Japan’s Kobe Steel cheating scandal widens
Japan’s Kobe Steel cheating scandal widens
The bombshell admissions by Japan’s third-largest steel maker sent its shares plummeting again, with the scale of the misconduct dealing a body blow to the nation’s reputation as a high-quality manufacturing destination.
Investors, worried about the financial impact and legal fallout, have wiped out about $1.8 billion (SR6.75 billion) off Kobe Steel’s market value this week after the firm said about 200 companies were affected by its cheating.
On Friday, the company said it found data tampering in its steel wire products. Customers have said there are no problems with the safety or function of the products, the spokesman said.
Chief Executive Hiroya Kawasaki will brief media as the crisis ripples through supply chains across the world after the firm admitted at the weekend it had falsified data about the quality of aluminum and copper products used in cars, aircraft, space rockets and defense equipment.
Boeing has some of the falsely certified products, a source with knowledge of the matter told Reuters, but stressed that the world’s biggest maker of passenger jets does not as yet consider the issue a safety problem.
More than 30 non-Japanese customers including Daimler and Airbus had been affected by the firm’s data fabrication, the Nikkei newspaper reported on Friday.
A Kobe Steel spokesman said the companies received its products but would not confirm they had any of the falsely certified components.
Nuclear power plant parts are the latest to join the list of affected equipment as Fukushima nuclear operator Tokyo Electric Power (Tepco) said on Friday it had taken delivery of pipes from Kobe Steel that were not checked properly.
The pipes were delivered to its Fukushima Daini station, located near the destroyed Fukushima Daiichi plant, but have not been used, Tepco said, adding it was checking all its facilities.
Faulty parts have also been found in Japan’s famous bullet trains that run at speeds as high as around 300 kilometers per hour and a space rocket that was launched in Japan earlier this week. One bullet train operator has already said it will seek compensation from Kobe Steel.
The government has ordered Kobe Steel to address safety concerns within about two weeks and report on how the misconduct occurred in a month.
No safety issues have yet been identified in the unfolding imbroglio.
Kobe Steel shares fell nearly 9 percent on Friday and have fallen more than 40 percent since the scandal broke.
The steel maker faces a range of legal risks, including compensation sought by clients or their customers, penalties for violating unfair competition laws for false representation, shareholder lawsuits for the fall in the company’s stock price and class lawsuits from overseas customers seeking punitive damages, a lawyer said.
“It is hard to predict the extent of legal costs,” said Motokazu Endo, a lawyer at Tokyo Kasumigaseki law office.
“We cannot rule out the possibility that this will shake Kobe Steel to its foundation.”
Microsoft beats Wall Street targets on cloud services revenue
- Revenue for the company’s LinkedIn business and job network grew 37 percent from the year-ago quarter, while its Dynamics 365 online business application suite posted a 61 percent increase
- Net income rose to $8.87 billion, or $1.14 per share, from $8.07 billion, or $1.03 per share, in the year-ago fourth quarter
NEW YORK: Microsoft Corp. on Thursday posted quarterly profit and revenue that beat analysts’ estimates, as more businesses signed up for its Azure cloud computing services and Office 365 productivity suite.
The company’s flagship Azure cloud product recorded revenue growth of 89 percent in the fourth quarter ended June 30. Its shares rose nearly 4 percent in after-hours trading.
Much of Microsoft’s recent growth has been fueled by its cloud computing business, which has benefited from companies rushing to shift their workloads to the cloud to cut data storage and software costs.
“The combination of the cloud, which is a megatrend that’s going to last for years to come, and the execution, this is company that knows how to sell and be innovative — it’s hard to argue with anything here,” said Tom Taulli, InvestorPlace.com analyst.
Microsoft shares have risen 180 percent since Satya Nadella took over as chief executive in 2014, refocusing the company on cloud computing rather than PC software. Its market cap edged above $800 billion for the first time earlier this month.
Azure has a 16 percent share of the global cloud infrastructure market, making it the second-biggest provider of cloud services after Amazon.com Inc’s Amazon Web Services, according to April estimates by research firm Canalys.
Revenue at Microsoft’s productivity and business processes unit, which includes Office 365, rose 13.1 percent to $9.67 billion, topping analysts’ average expectation of $9.65 billion, according to Thomson Reuters I/B/E/S.
“This was another gem of a quarter from Microsoft as Nadella’s cloud vision is coming to fruit on the heels of massive Azure growth and secular tailwinds,” said Daniel Ives at research firm GBH Insights.
Revenue for the company’s LinkedIn business and job network grew 37 percent from the year-ago quarter, while its Dynamics 365 online business application suite posted a 61 percent increase.
The combination of those two services highlights Microsoft’s rise as an alternative to Salesforce.com Inc, which dominates the customer relationship management market, said Johnny Won, founder of Hyperstop, a tech consultancy firm.
“It seems like this is actually a formidable threat to Salesforce,” Won said.
Overall, the Redmond, Washington-based software maker’s revenue rose 17.5 percent to $30.09 billion, above expectations of $29.21 billion.
Net income rose to $8.87 billion, or $1.14 per share, from $8.07 billion, or $1.03 per share, in the year-ago fourth quarter. https://bit.ly/2uOF9W1
Excluding certain items, Microsoft earned $1.13 per share, while analysts had expected $1.08.