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Food Grocer Metro Posts Strong Quarterly Profits


metro-groceryCanada’s third largest grocery retailer and distributor Grocer Metro Inc. posted higher than expected quarterly earnings. Metro posted CND $2.6 billion in total sales, up from $2.51 million YoY, netting $81.1 million ($0.73 per share) in total profit, up from $73.8 million ($0.64) year over year in the same period. The company attributed the increase to stores in Quebec particularly performing better than expected. Metro recently underwent major changes with IT overhauls and a new marketing campaign that saw the popular brands Dominion and A&P changed under the primary Metro brand.

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Microsoft Zune Revenue Down, Pays New Tax Debt After IRS Audit


microsoftMicrosoft has just announced today the company will merge its Office Live and Windows Live products under one brand and product. Essentially, Office Live products are productivity extensions that include programs such as Office Live Workspace, Office Live Groove, and Office Live Small Business. Windows Live products are more geared towards consumers and include services such as Windows Live Messenger. The merged software packages will be available by the end of the year and should coincide with the release of Windows 7. Microsoft says the move comes to simplify the user experience.

In other news, Microsoft has just announced the closure of its ACES Studios division, which is the same team that develops one of Microsoft’s oldest offerings, Microsoft Flight Simulator X, which firstly debuted in 1982. Microsoft declined to provide details regarding the future of the product, but affirmed Microsoft is committed to the Flight Simulator franchise despite the closing of ACES Studios. The closure comes as a broader plan by Microsoft to cut costs, including the announced layoffs of up to 5,000 Microsoft employees.

In other news, Microsoft also reported revenue for its Zune portable media player is significantly down. Microsoft said Zune revenue was down $100 million (54% down) from Read the full story

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ING Has Net Loss of EUR 585 million, Sells Taiwanese Subsidiary


ING Insurance Canada (home and auto insurer) has posted net income of $57.3 million this quarter ($0.47 per share), down from $92 million in the same time last year. Underwriting income for ING more than doubled from $29 million to $61.9 million YoY, but the company underperformed (and bearly beat expectations) because of the direct impact of the financial crisis. The company said it has stopped the repurchase of its own shares, it has decreased its common share portfolio by $260 million, increased diversification, and it is now more heavily invested in Canadian treasury bills. ING International has also announced a significant net loss of 585 euros, again, mainly because of the financial credit crisis. No cost cutting plans in Canada were announced, including job cuts, though ING faces increased competition, increases in claims, and also has to deal with the unfavorable capital markets right now. ING has also announced it is selling its Taiwanese life insurance business to Fubon Financial Holding for $600 million USD.

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British Airways Profit Drops 92%


British Airlines is reporting a 92% drop in profit in the first half of its fiscal year despite an increase in revenue of 6.4% to almost £4.8bn. BA’s after-tax profit from April 1 to September 30 fell to £52 million, from £616 million. The drop in profit can again be attributed to the global economic financial crisis and record high fuel prices. The factors have also resulted in the insolvency of some major airlines. British Airways forecasts its fuel costs to top a staggering £3 billion this year despite the falling price of a barrel. However, the price of oil should become favorable as its expected to further decline. BA also plans to scale back flights to busy areas, so there could be a marginal increase in prices to accommodate the demand given the lower supply, but that may not happen because consumers may use substitutes. Another issue that could see lower profits for BA are bad  investments. BA hedged 80% of its fuel risk by buying futures for kerosene that mature in about 6 months at a strike price of about $95 per barrel, the problem is that the price of a barrel is now lower than $95, so the contract is useless. 80% is also a very material investment. The thing is no one could have forecast such steep declines in the price of oil in such a short amount of time, though I do think the future is looking good for BA once the financial crisis passes and because of lower projectd costs for oil, though of course, the airline industry remains a volitile one and traditionally has marginal profits.

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Warren Buffett’s Berkshire Hathaway Earnings Drop 77% in Q3


Warren Buffett’s company, Berkshire Hathaway, has announced a staggering 77% drop in Q3 earnings to $1.06 billion, as a result to a $1.05 billion investment loss, and declining insurance profits because of the financial crisis. The value of the company declined so much because Berkshire Hathaway’s derivative positions including options and futures, which are tied to the overall markets, declined the most. I think it will get worse before it gets better, and Warran Buffett also thinks the financial crisis will get better, too. That is why Warren Buffett says his company will not sell their derivative positions and he believes they will eventually become profitable, which will take years from now. The results do not take into account the $5 billion investment in Goldman Sachs and a $3 billion stake in General Electric. Aggregately, Berkshire’s net-worth is now at $120.15 billion, down from $120.73 billion YoY.

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