Executive Business Briefing

Nov. 12, 2001 at 7:25 AM
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Here is a look at Monday's top business stories:

Stocks decline in Tokyo

TOKYO, Nov. 12 (UPI) -- Stock prices on the Tokyo Stock Exchange ended lower Monday, pressured by continued pessimism about the country's flagging economy.

Elsewhere in the region, stocks rose in Taiwan after the World Trade Organization approved both China and Taiwan's entry into the global trade club. Stocks also rose in South Korea and Sydney, Australia, but ended lower Hong Kong.

Japan's blue-chip Nikkei Average of 225 selective issues, which lost 216.08 points Friday, fell another 134.15 points, or 1.31 percent, to 10,081.56 after posting modest gains early in the session. The broader Topix index fell 9.67 points, or 0.90 percent, to 1,021.11.

Volume declined to an estimated 613.97 million shares from 729.69 million shares changing hands on Friday.

Declines outpaced advances 916 to 427, while another 122 issues settled unchanged.

Analysts said stocks initially rose as investors bid up blue-chip issues, including Japan Airlines Co.

Japan Air Systems, the country's third-largest carrier, said it is discussing integrating its operations with Japan Airlines, the country's No. 1 carrier. Investors welcomed the news, saying a merger would help realign Japan's airline industry, which has been hit by the global economic slowdown.

The Nikkei also got an early boost from Wall Street's continued advance on Friday, when the two main indexes surpassed levels traded before the Sept. 11 terrorist attacks in the United States.

However, prices came under pressure after Prime Minister Junichiro Koizumi told parliament that the nation needs to endure two to three years of sluggish economy while the government pushes through the structural reforms needed for longer-term, sustainable growth.

In trading, Asahi Bank jumped 8.7 percent after losing almost a quarter of its value in the past four sessions. Investors rushed to buy Asahi Bank's shares on the company's announcement that it plans to trim bad loans by roughly $1.7 billion in two years through a tie-up with U.S. investment bank Goldman Sachs.

Daiwa Bank, which is expected to merge its operation with Asahi under a joint holding company, settled unchanged. Among other banks, Mizuho Holdings added 0.7 percent.

Japan Airlines rose 3.9 percent, rival All Nippon Airways lost 1.9 percent.

Meanwhile, among some of the other active issues, Japan Telecom lost 1.7 percent, Mazda lost 1.9 percent, Nintendo lost 0.7 percent.

Elsewhere in Asia, prices on the Taiwan Stock Exchange ended higher after the World Trade Organization approved Taiwan's entry, only 24 hours after China. The benchmark Weighted rose 48.85 points, or 1.18 percent, to 4,172.63.

Taiwan, with world's 14th largest trading economy, on Sunday won approval to join the global trade club after seeking entry for 12 years.

Taiwan's state media the Central News Agency quoted Morris Chang, the chairman of Taiwan Semiconductor Manufacturing as saying entry into the WTO would have a greater impact on China than on Taiwan.

In trading, Compal Electronics rose 1.7 percent and Acer Communications and Multimedia jumped 3.8 percent.

China's WTO entry news, however, failed to boost prices on the Hong Kong Stock Exchange as investors pocketed profits after the widely expected approval was finally announced. The blue-chip Hang Seng Index lost 16.80 points, or 0.16 percent, to 10,592.45, after moving in a narrow range throughout the session.

In trading, Anhui Expressway rose 2.2 percent, Shenzhen Expressway gained 2.4 percent, banking giant HSBC Holdings eased 0.3 percent and HSBC's subsidiary Hang Seng Bank slipped 0.6 percent.

Prices ended slightly higher on the South Korean Stock Exchange. The Kospi composite index rose 7.73 points, or 1.34 percent to 584.48.

Volume leader Hynix Semiconductor soared 14.9 percent following a report that the ailing chipmaker would sell off all chip fabrication plants except four core units to raise some $1.6 billion. Hynix's main creditor Korea Exchange Bank climbed 8.1 percent.

Elsewhere around the region, prices ended slightly higher on the Australian Stock Exchange. The key All Ordinaries Index added 17.30 points, or 0.54 percent, to 3,238.70, helped by a 6.0 percent rise in WMC.

Revenues decline at E.W. Scripps, issues earnings warning

CINCINNATI, Nov. 12 (UPI) -- E.W. Scripps, citing a weak newspaper and television advertising market, said its consolidated revenues for October fell to $122 million on a pro forma basis from $145 million during the same period last year.

The company also said that based on weaker-than-expected newspaper advertising revenue in October and the current newspaper advertising outlook for the remaining two months of the year, it expects lower fourth quarter results.

The company said newspaper revenues during October fell 12 percent to $59.4 million from $67.1 million a year ago. Scripps Networks revenues declined 10 percent to $27.3 million from $30.3 million last year and Broadcast Television revenue fell 31 percent to $27.3 million from $39.4 million a year ago.

E.W. Scripps said the general decline in the domestic economy and subsequent weak newspaper and television advertising market, which were further exacerbated in the aftermath of the Sept. 11 terrorist attacks, pressured revenues.

E.W. Scripps also noted that uneven year-over-year newspaper revenue comparisons were caused by the loss of a Sunday during the month. October 2001 had four Sundays compared to five in October 2000. Newspapers derive a significant percentage of total revenues from Sunday editions. Adjusting for the day switch in October, newspaper advertising revenue was down 10 percent.

The company said despite the cyclical weakness in advertising revenues, the company continued to see expansion of its valuable brands. At Scripps Networks, distribution of Home & Garden Television and Food Network continued to grow.

E.W. Scripps said HGTV now reaches 74.8 million households, up 8.4 million from the same period a year ago and up 500,000 from the previous month. Food Network now reaches 68.4 million homes, up 15.4 million from October 2000 and up 700,000 million from the previous month.

Looking ahead the company also said that based on weaker-than-expected newspaper advertising revenue in October and the current newspaper advertising outlook for the remaining two months of the year, the company anticipates that fourth quarter earnings will likely fall below the low end of its previously issued guidance of 55 to 65 cents a share.

The company said it now estimates that fourth quarter earnings will be in the 45 to 55 cent range compared with 69 cents a share in 2000.

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