Tag: cash

Microsoft sitting on vast cash mountain

SheepBloomberg has winkled out some information about Microsoft that won’t make you feel sorry for its current situation in the slightestl.

The wire reports that Microsoft is holding onto $108 billion outside US territory because if it repatriated the money to its homeland, it would have to fork out $34.5 billion in taxes – a rate of around 31.9 percent.

Bloomberg concludes that Microsoft pays a paltry 3.1 percent in taxes on its foreign income because Ireland, Puerto Rico and Singapore give it significant tax breaks.

The Internal Revenue Service levies taxes of 35 percent on profits corporations make in foreign lands but the winkle is they don’t have to pay the taxman until the money comes back to the USA.

For similar reasons, Apple has a bundle of cash amounting to around $200 billion but 90 percent of that is held in overseas accounts too.

The IRS is investigating Microsoft’s tax returns going back to 2004, the wire said, and hopes to shear some of the software giants excess wool.

Intel holds out for more cash in Israel

Troubled fashion bag maker Intel is considering what it should do about the location of a new multi-billion dollar semiconductor plant using new 10 nanometer technology.

Israel is one of a number of countries competing to host the new plant and Intel appears to be dragging its feet on making a decision, probably because it does not want to spend too much dosh when things are not going that well.

Maxine Fassberg, general manager of Intel Israel, told a news conference that Intel will make its decision as late as possible. Until it needs to, Chipzilla will not decide. However, she pointed out that the next technology it has will come this year.

Intel has already held talks with the Israeli government, which must offer incentives to be competitive, said Fassberg, manager of Intel’s Fab 28 plant in the southern town of Kiryat Gat.

Already there is some doubt that the plant will be built in Israel, despite some deals offered by the Israeli government. However, Chipzilla appears to be miffed that the level of subsidy in the land of milk and honey is getting less.

Intel has received grants of more than 28 percent of its investment when it built Fab 18, which started operating in Israel in 1999. This amount fell to 15 percent for Fab 28 in 2008, and when it upgraded Fab 28, the grant amounted to only seven percent. Our guess is that Intel is holding out for more cash before making its decision.

In its 40 years in Israel, Intel has invested $10.8 billion in plants and development centres and received $1.5 billion in grants. It employs nearly 10,000 people.


AMD slashes orders to GlobalFoundries

AMD has told Globalfoundries to stop making so many of its chips because no one is buying them.

According to Bloomberg,  AMD has formally reduced chip orders from supplier Globalfoundries as part of a cost cutting move to preserve cash during a PC-market slump.

AMD thinks that it will only buy wafers from GloFo for about $115 million in the fourth quarter. This deal replaces one where AMD would buy $500 million of chips.

In October, AMD forecast fourth-quarter sales that fell short of analysts’ estimates, putting the company on course for its fourth consecutive quarterly sales decline.

Analysts such as Sanford C. Bernstein’s Stacy Rasgon predicted that, if the trend continues, AMD would run out of cash reserves.

AMD agreed, saying that liquidity and cash management remained a key focus for AMD.

Interim Chief Financial Officer Devinder Kumar said on a conference call that AMD would go bacl to the days of actually generating cash from operations in the second half of next year and can stay close to its target level of $1.1 billion in cash reserves, he said.

Terminating the contract to reduce the payments will cost AMD $320 million, to be paid off by the end of 2013. 

Israel rethinks taxing foreign companies

The Israeli government took time out of its busy schedule of dumping white phosphorous on Palistinian schools, to look at how it funds rich western companies to set up in the Promised Land.

For years Israel has been giving money to Intel to prop up its chip making business in the region, but there are signs that the relationship is fading.

According to the Haretz newspaper, Treasury officials are now even thinking about taxing multinational companies that have accrued profits over the years in Israel and now want to take them overseas.

The Israelis have worked out that there are huge profits to be clawed back from companies who have set up shop in Israel.

State revenues are coming up short of forecasts for the year and the government needs to make a shekel or two to cover the gap.

Government thinking is tending toward hitting the multi-nationals for all the taxes owed but granting a tax break to about a third of the taxes due.

The argument is that the government must offer breaks to encourage them to pay out taxable dividends.

Intel accepted state aid under the Encouragement of Investments Law, which has entitled companies to billions of shekels in state support over the years.

The law was recently amended to allow them to repatriate profits, but companies have not been able to act on the change in  the tax rate.

There are a large number of tech companies in Israel who are sitting on cash mountains which are doing no one any good.

Check Point Software Technologies, Intel, Motorola and Amdocs are some of them.

Intel is estimated to pay an effective rate of about 12 per cent. 

Nokia heaping piles of cash onto Espoo's biggest bonfire

The cocaine nose-jobs of Wall Street are worried that Nokia is burning through its cash faster than an under-the-weather Italian in a shoe shop in the Via Corsa.

Analysts are asking serious questions about the struggling Finnish phone maker’s ability to stabilise its finances. According to Reuters, the cost of Nokia’s debt appears to be following the same model as Greece.

The company could even be at risk of defaulting on its debt and having to issue its own currency if it fails to slow the burning of its cash.

Nokia has eroded its cash pile by €2.1 billion ($2.7 billion) which means it will have no money in a couple of years, unless it wins the lottery.It could burn through almost 2 billion more in just three quarters.

Societe General credit analyst Juliano Torii warned that Nokia will have some difficulty paying its shorter-term 2014 bond.

In 2007, the company had 10 billion in cash on hand and has two bond issues outstanding, 1.25 billion euros of 5.5 percent bonds maturing in 2014 and 500 million of 6.75 percent notes due in 2019.

The bonds are rated as junk by Fitch and Standard & Poor’s.

A Nokia spokesperson admitted that improving its cash flow was an important goal.

At the same time its flagship Lumia, while receiving positive reviews, hasn’t demonstrated it can really compete against Android or the iPhone

Pew predicts phones will replace cash by 2020

The fortune tellers at Pew Research are saying that smartphones or tablets will replace cash and credit cards within ten years.

Apparently Pew has made this conclusion by asking “technology stakeholders and critics” or as we say in the trade, other analysts.

According to SMH,  65 percent of those polled agreed that handheld gadgets would be a mainstream way to pay by the year 2020.

Google chief economist Hal Varian, when told about the poll, said that the 2020 date might be a bit optimistic, but was sure that this will happen.

Of course if it does not happen by 2020, no one is going to hand Pew, or anyone surveyed with a copy of this article and say “ah ha! You got it wrong.” The prediction will be made so far in the past that it will have been forgotten by then. We could say that the world will be eaten by badgers by 2040 never have to risk being called out on it.

Those asked thought that security and convenience would be among the factors prompting people to shift to using smartphones or tablets as de facto credit cards or cash.

While the technology is already there, Pew thought it would take a while for cash or credit cards to disappear.

It cited concerns about the technology, resistance by incumbent providers and the slow way that society changes.

It also ignores the fact that people in the US will be worried that somehow their phone is the mark of the beast. 

Swedes about to kill off bank notes

The first country to introduce bank notes in 1661 is about to follow the advice of one of its pop stars and replace them with cyber transactions.

According to USA Today, Bjoern Ulvaeus, former member of popular beat combo Abba, has been instrumental in lobbying the government to dump cash and move to electronic cash.

In most Swedish cities, buses don’t accept cash and tickets are prepaid or bought with a mobile phone text message. Some businesses only take cards, and some bank offices have stopped handling cash altogether which means they do not have to get themselves robbed.

Of course this brave new world is not for everyone. Curt Persson, chairman of Sweden’s National Pensioners’ Organisation says there is a problem for elderly people in rural areas who don’t have credit cards or don’t know how to use them to withdraw cash.  This is causing a crisis because they cannot buy food or flat pack furniture.

But, apparently, even the churches are starting to install card readers instead of the traditional collection plate.

Cash is only part of three percent of Sweden’s economy, compared to an average of nine percent in the Eurozone and seven percent in the U.S.

So why is “Money, Money, Money” Ulvaeus interested in a cashless society? Well if you saw the Girl with the Dragon Tattoo, Sweden is a country full of guns, violence, nazis, and open sandwiches. He told CBS it was all a matter of security.

His son has been robbed three times and he wants the country to move to a digital economy much faster to make life harder for thieves.

The Swedish Bankers’ Association says the shrinkage of the cash economy has caused the number of bank robberies to fall from 110 in 2008 to 16 in 2011.

Electronic transactions are also making it difficult to hide cash, bribe people, or carry out shadow economy activities.

Of course it has lead to an increase in cybercrime, but since these do not involve someone looking down the barrel of a sawn off shotgun people are less concerned. 

SAP bribes employees with phantom stock

SAP has twigged that working for a management outfit which is a little on the dull side is proving a little difficult and is now bribing its employees to stay. 

The outfit, which designs highly profitable software, has decided to offer its workers what is described in the business world as phantom stock. 

What this means is that instead of giving its staff cash bonuses it will throw them a few shares in the company in a bid to keep them. The upside is that these shares are currently trading at the highest level in 11 years. The downside is that they may fall.  

SAP is clearly worried about losing some of its talent as it embarks on overtaking Siemens and develops more cloud based software. It wants to hold on to as many of its 54,000 employees as possible.

According to co-chief officer Jim Hageman, the incentive program will “make sense” to their workers too.

He told Bloomberg that this was because it would “make them interested” in the share price of SAP and “give them an opportunity to participate in [SAP’s] success”.

And this isn’t the first time the company has done something for its employees. Back in 2006 it set aside millions as an incentive for its senior staff to reach certain goals.

According to Bloomberg this goal however wasn’t met so no one got anything.

iPhone is most recycled phone

Ah, nostalgia. There’s so much less of it about than there used to be. But according to Orange, the next generation is taking up the torch, with a staggering 23 percent of British 18- to 24-year-olds hanging onto their old mobile phones for sentimental reasons.

Indeed, according to the Orange survey, Brits are hoarding £2.7 billion worth of old mobile phones between them. Four in ten people have never recycled an old phone, and a third don’t have a clue how.

“I’m surprised that so many people have never recycled a mobile phone or even considered that they could get cash back for them,” says Dan Thomas, head of Orange’s new Recycle & Reward scheme.

“Recycling old handsets is good for the environment and good for consumers’ pockets  –  and we’ll reward any customer from any network that wants to recycle their mobile with cash.”

Apparently, most people have a rather better quality of electrojunk than yours truly, with the average payout being £45.

And interestingly, while surveys generally show iPhones as being the most desirable phones, Orange reckons they’re also the ones people are keenest to get rid of. The most recycled handset is apparently the iPhone 3GS 16GB, followed by the 8GB version.

Anyone tossing out an iPhone 4 – perhaps because it isn’t diamond-studded – can expect to net a cool £148.

We thought we might have found a useful source of extra revenue here at Techeye – the blackmail’s not been quite so lucrative of late. Unfortunately, Orange says it checks every handset against a crime protection database.

Foxconn profits jump in 2010

Hard working taskmaster Terry Gou is sure to please Foxconn investors in its latest earnings report.

Despite inconveniences like having to pay workers a slightly larger pittance, and provide them with better working conditions, Foxconn has announced a 53 percent rise in consolidated  revenues for 2010.

Figures for the year topped NT$2.99 trillion for 2010, up from NT$77.15 billion.

Net income also went up by 1.9 percent to NT$77.1 billion for the year, while
the company’s gross profit for the twelve months increased by 58.5 percent to NT$100.9 billion from NT$63.6 billion in 2009.  

The company also did well when it came to its earnings per share, with a total of NT$2.22 for the fourth quarter of 2010. This was despite the average gross margin for the quarter dropping 0.1 percent to 7.9 percent.

Foxconn described the year as uncertain and “challenging”.  It however said that despite the general uncertainty the “results were as expected and remain seasonal.”

It also confirmed several new investments in China. According to the Taiwan Economic Daily this includes an interest in investing in solar cell manufacturer Neo Solar Power .