Earnings Releases

Embotelladora Andina S.A’s (SNSE:AKOa) 2Q 08 revenues and adjusted net income were above our estimate while operating profit was below our expectations. Revenue growth was primarily driven by strong performance from all 3 regions, particularly Argentina. In addition, Average Selling Price (ASP) also increased significantly, which contributed to overall revenue growth during the quarter. Going forward, we continue to expect strong volume growth from all operations supporting overall revenue growth.

Embotelladora Andina S.A’s (SNSE:AKOb) 2Q 08 revenues and adjusted1 net income were above our estimate while operating profit was below our expectations. Revenue growth was primarily driven by strong performance from all 3 regions, particularly Argentina. In addition, Average Selling Price (ASP) also increased significantly, which contributed to overall revenue growth during the quarter. Going forward, we continue to expect strong volume growth from all operations supporting overall revenue growth.

ASM International N.V.’s (NASDAQ:ASMI) 2Q 08 net sales were above expectations but net income was in line with our estimate. However, the company outperformed market expectations. Going forward, despite a weak semiconductor capital spending outlook, Management anticipates continued strength in its Back-end segment and improvement in Front-end margins. Subsequently we maintain our optimistic outlook for the stock.

Barrick Gold Corporation (NYSE:ABX) announced its 2Q 08 results on 31 July 2008. The top- and bottomlines were below our estimates due to lower-than-anticipated gold production. Going forward, we remain optimistic about the company’s fundamental outlook, given its pipeline of development projects. However, we remain concerned about the impact of rising input costs.

British Airways PLC’s (LSE:BAY) released its 1Q 09 Trading Statement on 01 August 2008. Results for 1Q 09 were significantly above expectations amidst merger talks with Iberia Airlines of Spain (Líneas Aéreas de España, S.A.). However, given a downward revision in its revenue guidance, rising fuel costs, and BA’s profit warning issued on 16 July 2008

Although Brookfield Properties Corporation (NYSE:BPO) reported y-o-y declines in its net operating income and adjusted1 net income, results were above our expectations for 2Q 08. In view of this, we expect to raise our estimates and target price when we revalue the company in our next full update report.

Cott Corporation’s (NYSE:COT) 2Q 08 revenues were below our expectations while profitability was higher than our estimates due to decline in cost of sales, partially offset by higher than expected Selling, General and Administrative (SG&A) expenses. In light of strong 2Q 08 profitability growth, we are likely to revise our estimates upwards.

Although Diana Shipping Inc. (NYSE:DSX) experienced strong y-o-y growth in voyage and time charter revenues in 2Q 08, in line with our expectation, margins fell short of our expectation in 2Q 08, due to higher than expected depreciation and amortization expenses. However, as our outlook for the company remains broadly unchanged and given our positive outlook for the dry bulk shipping industry.

Embraer–Empresa Brasileira de Aeronautica S.A.’s (NYSE:ERJ) 2Q 08 performance exceeded our estimates. Therefore, we do not anticipate a change in our current ADR rating, even though the current ADR levels support a HOLD rating.

Enel S.p.A.’s (ELEI) reported strong 1H 08 results which exceeded our estimates for the period. Given the company’s strong performance during 1H 08 and current price levels, we do not anticipate a change in the current rating for the common stock until we fully reassess the company in our next update report.

Gold Fields Limited (JSE:GFIJ) announced its 4Q 08 results on 01 August 2008. For both periods, the top-line fell short of our estimates while profitability exceeded our forecasts. 4Q 08 revenue growth was driven by rising price realizations for gold, partially offset by lower production volumes. Going forward, we remain positive about the company’s exploration projects, which are expected to lift gold production volumes, although we remain concerned about rising input costs.

Imperial Oil Ltd. (TSX:IMO) reported strong 2Q 08 results, attributable to higher realized hydrocarbon prices during the quarter. However, its earnings growth was marginally impacted by rising input costs in its Downstream segment. As the common stock price has declined since the last update report and no longer supports our HOLD rating.

Lafarge S.A. (PSE:LAFP) reported y-o-y growth in its 2Q 08 revenue, primarily attributable to increased demand for cement from emerging markets coupled with the consolidation of Orascom Construction Industries Cement Group’s (Orascom) results. However, Lafarge failed to experience a strong improvement in its adjusted operating margin1, as cost reduction efforts were partially offset by rising costs. In today’s trading, Lafarge’s shares opened significantly lower following news that Orascom is likely to underperform its previous full year EPS expectation given delays in Algeria, Iraq and the United Arab Emirates. As a result of this and rising input costs, we expect to lower our estimates and target price when we revalue the company in our next full update report.

Mahanagar Telephone Nigam Limited (BSE:MTNL) declared its 1Q 09 results on 31 July 2008. Revenues were above our estimate, EBITDA was broadly in line with our estimate while operating income was below our estimate due to higher than anticipated depreciation expenses, as a percentage of revenues. Despite the mixed results, in light of strong bottom line growth and as the common stock currently trades below its fair value.

Nissan Motor Co., Ltd.’s (TSE:7201) 1Q 09 revenues were in line with our expectations. However operating and net performance fell below our expectations. We intend to marginally revise downwards our operating and net income estimates considering the prevailing significant economic slowdown experienced in North America coupled with higher-than-anticipated operating costs in 1Q 09.

Although Nortel Networks Corporation’s (NYSE:NT) top-line was above our expectation, adjusted net income was below our estimate. However, in view of Management’s unchanged FY 2008 guidance despite a challenging environment and expected operational improvements in the company outlined in our previous update report.

Shire Ltd. (NASDAQ:SHPGY) reported strong growth in revenues in 2Q 08, exceeding our expectations. Operating margin and net margins also exceeded our expectations in 2Q 08. Considering the better than expected performance by the company, our outlook for the company remains positive. Consequently we reiterate our BUY rating for the ADR.

StatoilHydro A.S.A. (OB:STO) registered strong y-o-y growth in its 2Q 08 revenue and earnings, above our expectations, driven by higher realized hydrocarbon prices across all of its business segments. Given our bullish outlook for hydrocarbon prices in the near-to-medium term and the company’s higher-than-expected performance in 2Q 08.

Sun Life Financial Inc.’s (TSX:SLF) 2Q 08 top-line was in line with our and market expectations. However, the company’s bottom-line fell short of our and market expectations, reflecting weakness in global credit markets. However, we remain optimistic about the company’s focus on expanding its presence in emerging markets in Asia and its strong delivery of growth and expansion in its areas of operation.

Tele Norte Leste Participações S.A.’s (SAO:TNLP4) reported 2Q 08 results after consolidating Tele Norte Celular Participações S.A.’s (TNCP) contribution, which was acquired on 03 April 2008. Revenues from TNL, excluding TNCP, were marginally above our expectations. However, adjusted1 EBITDA and adjusted operating income, excluding TNCP, was below our expectations. We expect TNL’s wireless and broad band businesses to drive top-line, going forward.

Total S.A. (PSE:TOTF) reported strong y-o-y growth in revenues in 2Q 08, driven by higher realized crude oil and natural gas prices. Operating margin improved on y-o-y basis given the company’s increased operating efficiencies, partially offset by higher purchase costs within its downstream segment. Going forward, an increase in crude oil prices in line with our investment horizon is likely to support expansion in the company’s top-line over our investment horizon

News

The Agnico-Eagle Mines Limited (NYSE:AEM) NYSE common stock has depreciated significantly since our 1Q 08 update report, reflecting negative reaction to weak 2Q 08 results and falling gold prices. This decline is in line with our expectations, and we see further downside potential from current levels. Therefore, we maintain our SELL rating.

Koninklijke Ahold N.V.’s (ASM:AHLN) 2Q 08 revenues declined primarily due to the poor performance by the US segment which was partially offset by strong performance from its Europe segment during the quarter. However, we continue to expect revenue growth to be supported by its Europe retail segments, particularly from the Albert Heijn, retail segment. However, we remain cautious about the current slowdown in the US economy and intense competition in the retail industry, which we believe will impact overall revenue growth, going forward.

New Valuations

Banco Itau Holding Financeira S.A. (SAO:ITAU4) reported modest y-o-y growth in managerial financial margin driven by strong y-o-y growth in loan portfolio despite the unfavorable interest rate scenario in Brazil, but limited by the impact of increasing inflation and competition on the bank’s non-interest income. Despite the increase in lending, the bank was able to enhance its asset quality during the quarter, although we expect a slight deterioration in the future as the loan portfolio expands.

CNinsure Inc. (NASDAQ:CISG) reported healthy top-line growth in 1Q 08. However, operating margin declined y-o-y due to an increase in operating expenses resulting from an increase in commission and fee expenses, selling expenses and general and administrative expenses. However, strong top-line growth resulted in 35.9% y-o-y growth in net income in 1Q 08. We are confident that the company’s aggressive organic and inorganic growth strategy will deliver significant benefits in the future.

Grubb & Ellis Company (NYSE:GBE) reported weak results in 1Q 08, attributable to higher operating expenses which outpaced revenue growth during the quarter due to the unstable housing and debt market and the deteriorating US economy. Moreover, ongoing weakness in US money markets may have a negative impact on the company’s business.

We have revised our revenue estimates upwards for Millicom International Cellular S.A. (NASDAQ:MICC) FY 2008 and FY 2009 due to anticipated strong performance in revenues from Central America, South America, Asia and Africa driven by an increase in attributable subscriber-base. In 2Q 08, EBITDA margin declined due to an increase in Sales & Marketing expenses, as a percentage of revenues. In addition, adjusted operating margin declined due to an increase in depreciation and amortization expenses, as a percentage of revenues.

Mitsubishi UFJ Financial Group, Inc. (JSE:8306) reported a 5.7% y-o-y decline in gross profit in FY 2008, mainly due to a decrease in net fees and commissions income and net other business profits. This was partially offset by growth in net trading income. We continue to believe that a slowdown in the US economy, tight credit market conditions and rising oil and commodity prices will impact Japanese exports and consumer spending, two of the main drivers of the Japanese economy, going forward.

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