Malaysia-based AirAsia, the region’s biggest low-cost carrier by fleet size, said yesterday its third-quarter net profit plunged a year-on-year 85% due mainly to higher financing costs.

Net profit for the quarter ending September 30 was 5.4mn ringgit ($1.61mn), the company said, while revenue increased 3.1% to 1.32bn ringgit.

It also blamed some of the lower profit on affiliate Thai AirAsia posting its second consecutive quarterly loss due to the unsettled political situation in Thailand, whose visitor industry was hit in the wake of a May coup.

AirAsia said the quarterly results demonstrated “the company’s strong standalone performance at a time when most of the other airlines around the region are facing a challenging period and recording poor performances.”

AirAsia is led by flamboyant boss Tony Fernandes, a former record industry executive who acquired the then-failing airline in 2001.

It has seen spectacular success and aggressive growth under his low-cost, low-overhead model.

AirAsia signed an agreement in July to buy 50 long-haul A330 jets from Europe’s Airbus in a deal worth $13.75bn at catalogue prices.

Meanwhile, AirAsia X, the budget carrier’s long-haul, low-cost affiliate, announced its fourth consecutive quarterly loss yesterday.

 

Target

Target Corp, the fourth-largest US retailer, reported a better-than-expected quarterly profit as US same-store increased for the first time in four quarters.

US same-store sales rose 1.2%, double the rate that analysts polled by Consensus Metrix had expected.

Last week Wal-Mart Stores, the largest US retailer, reported its first rise in US same-store sales in seven quarters, helped by a drop in gasoline prices.

Target raised the lower end of its full-year adjusted earnings forecast range, but cut the top end.

The company now expects adjusted earnings of $3.15-$3.25 per share for the year ending January, compared with its previous forecast of $3.10-$3.30.

The forecast includes a pre-tax expense of $13mn, or 1 cent per share, related to the conversion of Target’s payment cards to MasterCard chip-and-pin cards following a massive data breach during last year’s holiday shopping season.

Target has also had to resort to price cuts to attract cash-strapped consumers and win back customers unsettled by the breach, which resulted in the theft of at least 40mn card numbers and 70mn other pieces of customer data.

The company said yesterday it had incurred net breach-related expenses of $158mn so far, including $12mn in the third quarter ended November 1.

The upcoming holiday season will be the first under new CEO Brian Cornell, who took the helm in August.

 

Staples

Staples reported higher-than-expected quarterly sales and profit as demand recovered for core office supplies such as paper and ink products after six quarters of decline.

Shares of the largest US office supplies retailer rose about 4% in premarket trading.

Staples also raised its free cash flow forecast for the year to “more than $800mn” from “more than $600mn.” The company said it would shut 170 stores in North America this year, higher than the 140 stores it had planned earlier.

The retailer said it had achieved annual cost savings of more than $200mn, of the $500mn it aimed to save under a two-year program.

Same-store sales fell 4% in the third quarter ended November 1, in line with the average analyst estimate, according to research firm Consensus Metrix.

Staples, which has been focusing on growing its online business, said sales at Staples.com rose 9%.

Net income rose to $216.8mn, or 34 cents per share, from $135.2mn or 21 cents per share, a year earlier.

Excluding items, the company earned 37 cents per share.

Revenue, however, fell 2.5% to $5.96bn. Analysts on average had expected a profit of 36 cents per share and revenue of $5.93bn, according to Thomson Reuters I/B/E/S.

 

Royal Mail

Online retail giant Amazon’s own delivery service will more than halve the growth potential for Royal Mail’s parcels business, the former state-owned British company said yesterday, sending its shares lower.

Parcels make up half of Royal Mail’s turnover and the development of online shopping has made them central to the company’s prospects when letter volumes are in decline.

However, competition from the likes of TNT, Yodel, and a new delivery service from Amazon, which was Royal Mail’s biggest customer accounting for six% of sales, has hampered progress and hit revenues.

Royal Mail warned yesterday that Amazon’s plans to deliver more of its own packages would cut growth in the British parcels market for it and rivals from an annual rate of 4-5% to 1-2% for at least two years.

The squeeze showed in a 21% decline in Royal Mail operating profit for the six months to September 28, although the figure of £279mn was not as bad as many analysts had feared.

Moya Greene, Royal Mail’s chief executive, said Amazon’s arrival and increased capacity from rivals were having a dramatic effect on its market.

 

James Hardie

James Hardie Industries, the world’s biggest fibre cement products maker, yesterday posted a sharp increase in second-quarter net operating profit, despite a slower-than-expected recovery in the US housing sector.

James Hardie, which generates two-thirds of its revenue in Europe and the US, warned of short-term US uncertainty with the recent “flattening in housing activity” but forecast a moderate improvement for the year ending in March.

Its Australian, New Zealand and Philippines businesses are expected to improve, it added.

“Management cautions that although US housing activity has been improving for some time, market conditions remain somewhat uncertain and some input costs remain volatile,” it said in a statement.

The company, which supplies products like cladding for the outside walls of houses, reported net operating profit of $127.2mn for the quarter ended September 30, up from $51.9mn a year ago.

Chief Executive Louis Gries said the 66% jump reflected increased volumes and higher average net sales prices across its US, European and Asian fiber cement businesses, which drove net sales up 12% for both the quarter and the half year.

 

Home Depot

Home Depot has reported slightly higher-than-expected quarterly sales as an improving job market encouraged home owners to increase spending on renovations, but earnings came in just below Wall Street estimates.

Sales increased despite the September disclosure from the world’s largest home improvement chain that its data systems were breached, probably affecting about 56mn payment cards.

Home Depot said it might face other breach-related costs, including legal action, that could have a material impact on results for the current quarter and beyond. Sales at stores open at least a year rose 5.2% in the third quarter ended November 2, beating the analysts’ average estimate of 5%, according to research firm Consensus Metrix.

Same-store sales increased 5.8% in the US, where Home Depot has more than 85% of its stores.

Net sales rose 5.4% to $20.52bn, while analysts on average had expected $20.47bn, according to Thomson Reuters I/B/E/S.

Third-quarter net income rose to $1.54bn, or $1.15 per share, from $1.35bn, or 95 cents per share, a year earlier.

 

JA Solar

Chinese solar company JA Solar Holdings Co reported its fourth straight quarterly profit, helped by higher demand for solar panels and modules, and raised its shipment forecast.

The company said it expects to ship 850-900 megawatts (MW) of cells and modules in the fourth quarter, up from the 785.4 MW it shipped in the third quarter ended September 30.

JA Solar also raised its 2014 shipment forecast to 3.1-3.2 gigawatt (GW) from 2.9-3.1 GW.

Third-quarter module shipment jumped to 693.5 MW in the third quarter from 445.8 MW in the second quarter, mainly due to robust growth in sales to Japan and China, the company said.

Revenue jumped 71% to $492.2mn.

JA Solar reported a net profit of $25.3mn, or 42 cents per American Depositary Share, compared with a year-ago loss of $37mn, or $1.10 per ADS.

 year.

 

Vienna Insurance

Vienna Insurance Group is turning round its problematic Romanian business but may still post a small loss in Italy next year as it unwinds a disastrous foray into car insurance there, Chief Executive Peter Hagen said.

Its Romanian business continued a fragile recovery with a €2.6mn ($3.3mn) pretax profit in the first three quarters as cut-throat competition eased.

“It is a bit early to be optimistic but there is sufficient reason to no longer be pessimistic,” Hagen said in a telephone interview on Tuesday.

Vienna’s Italian business was still losing money but not like in 2013, when a flood of claims from a ballooning business triggered a drastic cut-back.

Asked if losses would continue into 2015, Hagen said: “That may well be, but only at a very low level.”

Baader Bank analysts kept a “buy” rating on Vienna shares, saying: “We believe that Vienna’s turnaround is overall well on track, with expected reported top-line growth next year and stabilisation in Romania and Italy in the near term.”

Third-quarter group profit before tax rose 27% to €140mn as premiums climbed 1.7% to 2.06bn. Vienna’s combined ratio—a measure of profitability in the property and accident business—improved to 97.2%. Analysts had seen pretax profit up 32%.

 

EasyJet

EasyJet’s annual profits climbed on the back of rising passenger numbers and sales, the no-frills British airline said.

Net profits, or earnings after taxation, rallied 13% to £450mn ($704mn, €565mn) in the group’s financial year to the end of September, compared with 2012/13, EasyJet said in a results statement.

Pre-tax profits surged 22% to £581mn, which was slightly ahead of the group’s own forecast.

Passenger numbers jumped seven% to 64.8mn, as the airline also picked up business from rival Air France—which had to cancel flights in September because of a record two-week-long pilots’ strike.

EasyJet’s total revenues meanwhile swelled by 6.3% to £4.527bn.

“Our performance demonstrates our continued focus on cost and progress against every strategic revenue priority,” said chief executive Carolyn McCall.