Morning business news - December 7Friday 07 December 2012 11.45
EIRCOM REPORTS 7% DROP IN QUARTERLY REVENUES - Three month figures to the end of September from Eircom show a fall of €26m, or 7%, in revenues compared to the same period last year. The company also saw a drop of 4% over the year in the number of broadband customers.
Eircom's chief financial officer Richard Moat says that like many other business, Eircom is experiencing extremely difficult trading conditions while competition is very tough. Despite the 10% fall in earnings, he said the company is still doing better than its business plan had predicted. That business plan has forecast that the company would cut 1,000 jobs but Eircom recently increased that target number to 2,000. Mr Moat says Eircom management wanted to make sure that the company was put on a sustainable course for all its workers and it was decided that more cuts would have to made to achieve this. He says it is Eircom's ''firm intention'' that most of these redundancies would be voluntary or through retirements.
The Eircom CFO says the company continues to invest in the rollout of high speed fibre broadband - when this is finished in December 2014 it will be able to offer high speed broadband to 1 million homes or businesses. After the recent 4G spectrum auction, Mr Moat says that Eircom will also begin to roll out new fourth generation movie services as fast as it can.
MORNING BRIEFS - Home builder Abbey, which is listed on both the Irish and London Stock Exchanges, has announced a half year profit before tax of just under €6m. That is up substantially from the €3.4m profit it made over the same six month period in 2011. It housebuilding division reported 157 sales up from 141 last year. The bulk of those in the UK but 21 were recorded in Ireland, up from 19 the same time last year.
*** Reed Hastings, the chief executive of Netflix, is in a bit of hot water with the SEC - the regulator for stock-exchanged listed companies in the US. He posted on Facebook yesterday that in June users of Netflix, the online film and television service, had watched more than 1 billion hours of content. That one billion figure is something of a milestone for the company. However, he received a notice from the SEC informing him that it is looking into whether he may have breached stock exchange rules. The SEC argues that posting to his 244,000 friends on Facebook does not count as public disclosure and is looking in to whether he may have disadvantaged investors by failing to properly and publicly disclose material information about the company to them.
*** Ireland is ranked tenth on a list of EU nations ranked by the level of spend on research and development by private companies. The survey is based on a sample of 1,500 companies which, between them, account for 90% of the money spent globally on researching and developing new products and services. Overall Ireland accounted for 1.7% of the spend on R&D within the EU. Considering that last year Ireland accounted for just 1.3% of economic output within the EU that qualifies as a decent result. Ireland also showed the fourth highest growth rate in spending on R&D.