Wednesday, November 24, 2010

Deere profit beats, company offers guarded outlook (Reuters)

CHICAGO (Reuters) ? Deere & Co (DE.N) reported a stronger-than-expected quarterly profit on Wednesday as sales of its biggest and most profitable tractors and harvesters in North America offset poor demand in Europe.

But the world's largest maker of farm equipment offered a cautious preliminary forecast for 2011 that fell short of expectations.

In light training on Wall Street ahead of the U.S. Thanksgiving holiday, investors seemed to focus on the positive, sending the company's shares higher.

Oliver Pursche, president of Gary Goldberg Financial Services and co-portfolio manager of the GMG Defensive Beta Fund (.MPDAX), called Deere's fourth-quarter results "impressive."

He said he remained optimistic about the company's prospects, despite its guarded outlook, based on its growing business in India and signs of a rebound in its construction and forestry equipment business.

The Moline, Illinois-based company reported a fiscal fourth-quarter profit of $457.2 million, or $1.07 a share, compared with a net loss of $222.8 million, or 53 cents a share, a year earlier.

Sales rose 35 percent to $7.2 billion.

Analysts on average expected Deere to report a profit of 95 cents a share on sales of $6.25 billion, according to Thomson Reuters I/B/E/S.

The company, which also makes equipment used by builders and foresters, said those sales, which tumbled after the financial crisis, rebounded 75 percent during the quarter from record lows.

The company's agricultural equipment line contributed most to the quarterly results. Deere said sales to the U.S. farm sector included "a highly favorable sales mix of larger equipment."

Looking forward to 2011, Deere said environmental regulations and higher costs could make the year a tricky one.

Deere also said it expects higher raw-material costs in 2011 and a less favorable sales mix in its flagship farm division.

As a result, it said it expects a full-year 2011 profit of $2.1 billion. Analysts on average expected $2.42 billion, according to Thomson Reuters I/B/E/S.

The forecast "reflects the complexity of transitioning to these new equipment models as well as increased product costs to comply with the regulations," the company said in a statement.

(Reporting by James Kelleher. Editing by Robert MacMillan)



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Fugitive Comverse CEO settles suit for $54 million (AP)

Jacob "Kobi" Alexander, the former chairman and CEO of voicemail software maker Comverse Technology Inc. who fled to Namibia in 2006 to avoid prosecution over stock option backdating, has agreed to pay nearly $54 million to settle a civil action by the U.S. Attorney's office.

The settlement was filed Tuesday with the U.S. District Court Eastern District of New York. Alexander has agreed to forfeit more than $47.6 million from two investment accounts ? allegedly the proceeds from a stock option manipulation scheme that also involved two other former Comverse executives. The funds will go to Comverse, which will use them to settle shareholder suits related to the backdating allegations.

Alexander also will pay a $6 million civil penalty to the Securities and Exchange Commission.

"Alexander fled halfway around the world, but he was not able to escape the financial consequences of his crimes," Brooklyn-based U.S. Attorney Loretta E. Lynch said in a statement.

The civil settlement does not affect Alexander's status as a fugitive, and extradition proceedings are still pending to get him back to the U.S. to stand trial for criminal charges. Namibia does not have an extradition treaty with the U.S., and Alexander has remained in the African nation fighting in court against the prospect of being sent back to the U.S.

In 2006, the SEC and federal prosecutors charged Alexander and other former Comverse executives, all of whom left the company that year, with a scheme to manipulate stock options for profit. The options' grant dates were allegedly falsified to coincide with a low point in the stock's value, thereby boosting the value of the stock option. The SEC alleged that Alexander also created a slush fund of backdated options by causing options to be granted to fictitious employees, and later used these options to recruit and retain key personnel. Regulators said the scheme resulted in Comverse overstating its earnings for more than a decade.

Woodbury, N.Y.-based Comverse settled charges regarding the allegations of improper backdating of stock options and other accounting problems with federal regulators last year. The company, which didn't admit or deny guilt to the Securities and Exchange Commission, wasn't fined.

In June, a federal judge approved a $225 million class-action settlement related to the alleged stock option backdating with the company and several former officers and directors. That agreement included a $60 million recovery from Alexander. The roughly $48 million announced today will make up the bulk of that, said Alexander's attorney, Jeremy Temkin. The $6 million owed to the SEC will bring Alexander's total settlement payout to $66 million.

Temkin said Tuesday that Alexander "is pleased to have resolved the SEC and civil forfeiture actions and to put these matters behind him." He noted that, as with the other settlements, resolving these actions comes "without any admission of fault on his part."



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AP Enterprise: Rig victims' kin feel left out (AP)

JONESVILLE, La. ? Roy Wyatt Kemp's family is waiting for his headstone, black marble engraved with the deer and ducks he loved to hunt. The grave, however, lacks a body.

Seven months after the fateful Gulf of Mexico explosion that triggered one of history's worst environmental disasters, the 27-year-old rig worker's family knows very little beyond the fact that he never came home. Did he survive the initial blast? Did he suffer? Could he have been saved?

"I wonder every day what happened to my son. I don't think it will ever leave me," said his mother, Peggy.

Without a body, without answers and with only limited financial and emotional support, Kemp's family and relatives of the 10 other workers who died on the BP-leased rig are left to wonder whether the oil giant's promise to "make things right" applies to everyone but them.

From the small towns of central Mississippi to the cotton fields of central Louisiana to the cattle farms of southern Texas, relatives of the men, in interviews with The Associated Press, bemoaned that so much of the public focus has been on the oil spilled rather than the lives lost.

"There hasn't been anybody associated with BP, Transocean or any of them that has sat down and really tried to give you their condolence and tell you what took place," Peggy Kemp said.

As criminal investigations, congressional hearings and finger-pointing mount, the families of the dead want detailed explanations from BP and its partners of exactly how their loved ones perished in the April 20 disaster that ultimately spewed 170 million gallons of crude into the Gulf.

They want accountability for negligence. And they want the world to know that their loss cost them much more than a paycheck.

Thanksgiving will be tough for these families.

The holiday was drilling supervisor Jason Anderson's favorite. He would have turned 36 on Monday. His wife wants to know why the companies cut corners.

"I don't expect anybody to love my husband as much as I love him, and I don't expect anybody to feel the same loss, but I expect them not to let money and dollar signs be above someone's life and someone's family," Shelley Anderson said.

Jason Anderson began preparing a will in February and kept it in a spiral notebook. It sunk with the rig.

BP and its partners on the doomed Deepwater Horizon say they are not indifferent to the families' suffering. When asked to respond to the relatives' claims, the oil giant provided a one-sentence statement saying it extends its "deepest sympathies to the families and friends who have suffered such a terrible loss."

Transocean, the company that owned the rig, has been paying out money to dependents. It also reached long-term settlements with three families and set up a charitable fund that distributed $130,000 to all the families in July. It said it wants to reach "amicable resolutions" with the remaining relatives.

Perhaps the companies' most poignant tribute to the dead was the decision to imprint 11 stars on the well's final cap.

None of the men worked directly for BP ? nine worked for Transocean and two for M-I Swaco, a unit of the oil field services firm Schlumberger. However, BP was leasing the rig and it was the majority owner of the well that blew. The families report receiving no compensation from BP and say they have had little contact with the company beyond condolences offered at a May memorial service.

Most of the families said the money they received falls well short of compensating them for their losses.

Seven weeks ago, M-I Swaco ended support payments and health insurance for Michelle Jones, wife of mud engineer Gordon Jones, she said. A day after learning about The Associated Press' planned story, the company told the Jones family it would resume payments but did not say anything about health insurance, said Gordon Jones' brother, Chris.

The mother of Blair Manuel, the other M-I Swaco employee killed in the explosion, also said the company cut off payments.

In a statement, Schlumberger said it has provided financial support to the families and is "continuing to do so." Both families say that, as of last week, they had received no further support payments from M-I Swaco.

Because the deaths happened on the high sea, a 1920s law could limit the companies' liability to their workers' lost earnings rather than their families' pain and suffering.

Transocean filed a federal court petition May 13 seeking to limit its liability, arguing it didn't cause the disaster and shouldn't be responsible for injuries or losses. The petition listed relatives of the dead as potential claimants.

Shelley Anderson learned of the petition the day after Transocean CEO Steve Newman came to her house a few weeks after the explosion to offer condolences.

After the petition, she said, "I knew he wasn't being sincere."

Transocean said it filed the petition at the instruction of its insurers to preserve coverage.

Hardest of all for the families is the lifetime loss of love and support.

Courtney Kemp and daughter Kaylee, who turned 3 a few days before the explosion, would count the days until her husband returned home from the rig.

"That was probably the hardest thing, telling her that daddy wasn't coming home. It's a lot for a little girl to handle," the widow said.

Michelle Jones' 6-month-old son Max, born three weeks after the explosion, never saw his father, Gordon. The Baton Rouge, La. man had arrived for his 21-day stint on the rig the day before the blast.

Six of the 11 dead had been scheduled to get off the rig the day after the explosion, after spending three weeks aboard. They were Kemp of Jonesville, La., Adam Weise of Yorktown, Texas, Karl Kleppinger of Natchez, Miss., Shane Roshto of Liberty, Miss., Donald Clark of Newellton, La., and Dewey Revette of State Line, Miss.

Also killed were Anderson of Midfield, Texas, Manuel of Gonzales, La., Aaron Burkeen of Philadelphia, Miss., and Stephen Curtis of Georgetown, La.

At 22, Roshto was the youngest of those who died. His wife filed a lawsuit after the explosion that said she was suffering from post-traumatic stress disorder.

Kleppinger's grandmother, Barbara Thornhill, said of Thanksgiving without her grandson, a veteran of the first Gulf War, "We'll just miss him and know that he's in a good place."

Weise's mother, Arleen, now looks after her son's Texas home, where the heads of deer and snake skins the avid hunter collected adorn the living room wall. Outside sits her son's souped-up Ford F250 truck with its supersized tires below an elevated frame. The mother reached an undisclosed settlement with Transocean, but has received nothing from BP.

"They're so much more than 11 men. These were husbands, fathers, sons," she said as she flipped through pictures of her 24-year-old son.

Several of the families are suing for money. But what many want most are answers to their questions, chief among them: What happened to their men?

Michelle Jones wants to know if her husband, who got off the phone with her minutes before the explosion, was scared. "Was he thinking about me?" she said as Max snuggled with a stuffed tiger a few feet away.

Not all the families are angry.

Revette's wife, Sherri, said she has a lot to be thankful for, like the 26 years she was married. "We can't control and change anything, so my philosophy is to stay positive. Things happen for a reason."

Manuel's mother, Geneva, said that while her family has received nothing from BP and M-I Swaco cut off payments after her son's death certificate was issued, money and support have come in from all over. The family received some 300 sympathy cards, and the LSU baseball team sent an autographed baseball to be placed in Blair Manuel's bodiless casket.

Transocean gave bronze hard hats to the families, engraved with the men's names and the inscription, "We will never forget."

Without a body, the Burkeens remembered their son by placing a letter from his mother, a Superman shirt and other mementos in his casket.

His mother knows her son is gone, but still wonders if he floated to an island somewhere and is all right.

Burkeen's sister, Janet Woodson, feels robbed. Her brother died on his wedding anniversary, and four days before his birthday. That whole week will never be the same for the family, Woodson said on a recent day at the cemetery, sobbing uncontrollably while picking dead branches from her brother's bodiless grave.

"Eventually, the environment will take care of itself, the business will return, but those lives will never be back again," she said.



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Americans boost spending as incomes grow (AP)

WASHINGTON ? Americans earned more and spent more last month, a hopeful sign for the economy ahead of the holiday buying season.

Consumers boosted their spending 0.4 percent in October, the Commerce Department said Wednesday. That was up from a 0.3 percent increase in September.

People showed a slightly bigger appetite to spend because their incomes rose 0.5 percent, reflecting a slowly healing jobs market. Incomes didn't grow at all the month before. The increases in both income and spending last month were the most since August.

Even with the pickup, consumers are still shying away from the type of spending needed to dramatically lower the 9.6 unemployment rate.

Normally after a recession, consumers spend more freely. But more than one year after the recession ended, Americans are more focused on getting their personal finances in order. They are paring down debt, watching their spending and building savings.

Americans saved 5.7 percent of their disposable income in October. That was up from 5.6 percent in September and was the most since August. Before the recession, they were saving just over 1 percent.

Federal Reserve Chairman Ben Bernanke and other economists worry that high unemployment, hard-to-get-credit, weak home values and lackluster wage growth are forces that will restrain the growth in consumer spending.

To counter that and try to invigorate the economy, the Fed recently launched a $600 billion program to buy government bonds. By doing so, the Fed hopes to boost stock prices and make loans cheaper, positive developments that could make people want to spend more.

Even faced with all the negative forces, Americans are still buying. That's important because their spending accounts for roughly 70 percent of all economic output. With consumers holding up, fears the economy could slip back into a recession have receded.

In the July-September quarter, consumer spending grew at a 2.8 percent pace, the most in nearly four years.

Leading economists in an AP Economy Survey predict consumer spending will grow at a 2.4 percent pace in the October-December quarter. Consumer spending would need to grow by at least twice that pace to translate into the type of robust economic growth to make a big dent in the nation's unemployment rate.

The nation's unemployment rate has been stuck at 9.6 percent unemployment rate for the past three months. New projections from Federal Reserve suggest that won't change much for a few years.

A gauge linked to Wednesday's income and spending reported showed that inflation is running lower.

Prices for goods excluding food and energy rose just 0.9 percent in the 12 months ending in October. That was down from a 1.2 percent annual gain posted in September. Inflation is running at a pace below the Fed's comfort zone of between 1.5 percent and 2 percent.

The Fed's new economic aid program also is aimed at making sure that very low inflation doesn't turn into deflation. Deflation is a dangerous and prolonged drop in prices, wages and in the values of homes and stocks.



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Nearly 1 in 3 kids want an iPad for the holidays (Ben Patterson)

Not quite sure what your little ones want from Santa this year? Well, industry researchers drew up a list, checked it twice, and guess what red-hot, 9.7-inch gadget came out on top? That's right: the iPad.

In a recent survey of tykes aged 6 to 12, a good 31 percent of them went for broke, telling researchers for the Nielsen Company that they wanted to buy an iPad in the next six months ? or rather, that they were hoping someone else (like, say, their parents) would get them an iPad.

After the iPad, kids expressed the most interest in getting a garden-variety computer, with an equal percentage -- 29 percent, to be exact -- crossing their fingers for an iPod Touch (starting price: $229 for the 8GB version).

About one in four 6- to 12-year-olds hope to get their hands on a Nintendo DS in the next six months, while a new PlayStation 3 caught the eyes of 21 percent of kids in the Nielsen survey ? or nearly twice as many as those pining for an Xbox 360 (with just 12 percent).

Other high-profile gadgets for which kids are crossing their fingers include an iPhone (20 percent), the upcoming Nintendo 3DS (also 20 percent, although children in the U.S. will have to wait until March to get one), the Wii (18 percent), and an e-reader like the Kindle or Nook (11 percent).

As far as the holiday battle of game-console motion controllers goes, the PlayStation Move seems to be winning out, with 17 percent of youngsters in the Nielsen survey saying they wanted the Move versus just 12 percent for Xbox Kinect.

Looking at broader tech categories, about 21 percent of kids said they wanted a smartphone (yup, these are still just little kids we're talking about), with another 21 percent saying they'd settle for a standard cell phone.

About one in five kids would like a new TV set ? in their bedrooms, I'm guessing ? while 16 percent think a Blu-ray player would be pretty cool.

Interestingly enough, priorities change a bit when it comes to kids 13 and up, with a computer topping the gotta-have tech list for teens at 20 percent, with a TV set and a non-iPhone smartphone coming in at 19 percent each.

Only then did the iPad come into play, with 18 percent of teens saying they'd like to get Apple's $500-and-up tablet within the next six months, according to Nielsen.

Not making the list was the gadget I most wanted for Christmas when I was a kid: a Star Trek communicator, which was really just a walkie-talkie with a flimsy metal antenna that (of course) didn't survive Christmas morning. Oh well.

(Chart: Nielsen)

Related:
Kids in the U.S. Eyeing Big-Ticket Tech This Holiday Season [Nielsen Wire]

? Ben Patterson is a technology writer for Yahoo! News.

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Acer?s dazzling, dual-screen Iconia laptop (Ben Patterson)

There's nothing all that special about a 14-inch Windows-based notebook PC these days ? that is, unless we're talking about a laptop boasting two 14-inch displays, with the second screen taking the place of your standard keyboard and doing double-duty as a virtual QWERTY keypad.

Meet the Iconia, which Acer unveiled at a press event in New York on Tuesday. Armed with an Intel Core i5 processor and powered by Windows 7, the Iconia offers the aforementioned dual displays (14 inches, 1366-by-768), not to mention an HD webcam and integrated 3G.

Engadget has a hands-on photo gallery of the six-pound laptop, and no question: The Iconia makes for an eye-catching piece of hardware, all right.

But how practical is it? Well, Engadget notes that the Iconia might be the first Windows laptop with a keyboard that's susceptible to glare, adding that the "hard-to-use" virtual keypad hampers the otherwise "clever" touch interface.

PCWorld serves up more details on the Iconia and the Acer "Ring," a wheel-shaped touch UI that lets you flick and swipe between various on-screen elements, including the QWERTY keyboard, a "gesture editor," image capture and Web-clip apps, a "TouchMusic" player, and other touch-friendly applications.

The Iconia will also let you super-size your Web-browsing experience by extending pages across both of its 14-inch displays, although you'll have to put up with the gap where the laptop's hinge sits.

Other features on the Iconia include VGA and HDMI outputs, 802.11n Wi-Fi, Bluetooth 3.0, and three USB ports (two with USB 2.0, the other using the new USB 3.0 standard).

How much will the Iconia cost, you ask? No hard details on that yet, nor any specific word on when it'll arrive in the States.

Meanwhile, Acer also took the wraps off a pair of Android-based tablets ? a 7-incher and a 10-inch model, both with 1280-by-800 displays and Flash Player 10.1 support, as well as a 10-inch Windows-based tablet.

Also on tap from Acer: an aircraft-carrier-sized Android smartphone with a whopping 4.8-inch, 1024-by-480 display, not to mention an 8MP camera, DLNA media sharing, and "immersive" sound courtesy of Dolby Mobile.

Again, pricing and release dates for the upcoming tablets and smartphone remain sketchy, with Acer saying all three of its new Android devices should arrive around April 2011, while the Windows tablet is slated for February.

Back to the dual-screen Iconia, though. While there's little question that a laptop with a pair of 14-inch displays makes for a fabulous demo, would the thing actually be useful? Personally, I love the idea of a secondary touchscreen for accessing media and switching between apps (indeed, I can't wait to try it in person), but would a virtual QWERTY do the trick when it's time to start typing ? especially considering that the six-pound Iconia is more of a full-on laptop than a tablet?

Let me know what you think.

Related:
Acer reveals Iconia dual-screen laptop / tablet, Clear.fi cloud-based media sharing system [Engadget]
Acer Brings Dual-Screen Laptop to Reality [PC World]
Acer comes out swinging; 7 and 10-inch Android tablets due in April 2011 [Boy Genius Report]
Acer announces nameless 4.8-inch Android smartphone; April 2011 launch [Boy Genius Report]

? Ben Patterson is a technology writer for Yahoo! News.

Follow me on Twitter!



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China restarts rare earth shipments to Japan (AP)

TOKYO ? China resumed exports to Japan of rare earth minerals crucial in high-tech manufacturing after a two-month de facto ban and a Japanese conglomerate announced a major supply deal with an Australian miner that will reduce dependence on Chinese production.

China currently controls 97 percent of the global output of rare earths, needed to produce everything from cell phones to hybrid cars. Resource-poor Japan was given a jolt in September when Beijing imposed a de facto ban after a diplomatic spat, and Tokyo immediately began seeking new trading partners.

News of the resumption came Wednesday as Sojitz Corp., a large Japanese conglomerate, announced a major tie-up with Australian mining company Lynas Corp. to secure supply for the next decade.

"Efforts that aim to diversify the regions and countries from where we import rare earths are intensifying, and I want to increase my efforts even more in this area to demonstrate solid, steady progress," said Japanese trade and industry minister Akihiro Ohata.

Japanese officials said that two ships bearing the minerals had left Chinese ports bound for Japan, signaling that exports had restarted. China has denied a ban, but Japanese companies say exports have been halted by a sudden increase in government inspections and paperwork.

Tokyo's efforts to find alternative supply have included talks with other Asian countries including Vietnam and Mongolia.

In Australia, Sojitz and Lynas have agreed to a deal in which the Japanese conglomerate would get exclusive import rights for over 70 percent of the 22,000-ton capacity at a rare earth mine operated by Lynas, the companies said in a joint press release.

Sojitz has agreed to seek up to $250 million in funding from Japan to develop the project, which is to begin initial operation next year and hit full capacity in 2012.

Japan's diplomatic row with China began in September, when its coast guard arrested a Chinese fishing boat captain after his ship collided with patrol boats near disputed islands.

The collision in the East China Sea plunged relations between the countries to their lowest level in years, despite Japan's eventual release of the boat captain.

China temporarily cut off ministerial-level contacts with Japan, repeatedly summoned Tokyo's ambassador to complain, and postponed talks on the joint development of undersea natural gas fields.



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