Companies in Brief
PetroChina: A Gush of Profits on the Mainland
PetroChina (PTR), Asia's biggest company by market value, reported a 71% jump in first-quarter profits on Apr. 27. Net income climbed to $4.8 billion thanks to rising oil production and higher prices. While Western oil majors such as BP (BP) and Shell (RDS) expect their output to fall or stay flat this year, PetroChina is targeting an increase of 3%. The company plans to spend at least $60 billion in the next decade on overseas acquisitions to keep up with the mainland's surging energy demand.
Lions Gate: Slouching Towards Hollywood
The yearlong quest by billionaire investor Carl Icahn to win control of Lions Gate Entertainment (LGF) made a major move forward on Apr. 27 when the British Columbia Securities Commission voided the Vancouver-based company's poison pill defense. Icahn may still have to increase his $7-per-share bid for the maker of the Saw movies and Mad Men TV show, whose stock traded above 7 after the decision. The tender offer expires on Apr. 30, although Icahn is likely to extend it.
Southwest Airlines: Fined for Bumping Passengers
The U.S. Transportation Dept. on Apr. 27 ordered Southwest Airlines to pay a $200,000 fine for failing to comply with federal rules for bumping passengers from flights. The agency claims the carrier did not give involuntarily bumped passengers written notice, or the proper amount of compensation in a timely fashion. Southwest bumped 13,113 passengers last year, more than any other U.S. airline.
Google: The Nexus One Phone Is Causing Static
Verizon Wireless, the largest U.S. mobile-phone company, said on Apr. 26 that it was dropping plans to offer service for Google's Nexus One phone. Without access to Verizon's more than 90 million customers, the Nexus One handset may have trouble competing with Apple's iPhone. Some industry watchers had warned that Google's decision to launch its own branded phone—available for sale only through its Web site—risked spoiling relations with carriers.
Ford: Price Hikes Drive Profits
On Apr. 27 the No. 2 U.S. carmaker, aided by a recovering auto market and higher prices for its vehicles, reported a $2.1 billion profit for the first quarter. Ford also managed to boost its U.S. market share to 17.4% from 14.7% a year earlier, the biggest jump since 1977. Yet analysts warn the first quarter may be as good as it gets this year, given that Ford faces rising costs associated with the introduction of new models.
MTN Group: Telecom Dealmaking in Africa
MTN Group, Africa's largest mobile-phone company, is in negotiations to buy all or part of Cairo-based Orascom Telecom Holdings. Orascom has operations in Bangladesh, Pakistan, Egypt, Algeria, Tunisia, the Central African Republic, Burundi, Namibia, and Zimbabwe, along with North Korea. MTN isn't the only telco seeking to expand its footprint in the Middle East and Africa. Vodafone and Emirates Telecommunications also have been scouting opportunities in the region. Merger talks between MTN and India's Bharti collapsed last year.
Charles River Labs: A Western Takeover in Chinese Pharma
Charles River Laboratories International on Apr. 26 announced that it's buying WuXi PharmaTech for about $1.6 billion. The deal is the largest foreign takeover of a Chinese company. It will give Massachusets-based Charles River, which specializes in testing drugs and medical devices, access to labs in China, where cheaper labor and lab costs are luring some of the world's biggest drugmakers. Novartis and Pfizer are both plowing money into research facilities on the mainland.