EWS AT A GLANCE
Alcoa slumps despite high metal prices
Alcoa posted a 54 percent drop in quarterly profits, to $303 million, as high energy costs and the weak dollar offset a late-quarter surge in aluminum prices. The results missed analysts’ expectations. Alcoa was the world’s top aluminum firm, but fell to No. 3 last year. (Reuters) Aluminum prices have shot up 24.5 percent since Jan. 1, but they started the quarter relatively weak. (AP in Yahoo! Finance) Russell Robinson at Robinson Investment Group said it “was actually a strong quarter,” but that Alcoa might be making itself seem less attractive to prevent a takeover. “Alcoa is just looking to muddy the waters a bit after management watched their friends over at Alcan get acquired,” he said. (MarketWatch)
AMD cuts back
No. 2 computer chip maker Advanced Micro Devices said it is cutting more than 1,600 positions, or 10 percent of its workforce, after a rougher-than-expected first quarter. AMD said it will log an unexpectedly weak $1.5 billion in quarterly sales when it reports results April 17. The news sent AMD shares down almost 3 percent in extended trading. (AP in Yahoo! Finance) Analysts blamed the shortfall on a weak economy and increasing competition from larger rival Intel. But AMD’s headway into the lucrative server market gives it some hope going forward, said Stifel Nicolaus analyst Cody Acree. “This is a miss, but it’s also a miss that’s being corrected with products that are already out the door.” (Reuters)
Intel bets on China
Intel Capital, the investment unit of chipmaker Intel Corp., unveiled a new $500 million fund that will invest in Chinese companies working with wireless Internet, high-tech media, telecommunications, and clean technologies. The fund, which will be paid out over five to seven years, follows a $200 million investment in China in 2005. (Reuters) China is the world’s largest semiconductor market, with annual chip sales estimated to top $28 billion by 2011. The new fund is Intel’s single largest in one country, said Intel Capital president Arvind Sodhani. “That should give you a pretty good idea of the importance and size of commitment to China,” he added. (Bloomberg)
Poison scare leaves a better mozzarella
Southern Italy’s mozzarella market suffered a blow last month after fears emerged that the buffalo-milk base was contaminated with dioxin. Several nations banned imports of the cheese following Italian newspaper reports that 83 Naples-area buffalo farms had been quarantined. Sales fell 30 percent, and prices slid. The contamination was blamed on 15 years of illegal trash disposal by Naples’ mafia-run waste-management industry. But the glut of buffalo milk from the crisis has actually made the premium cheese better—and more affordable for Italians. “For me it’s like shopping at Tiffany’s, but finally being able to afford it,’’ said Roman housewife Marta De Santis. (Bloomberg)
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