li & Fung Creditors, said the Hong Kong-listed company should make the payments because it was the intermediary between the US retailer and the firms.

"Li & Fung have stopped paying the manufacturers since July last year. As much as 10 million US dollars (78 million Hong Kong) were involved," said Lewis Luk, spokesman and legal advisor for the group, at a press conference.

"The company, not KB Toys, was the one issuing the letters of credit to the toy makers, and so they should be the ones making the payments."

The group urged the government to intervene and said they would consider legal action if the company refused to respond to their demands.

They estimated that more than 100 Hong Kong manufacturers, employing some 100,000 workers locally and in China, were victims of the bankruptcy of KB Toys, which collapsed in December, citing a sharp decline in consumer sales.

However, Li & Fung insisted that it was only acting as the US retailer's agent.

"The outstanding amounts due to the factories are owed by KB Toys," Henry Chan, the firm's executive director, said in a statement issued after the press conference.

"While Li & Fung recognises the difficulties faced by suppliers, it regards any issues emerging from the KB Toys bankruptcy to be a commercial matter and urges all parties involved to pursue a practical and realistic solution," he said.

Chan added that Li & Fung had approached most of the affected factories to discuss how it could help them deal with the bankruptcy proceedings in the United States.

The statement said the company's exposure as a result of KB Toys' collapse was around five million US dollars, not 27 million as some previous reports have said.

KB Toys, founded in 1922, announced it would close all 461 of its stores, after revealing liabilities of as much as 500 million dollars in the petition filed in a US bankruptcy court.