Corporate Profits a Boost for US Industry

Corporate America took another step along its long road to recovery on Tuesday as companies from the industrial heartland of Peoria to the technology hubs of Silicon Valley reported stronger-than-expected profits and bullish outlooks. The wave of positive second-quarter results from Caterpillar, DuPont and Apple, which came a week after several banks beat analysts’ expectations, fuelled investors’ hopes for a rebound in the US economy.

Shares in Caterpillar rose nearly 8 per cent on Tuesday after the world’s biggest maker of construction equipment un-veiled profits far ahead of Wall Street’s expectations and issued a more optimistic outlook. Its upbeat comments fuelled hopes that the global industrial economy was recovering. The manufacturer is a bellwether of the US economy but also heavily relies on overseas markets.

After the market close, Apple added to investors’ optimism with better-than-expected third-quarter results driven by strong sales of its iPhone. Apple’s results were the best-ever in a quarter not including a holiday. Chemical group DuPont and drugmaker Merck both reported a drop in second-quarter profits, but their earnings exceeded Wall Street’s forecasts. Coca-Cola results were ahead of analysts’ predictions but the world’s largest soft-drinks group warned US consumers remained under pressure – a factor underlined by steep revenue falls at three airlines: United, Continental and Southwest.

The figures from Caterpillar boosted stocks, pushing New York’s S&P 500 index to match its intra-day high for the year of 956 set last month. “Everyone is now looking for growth in the economy and people who were under-invested in stocks are being forced back into the market,” said Anthony Conroy, head equity trader for BNY ConvergEx.

After several strong sessions that sent the S&P 500 more than 8 per cent higher in the past six days, the benchmark index rose 0.4 per cent to close at 954.58. Credit Suisse on Tuesday raised its year-end target for the S&P 500, to 1,020 from 920. The S&P has not traded above 1,000 since November. Technology shares have set the pace for the market, with the Nasdaq Composite up 21.5 per cent this year.

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Source: http://www.ft.com/cms/s/0/4bbd740a-7622-11de-9e59-00144feabdc0.html

Ballmer: All Traditional Content Will Be Digital In 10 Years

Steve Ballmer said Wednesday that the global advertising economy has been permanently “reset” at a lower level, warning that media companies should not plan for revenues to bounce back to pre-recession levels.

Speaking at the Cannes Lions International Advertising Festival, Ballmer argued that traditional broadcast and print media would have to plan business models around a smaller share of the advertising market, as revenues continue to move to digital outlets. “I don’t think we are in a recession, I think we have reset,” he said. “A recession implies recovery [to pre-recession levels] and for planning purposes I don’t think we will. We have reset and won’t rebound and re-grow.”

Ballmer, named media person of the year at this year’s festival, also painted a bleak picture for the future of traditional media, arguing that newspaper publishers have failed to generate new revenues from the digital opportunity. He said that within 10 years all traditional content will be digital and yet, Google (NSDQ: GOOG) aside, publishers are failing to generate serious digital revenues.

“All content consumed will be digital, we can [only] debate if that may be in one, two, five or 10 years,” added Ballmer. “There won’t be [only traditional] newspapers, magazines and TV programmes. There won’t be [only] personal, social communications offline and separate. In 10 years it will all be online. Static content won’t cut it in the future,” he added.

“Some say that the ad-funded model has not led to profitability. Google’s search site makes money but past Google is there a publisher with an ad-funded or fee-based model that has made lots of money? No.”

For media businesses to successfully evolve they must provide the right combination of context and relevance to make a compelling online proposition for consumers, according to Ballmer. “There are problems with digital advertising. Start with content and the website environment and [ask] is it suitable for advertising. [That] question is somewhat in the balance as we move forward,” he said. The old approach of simply trying to replicate a print newspaper online is doomed to fail, Ballmer added.

During a question and answer session after his speech, Ballmer was also asked about Microsoft’s interest in acquiring Yahoo.“We have no interest in acquiring Yahoo (NSDQ: YHOO). What we have said is that we will continue to remain open to a partnership with Yahoo,” he responded.

Source: http://paidcontent.org/article/419-microsofts-ballmer-all-traditional-content-will-be-digital-in-10-years

Tags: Steve Ballmer, Microsoft, Technology Prediction, Digital content, Analog content, google, Yahoo, Cannes Lions International Advertising Festival, Ad-funded model, Global Best Practice, Print media,

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