Robert Burns said: “The best made plans of mice and men gang oft agly.” My office was put off-limits by a carbon monoxide leak from the garage below, on a day with much news to write about. But I am not as badly off as Microsoft is; our Department of Homeland Security has warned people not to use Internet Explorer because it is vulnerable to cyber crooks using fake websites. Nor am I as embarrassed as Bank of America-Merrill Lynch is after an accounting error overstated its tier I capital by $4bn so that it had to suspend its dividend and share-buyback.
More follows with a gaggle of corporate results from Spain, Finland, and Canada, an explanation for an Italian and a Canadian stock sale, and news from Brazil, Portugal, Israel, Britain, Ireland, Singapore, South Africa, and Mongolia.
*Spanish Banco Santander Q1 profit hit euros 1.3 bn ($1.8 bn), ahead by 8.1% both over prior year Q1 levels and the analyst consensus, mostly thanks to a 14% drop in non-performing loans. However, its reserves for bad loans actually rose year/over/year. SAN gained profits in Spain, its homeland, where the rise was a scant quarter, to euros 251 mn, and in Britain, where the profit recovery was nifty, up 63% to euros 376 mn, helped also by strong sterling. However, currencies worked against SAN in Latin America where profits dropped 26.6%, led by a 27% drop y/o/y in Brazil and a 43% drop in Mexico. The UK turnaround was spearheaded by Ana Patricia Botin, the chairman’s daughter, who may become his successor.
EPS did not do as well, off 1.9% to eurocents 11.3 because of issue of new shares in lieu of dividends
SAN also will use euros 4.69 bn of its own shares to buy out minority shareholders who own 25% of its bank in Brazil, a 20% premium over yesterday’s close. It will complete this conversion by Oct and until then the Santander Brazil shares and ADRs (BSBR) will continue to trade. SAN hit a new 52-wk high in Madrid after it reported. It also replaced its embattled CEO, Alfredo Saenz with Javier Marin, formerly a senior executive vp at the Spanish bank and before that head of its private banking arm. Saenz is under investigation by the Bank of Spain for possible illegal lawsuits against borrowers two decades ago, before he joined SAN, while he headed Banesto. He was also replaced by Mattias Rodriguez Inciarte as board vice-chair.
*Also reporting today, after the huge payout by Microsoft for its handset business, was Finland’s Nokia which named Rajeev Suri, head of its key Nokia Solutions & Networks telephone exchange arm as the new CEO, replacing Stephen Elop who went over to MSFT. NOK reported a net profit Q1 of euros 108 mn (vs a loss of 98 mn a year before.) Revenues however fell 17% to euros 2.33 bn, missing analyst estimates. It predicted operating margins this year of 11.4%. Both figures did not include the Microsoft payment of euros $7.5 bn which was $177 mn higher than the initial deal. NOK will pay euros 3.1 bn ($4.15 bn) of the MSFT loot to shareholders via extraordinary dividend, 26 eurocents or 36 US cents/sh this year, pending approvals, plus share buybacks. It also will pay 11 US cents/sh in ordinary dividends this year. It will also have to pay euros 180 mn in Finnish taxes on the deal and give up ~euros 200 mn in unrecognized deferred taxes. It also repaid euros 1.5 bn in a MSFT convertible bonds issued for the deal.
