World Business

Analysts’ opinions on stocks in the news Tuesday

From Standard & Poor’s Equity Research

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S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF BIG LOTS (BIG; 31.33):

July-quarter EPS of $0.32, vs. $0.21, beats our $0.26 estimate at the same time that improved incipient markups drove a higher-than-expected 39.3% gross margin. Retail conditions are tough, but BIG describes the close-out buying environment like good. We continue to expect margin expansion in the second half of the year from cost controls and expenditure leverage without ceasing a projected 2% same-store sales produce. We raise our fiscal year 2009 (January) EPS projection by $0.05 to $2.00 only keep fiscal year 2010’s at $2.15. We reiterate our 12-month target worth of $35 on peer-p-e valuation. -J. Asaeda

S&P MAINTAINS HOLD RECOMMENDATION ON SHARES OF CHICO’S FAS (CHS; 4.98):

CHS reports July-quarter EPS of $0.04, vs $0.22, wanting our $0.10 estimate. Gross margin fell 500 groundwork points and SG&A rose 620 basis points on a 7% sales decline, while comp-store sales fell 16%. Despite EPS miss, we heard a number of laid down comments on CHS’s call. At Chicos, Travelers and jackets are showing signs of improvement; accessories and denim are still weak. At White House, dresses and shoes were hearty earnest. Both concepts saw about 200,000 new clients in the July quarter and a advantageous answer to catalogs and direct mail. We reduce our fiscal year 2009 EPS look forward to to $0.26 from $0.34 and maintain financial year 2010 at $0.50. -M. Driscoll-CFA

S&P REITERATES STRONG BUY OPINION ON ADSS OF RIO TINTO PLC (RTP; 374.74):

RTP posts first moiety 2008 profits. per ADS of $17.06, vs. $10.91, on a 115% sales gain, exceeding our $15.11 estimate. Sharply higher profits reflected the inclusion of Alcan and sizable gains in iron ore. On a more optimistic watch on the side of iron ore, we heighten our 2008 earnings estimate to $33.70 from $30.47 and 2009’s projection to $37.50 from $35.88. Our target price remains $570 and assumes that BHP Billiton (BHP; 68.74) will ultimately succeed in its unsolicited stock swap bid to acquire RTP and is likely to again sweeten the offer. -L. Larkin

S&P REITERATES HOLD OPINION ON SHARES OF CORINTHIAN COLLEGES (COCO; 15.35):

June-quarter EPS from continuing operations is $0.11, vs. loss of $0.02, ahead of our $0.08 EPS estimate. COCO benefited from a 12% rise in new student starts and lower operating expenses. Bad debt expense rose, but this was expected amid the ongoing student loan crisis impacting the financial markets. COCO guides to fiscal year 2009 (June) pupil start growth of 7%-9%, revenue growth of 13%-17% and EPS of $0.58-$0.63. We are raising our fiscal year 2009 EPS bulge through $0.05 to $0.60 and our 12-month target compensation to $18 from $16, 30 times that set a price on, in the middle of COCO’s historical p-e range. -J. Corridore

TOKYO —

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Toyota is raising its prices by reason of the Prius and Harrier hybrids in Japan in response to the soaring cost of steel and other raw materials - the first hike here without a model makeover in three decades.

Speculation had been rife that Japan’s top automaker would raise some domestic prices soon, and Toyota has acknowledged that as risky because the domestic market is before that time sluggish.

The new suggested retail prices, announced Monday, show one average increase of 3 percent for the two gas-electric hybrid models, and an average 2 percent of diverse commercial vehicles.

Starting next month, the Prius basic S pattern choose go on foot up by 73,500 yen ($668) to 2.38 million yen ($22,000).

The Harrier Hybrid Premium S Package will go up by 136,500 yen ($1,240) to about 4.76 million yen ($43,000), Toyota Motor Corp. said in a release.

Other Japanese automakers may follow. With steel prices surging, Nissan Motor Co. Chief Executive Carlos Ghosn has hinted he is waiting for its bigger rival to take the lead to make it easier for others to raise their prices, too.

Toyota said it has struggled to keep prices down with require to be paid cuts, but material costs are expected to stay high for more time.

“Recent further price increases in raw materials have been larger than TMC’s require to be paid reduction efforts are able to offset,” it aforesaid.

Like other automakers, Toyota has raised its U.S. prices without major model changes previously.

The the last time time Toyota raised prices on Japan models was in 1974, through 10 percent, in the wake of the before anything else oil shock. It in like manner hiked prices in 1973, by 7 percent, as useful as without interruption its commercial vehicles such as trucks and vans in 1992.

Otherwise, Toyota has not raised prices in Japan except for remodeling that happens barely once each several years in what one. improved features are added.

Although Toyota has averted some of the serious troubles of its U.S. rivals General Motors Corp., Ford Motor Co. and Chrysler LLC, even Toyota is struggling to fight skyrocketing energy prices, the crunch of material costs and fears of stagnation forward global markets.

Toyota, what one. also makes Lexus luxury models and the Camry sedan, reported a 28 percent drop in its April-June quarterly net service.

It is forecasting its first full-year accession of good degeneracy in seven years as it faces greater quantity problems from the weakening U.S. market.

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Good point.

Angst aside, I just had an interesting discussion with Laura Flanders and a man by the name of Dan Slater who's the Vice Chair for the Colorado Democratic Party. We were talking on the eve to what extent the "change" that everyone's being hearing so a great deal of almost is in manifest at the assembly. And I have to say that my initial impression, having been in Boston in 2004, is for what cause surprisingly un-changed things feel. Howard Dean runs the DNC, we have the 50-state strategetics in place and the first black nominee in American history, and yet, for the most part, my brand is that this convention, during the time that perhaps other thing logistically frustrating, is just with regard to what you'd expect: the parties, the many different organizations and constituencies sponsoring events and attempting to drive home their message and, of course, the delirious designate by number of police dressed like something of a dystopic sci-fi movie. It's a salutary reminder that the Democratic party is a self-same old etc., and is therefore subject to a affectionate of painful inertia. Change comes slowly.

That said, beneath the superficies there are signs of a changing party. Obviously there's the presence of the Netroots, camped out mostly in the Big Tent at which place Google is serving free smoothies and offering back rubs. But though I haven't seen any large fourth book of the pentateuch; census of the hebrews on this (I've got an email into the DNC press shop), there are what feels like a lot of new delegates in attendance as well. I ran into two friends from Texas yesterday, both my age, who founded Texans for Obama in advance of Obama had even announced his candidacy and are now members of the Texas delegation. It's their first convention. Dan Slater said that the 80-90%(!) of the delegates in the Colorado delegation were first-timers, which he said was completely new and directly due to the party-building of the Dean DNC and the devotion around Obama.

So time there's nothing revolutionary happening in Denver (aside, of course from nominating the first black man for president) the Democratic party really has changed and is changing. Those changes aren't distinctly ideological at the moment (the party's abject has always been progressive, and to the left of the funders, lobbyists and career politicos), but regionally and demographically.

I'm hoping to get more more demographic knowledge of facts and revisit this topic later.

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Osama bin Laden’s brother wants to construction an 18-mile shape a bridge over that would link Yemen and Djibouti across a strait southward of the Red Sea

by Horand Knaup

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The bin Laden group of genera certainly doesn’t lack for courage. Mohammed receptacle Laden, the father, left behind his by as the illiterate son of a farmer to become immensely wealthy in the construction business. One of his sons, the terrorist Osama, decided to make use of on the superpower America.

And it being so that, Osama’s half-brother Sheikh Tarik has positive that he too would like to go down in history. Tarik, though, has chosen a more peaceful road to prominence, though dramatic in its own right.

To that extreme point, he invited business acquaintances, politicians and investors to the Republic of Djibouti earlier this month. It is a country that is struggling from one side a severe aridity, a place where one in eight commonalty suffer from want nourishment. Sheikh Tarik, though, welcomes these challenges. Indeed, his plan is of a magnitude that could end up bringing exceptional prosperity to the arid country. He envisions a massive bridge connecting Djibouti to Yemen—Africa to Asia—complete with a shiny recent incorporated town on each side.

The 61-year-old, though, left the presentation of his vision to others. During the mid-August show, he sat in a tavern conference room in the front commotion just next to Djibouti’s prime minister, Mohamed Dileita. Tarik wore a white dishdasha and he remained mostly still. Occasionally he would lean over to the prime minister and whisper in his ear.

Sheikh Tarik Bin Laden is the CEO of Middle East Development, LLC, one of the best known building contractors in region. He arrived to the congregation by private jet, befitting a man who does billions of dollars worth of transactions each year on the Arabian Peninsula. His father restored holy sites in Mecca, Medina and Jerusalem—and now Tarik wants to add whole new dimension to his family’s work.

Tarik’s bridge would cross the Bab el Mandeb, the narrow straits where the Indian Ocean feeds into the Red Sea. Bearing a six-lane highway, a railway sketch outline and an oil pipeline, the structure would stretch fully 29 kilometers (18 miles) between continents—an new piece of engineering. Huge pillars would have to be anchored to the sea cover with a floor some 300 meters (984 feet) below the surface. They would be spaced three kilometers apart.

At the hotel presentation, Shiekh Tarik’s arguments in favor of the project were almost in the same manner with grandiose as the bridge itself. His business economist spoke on topics of the like kind as “Issues of the Century,” “New Markets” and “Hub for African Newcomers.”

Grand visions indeed, but the plans for the bridge are already well underway. In the two Yemen and Djibouti about a thousand square kilometers of land have been staked out. Two free-trade zones are slated to be built in that place—and the plan foresees them growing into cities soon thereafter. Within five years, there could be deepwater ports, airports and power stations bringing plenty of jobs longitudinally with them.

Research facilities, universities and 100,000 apartments are to follow within 10 years. And finally, 15 years on, the bridge will associate sum of two units ultramodern cities—ecologically vigorous, low in emissions and above all, innovative.

“In the events to come, it won’t be governments who run cities, but in some measure corporations,” is the philosophy behind Sheikh Tarik’s plan.

In the preliminary phase alone there will have being 60,000 jobs. Up to 850,000 jobs will be created by means of project’s cessation in 2025.

“All eyes give by will be on us,” the dealing manager promises. “Those of the Chinese, the Americans and in the Middle East.”

For the engineers, the defiance presented by the bridge is herculean. The towers will jut 400 meters into the firmament—some 170 meters higher than those of the Golden Gate Bridge. Tarik has besides gotten the Danish engineering firm involved which helped build the Öresund Bridge between Sweden and Denmark.

The excellence attach a tag to, of course, is just of the same kind with big as the engineering challenge. The bridge alone will cost $25 billion. The two cities are estimated to cost at least $175 billion on top of that. Sheikh Tarik himself plans to lay siege to $10 billion of its own money.

But individual question hasn’t thus far been answered: Why? Is the project a masterly piece of far-sighted investment? Does Tarik want to make a generous gesture to Yemen, the native land where he maker was born judgment he emigrated to Saudi Arabia? Or is it an attempt at redeeming his family’s reputation following the ill deeds of his half brother?

Sheikh Tarik isn’t saying. Nor is he or his business manager saying much about the project’s potential snags. And the list is long. Djibouti’s neighbor to the south-east, Somalia, is a blow. Yemen itself is unstable as well and pirates and kidnappers roam the Horn of Africa. And then there is the lack of infrastructure without ceasing both sides of the strait—a build a bridge over only makes understanding if thousands of kilometers of roads and rail are also built.

Doubts, in short, are plentiful, but Tarik’s spokesman insisted that the bulge would be underway by next year at the latest—a quick spring that will be quickly followed by a ferry service and a cement factory. But if altogether goes well, by 2025, the area will look radically different, and on the at that time sparsely populated Yemeni side, some 4.5 million people will behave.

Sheikh Tarik remained silent throughout the with even margins presentation, smiling quietly. “He is a shy living soul,” his business comptroller explained.

Shy, but courageous.

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You have to hand it to John McCain

Superficially, they lambaste Barack Obama’s worshipful crowds and messianic promises that a heavenly “light will gloss down” upon his candidacy. But what the ads really lampoon is what Vanderbilt Professor Dana Nelson calls presidentialism: our paternalistic view that presidents are godlike saviors

“The once-every-four-years hope for the lever pull sensation of republican power blinds people to the opportunities for democratic representation, deliberation, activism and change that surrounds us in local elections,” she writes in her new volume, “Bad during the term of Democracy: How the Presidency Undermines the Power of the People.”

In a country whose anti-royalist founders constitutionally constrained executive authority, what explains the metastatic growth of presidentialism? The evisceration of journalism and social movements.

The media’s Watergate triumph sired the current Age of Stenography. With individual glory the new antecedence, correspondents figured out that transcribing White House prognostication is a far easier way to gain fame than Woodward and Bernstein’s shoe-leather investigations. The result is journalism hie by grotesque sluggishness and meagre theory

Media consolidation and cost-cutting have sped up this decline, turnery many local news outlets into collages of telegraph copy and presidential punditry from D.C. bureaus. Meanwhile, the 21st century’s most eminent model of “grass-roots” movement building is MoveOn.org

The resulting cry reiterates one message: The only thing that matters is 1600 Pennsylvania Avenue.

Why is this full of risk? First and foremost, by the agency of ignoring local elections and issue-based organizing in facilitate of presidential political economy, activists make presidential progress less likely. “Even the best presidents need social movements to accomplish transformational make different,” warns common activist Deepak Bhargava in The Nation magazine’s latest White House-centric edition. “FDR could not have succeeded exclusively of the agitation of the doing nothing workers’ councils and the unions, and LBJ’s greatest accomplishments were made possible by the civil-rights movement.”

Worse, presidentialism leads us to ignore the arenas where issues are before that time being sorted out.

For example, how many of the Democratic convention delegates incensed through the Obama-McCain energy brouhaha have in any degree idea that just beyond Denver’s Rocky Mountain horizon, a strive over Colorado’s massive elastic fluid reserves inclination more immediately impact the national energy crisis than the inane presidential back-and-forth about offshore drilling? Better yet, how many Democratic enthusiasts donning Obama T-shirts know who their state acting for others or city councilor is

In his upcoming book, “You Can’t Be President,” journalist John MacArthur ponders the depressing answers to these kinds of questions, reminding readers of Alexis de Tocqueville’s 19th century writing.

“It is in vain to notify to appear a people, which has been rendered so at the disposal of on the central power, to choose from time to epoch the representatives of that power,” he observed. “This rare and brief exercise of their free precious, however important it may be, will not prevent them from gradually losing the faculties of thinking, feeling and representation for themselves, and thus gradually falling below the level of humanity.”

Published 168 years ago, the passage is a prescient sign as the upcoming Democratic and Republican conventions toast presidentialism’s conquest of democracy in America.

www.credoaction.com/sirota

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KDB said on Friday it was open to the acquisition of an overseas financial foundation, naming Lehman Brothers Holdings Inc (LEH.N) as one of its options. The comments sent Lehman's share price up 12 percent on the day.

"I think that KDB might have considered forming and principal a consortium (to pervert with money Lehman Brothers)," Financial Services Commission (FSC) Chairman Jun Kwang-woo told reporters.

"But it appears burdensome towards a state-run institution to play a leading role (in the purchase of a outward company) and take risks which may be more than pecuniary."

Cross-border acquisitions by South Korean companies should be led by the private sector and state-run institutions such as KDB should act a "cheerleader role," Jun related.

"My point is that state-run institutions may take a catalyst role in pursuing these kinds of deals."

Jun moreover uttered that KDB needed to consider its priorities before pursuing global expansion, pointing out that stabilization of the domestic financial markets might be the greatest part urgent issue.

When asked about the status of KDB's possible interest in Lehman, one of Wall Street's victims of the subprime mortgage meltdown, he said: "That would be one international marriage. Would you get married just after some or brace blind dates?"

KDB has not publicly confirmed that it without circumlocution approached Lehman.

The government is planning to privatize KDB by the agency of 2012, a suit it hopes will help turn it into a global investment tumulus.

(Reporting by Kim Yeon-hee; Editing by Jonathan Hopfner and Jonathan Thatcher)

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When India’s Infosys Technologies today announced a $753.1 the multitude deal to pervert with money the UK’s Axon Corp., it was the biggest acquisition ever by an Indian tech services outfit. The deal also signals how important it is for the Indians to acquire global consulting capabilities and uncorrupt how difficult it is to model that kind of credibility through internal growth.

Axon is a large, independent firm that does one thing and does it well: Providing consulting services for companies that are installing SAP’s many run-the-business applications by reason of corporations. Its main markets are the UK and the United States. With the addition of Axon’s 2,000 employees, Infosys will take more than 4,000 employees focused on SAP technology.

The Indian assiduousness grew up profound based on its ability to provide large-scale, commodity-like services with low prices and relatively high quality. To achieve the nearest level of development and improve pricing leverage, these companies need to be seen as heart skillful at helping large global corporations transform themselves. Infosys is willing to shell loudly more than $700 million in cash for Axon because the combination helps it get that kind of business. “We’re looking towards a larger relationship with our clients,” Infosys CEO Kris Gopalakrishnan told me a couple of hours after the deal was announced. “In order to build something that’s not a commodity, you have to mien at strategic relationships; but for this, price is the only constituent in who gets the deal.”

When I first met Gopalakrishnan a couple of years ago, he confided in me that only about 15% of Infosys’ engagements were strategic for Infosys and transformational in favor of its clients. When I spoke to him today, he estimated that between 25% to 30% of the business fits that definition. The Axon deal, which is supposed to close in November, will move the needle a bit more.

Infosys formed its acknowledge consulting group, Infosys Consulting, four years ago to be augmented its profile and help it land this kind of relationship. But the group has grown a bit again slowly than executives first hoped, and, at the end of the last financial year, in March, it was still losing coin.

So you can regard in what plight Axon helps out. It has different clients than Infosys, so there are opportunities for cross selling. Also, these big transformational deals are oftentimes global in nature. By combining forces, Infosys and Axon can better handle global SAP implementations with multi-year values of $50 million or equable $100 the multitude. Axon also has the right skill dispose: Its consultants are adept at change management and business process re-engineering.

Gopalakrishnan says that in defiance of the global household slowdown, there’s still high-flavored demand for large and complex SAP installations.

That’s encouraging. Typically, at what time relating to housekeeping growth slows, totally in the greatest degree companies be anxious concerning is cutting costs. So if they’re making long-term investments that will help them grow faster or become more profitable, they’ll be stronger as being it when demand picks up again.

And if Infosys helps them through the storm, it decree be seen because a capable partner that be able to be trusted to handle ever more complex transformations. And, if it can do that, it will be in continuance the road to Accenture-Land.

SYDNEY, Australia —

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Australia has approved Aluminum Corp. of China Ltd.’s stake in miner and takeover mark Rio Tinto Ltd., Treasurer Wayne Swan said Sunday.

Swan said he approved the Chinese state-owned society’s acquisition of up to 14.99 percent of the shares in Rio Tinto PLC, the London Stock Exchange-listed arm of Rio Tinto Group. The approval came after Aluminum Corp. of China, also known as Chinalco, bought the shares.

A 14.99 percent stake in Rio Tinto PLC equates to some interest of on every side 11 percent in the pure group, which includes the Australian-listed Rio Tinto Ltd.

Swan said he approved the purchase in continuance the condition that Chinalco not propagate its shareholding above 14.99 percent without receiving new commonwealth approval.

Chinalco also agreed not to seek to appoint a adviser for Rio Tinto PLC or Rio Tinto Ltd. as tardy as its holdings were below 15 percent.

“While Australia welcomes foreign investment in our economy, we will carefully examine national interest issues where these arise in relation to foreign sovereign ownership,” Swan said.

“I esteem determined that the undertakings agreed with Chinalco are gratifying for protecting the national interest in this matter,” he added.

Chinalco issued a statement Sunday saying it welcomed the government’s decision.

Chinalco paid about 15 billion Australian dollars ($13 billion) for its imperil in Rio Tinto PLC, the biggest evermore offshore investment by a Chinese company.

Rio Tinto is currently attempting to fend off a A$163 billion ($142 billion) takeover proposal from the world’s largest miner, Australia-listed BHP Billiton Ltd.

Chinalco has said its move upon Rio Tinto was a strategic investment.

The move stoked speculation that it was prompted by Beijing to block BHP Billiton’s plans against Rio Tinto due to concerns about competition and pricing.

The Australian Competition and Consumer Commission approved the Chinalco investment in February.

The ACCC said Friday that a merger betwixt BHP Billiton and Rio Tinto may raise competition concerns in the global iron ore market.

Demand in succession account of PCs is holding up smooth as the U.S. economy slumps, says S&P analyst Tom Smith

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When the U.S. good husbandry slumps, computer and other hardware sales usually come suit. That’s not happening this year. "It’s surprising that PC sales have held up," says Tom Smith, who follows computer hardware stocks in favor of Standard & Poor’s Equity Research. "There’s something efficient about people and their communication to their laptops."

The latest evidence came from the Aug. 19 proceeds report from Hewlett-Packard (HPQ), which said unit shipments of PCs rose 20% from a year since. This indicates the strong trends in the industry are continuing, Smith says, as consumers and businesses keep buying new laptops with more power, memory, and battery life to horsemanship even more tasks, including storing photos, movies, and music. Faster growth in developing countries is helping offset weakness in U.S. sales for most hardware makers, he adds.

"PC sales appropriate didn’t falter in the first half of 2008," Smith says. "They should have failed already if they were going to."

In turn, shares of computer makers are not suffering as plenteous as the broader mart this year. Year-to-date through Aug. 15, the S&P Computer Hardware index fell 2.1%, vs. an 11.6% decline for the S&P 500 index. In 2007, the sub-industry index jumped 32.6%, compared with a 3.5% rise for the S&P 500.

BusinessWeek.com’s Karyn McCormack spoke with Smith on Aug. 21 about the outlook in favor of computer makers and his favorite public funds. Edited excerpts follow.

Hewlett-Packard reported a good July quarter. What does that indicate for other computer hardware makers in the coming quarters?

It was a nice strong quarter—a explanation thing for HP is that unit sales for PCs were up 20%. What I see here is a continuation of some trends. Overall one shipments of PCs globally remain strong, with almost 15% bourgeoning last year and projected to be considered in the state of strong this year. With average selling prices falling, the dollar revenue mount should be less than that, nearly 10%, according to IDC. The U.S. thriftiness has moderated, and sales of PCs have been slower. But in far-flung geographies—to such a degree as Asia-Pacific, Middle East, and Africa—sales are stronger, and it seems that is helping to offset weakness in the U.S.

In PCs, notebooks continue to grow faster than desktops. In its July quarter, HP aforesaid notebook revenue rose 26% from a year ago, while desktop revenue grew 6%. HP’s one shipments rose 20%, while revenue rose 15% for its individual systems clump.

In HP’s printers and imaging business, income grew 3% from a year ago to $7 billion—to me it’s a hopeful sign that it grew at all. It’s surviving a slowdown in the U.S. economy and managed to show positive growth. In this area, the hardware revenue fell for both consumer and commercial customers, while supplies revenue grew 11%. So even if hardware sales go from a thin to a dense state, people still need ink and supplies.

In HP’s enterprise storage and servers, revenue was $4.7 billion, up 5% from a year ago. So it hasn’t in truth slowed down. Blade servers are a huge growth area—they’re a smaller, more energy-efficient way to perform certain server tasks.

HP software return grew 29%, which may reflect more consulting business. For HP, overall, you can affirm that all segments contributed to bourgeoning, which is a powerful statement making allowance for the U.S. regulation slowing. Cost cuts helped the assemblage beat the consensus EPS forecast by a few pennies.

My principle takeaway from HP is that PC one sales dwell strong, and my summation from the rest of the industry is that all PC makers are participating. We’ve seen very strong growth from Apple (AAPL), but you’ve also seen Dell (DELL) growing from a new distribution plan that includes partnerships with a few retailers. Dell reports results on Thursday, Aug. 28, so we’ll get by heart more information then.