European Business News 96-08-16

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From: The European Business News Server at <http://www.ebn.co.uk/>

Page last updated August 16 8:40 CET

CONTENTS

[01] Hewlett Packard posts a 26 percent drop in third quarter net income

[02] Shares in German chemicals group BASF jump on news it plans to sell of two subsidaries

[03] Dole vows to take a tough stand on international trade as he accepts the Rebublican Party's presidential nomination

[04] Japan Ministry of International Trade and Industry considering plan to help small businesses compete

[05] Pope skips mass - reported to have 'mild' illness

[06] UK RPI rises to 2.2%

[07] ABN Amro's profit climbs 36% in 1H

[01] Hewlett Packard posts a 26 percent drop in third quarter net income

The company, which previously enjoyed robust demand across its broad product line, also warned Thursday that some problems affecting its profitability could continue. Hewlett-Packard had warned several weeks ago that its growth was slowing and it would have difficulty meeting analysts' expectations this quarter. Analysts surveyed by Zacks Investment Research had forecast a profit of 49 cents a share for Hewlett-Packard, but Robert P. Wayman, HP's chief financial officer, said most analysts hadn't included the effects of the charge in their estimates.

'This quarter's results confirmed what we've said for some time: that it would be very hard to grow consistently at the strong rates we achieved in recent years,' said Lewis E. Platt, HP's chairman and chief executive officer.

HP announced its results after the market closed. Its stock closed down dlrs 3.50 to dlrs 40, an 8 percent tumble, on the New York Stock Exchange.

[02] Shares in German chemicals group BASF jump on news it plans to sell of two subsidaries

The company said it has signed a letter of intent to sell its magnetics division to Turkey's RAKS Holding A.S. The division - which produces BASF's widely known audio and video tapes and cassettes - has been plagued by losses for years, worsened by high costs of production in Europe.

BASF also said it's in talks with Canada's Potash Corporation of Saskatechwan Inc. (PCS) to sell a 51% stake in German potash and rock-salt producer Kali und Salz Beteiligungs AG (K&S).

Analysts said they were pleased by the announcements, which show that BASF is shedding loss-making businesses and focusing on its core activities of chemicals, pharmaceuticals and oil and gas.

'The moves can be seen in a very positive light,' said Christa Baehr, chemicals analyst at Bankgesellschaft Berlin.

'It shows they're looking hard at earnings,' she added, noting that BASF is widely expected to develop its pharmaceuticals area further. BASF acquired the pharmaceuticals division of Boots Co. PLC of the U.K. in April 1995.

BASF shares closed floor trading on the Frankfurt Stock Exchange Thursday at 42.49 Deutsche marks, up 1.16 marks, or 2.8%, from a day earlier. The bellwether 30-share DAX index, meanwhile, rose 7.65 points, or 0.3%, to 2, 546.33 points.

[03] Dole vows to take a tough stand on international trade as he accepts the Rebublican Party's presidential nomination

In the most critical speech of the campaign so far, Dole described himself as the 'the most optimistic man in America,' a candidate tested by poverty, war, disability and public service.'

[04] Japan Ministry of International Trade and Industry considering plan to help small businesses compete

A ministry official said, however, details of the plan have yet to be finalized and declined to confirm a Japanese newspaper report that MITI is requesting 30 billion yen for the plan from the national budget for the next fiscal year starting April 1.

The Mainichi Shimbun daily reported that the MITI's plan will include improvement of industrial infrastructure, promotion of research and development operations and personnel training programs, as well as acceleration investment flows into regions that have high concentrations of small companies specializing in certain products and technology.

Many of Japan's smaller manufacturers are being squeezed severely as larger Japanese corporations try to cut domestic production costs while increasing overseas production.

[05] Pope skips mass - reported to have 'mild' illness

A Vatican spokesman, the Rev. Ciro Benedettini, told The Associated Press the pope was suffering an abdominal ailment but didn't elaborate.

Since removal of a bowel tumor four years ago, the pope, now 76, has had periodic CT scans. But Benedettini said the latest scan was ordered ahead of schedule because of concern that the abdominal illness might have been connected to the tumor removed in 1992.

[06] UK RPI rises to 2.2%

The index rose to 2.2 percent from 2.1 percent in June. The underlying rate, which is used by the British government in setting its inflation targest,

edged up to 2.8 percent. The figures could jeopardise the government's target to get inflation down to at least 2.5 percent by next year.

And that may provide further justification for the Bank of England's argument that interest rates should rise to keep inflation under control.

[07] ABN Amro's profit climbs 36% in 1H

The results are better than expected and the markets should also be pleased with an increase in the interim dividend to 1.8 guilders per share from

1.6. Europe's fifth biggest bank showed strong gains from both lending activities and it's investment arm.

From the European Business News (EBN) Server at http://www.ebn.co.uk/

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