Reports from Around the Globe

*Nokia is up smartly after it reported a really significant rise in Q3 earnings, with revenues up 13% to euros 3.32 bn and net earnings up 32% sequentially to euros 757 mn (vs a prior year loss), thanks to network deals, particularly with China, which should continue to roll in and may pay off better than so far. Of the total profits about euros 2 bn was from tax benefits offset by a charge as NOK wrote down euros 1.2 bn in goodwill for HERE, its mapping and naviagation business which made no profit in Q3.

Analysts had expected merely euros 359 mn, so this was hugely ahead of expectations. Core operating margins topped 13.5% vs forecasts of 10% by its follower analysts, also up from Q2 level of 11%. NOK rose 6% to $8.42/sh as its CEO Rajeev Suri also forecast a better outlook for 2015. He said performance of its networks business, once considered a dead end “was particularly satisfying” but warned that some of its gains were thanks to “unique elements” last quarter. Suri also forecast full year margins of 11% at least. Note that HERE, unlike its rivals, is sold as original equipment to car-makers, not to end-user consumers.

*Marine Harvest Group is fishing for compliments as well as salmon after reporting strong Q3 earnings which for some reason were not posted on e-trade despite these being an NYSE issue. MHG earned NOK 912 mn in Q3 before tax earnings, up from NOK 793 mn a year earlier. This resulted from its greater use of forward and futures rather than spot prices, which worked because of a recent price drop over halted sales to Russia from sanctions. Hedging can go wrong but this time it worked. Its sales also rose sharply to NOK 6.202 bn vs prior year 4.307 bn. NOK 1.10 of dividend was declared. MHG expects to produce 414,000 metric tonnes of salmon this year, unchanged, and 430,000 tonnes next year, not including Acuinova in Chile where MHG is in the process of acquiring further fish farm capacity. What may work is that MHG is now processing its own feed for salmon and the new unit is already profitable according to CEO Alf-Helge Aarskog in its first quarter of operations. It reminds me of when my kids raised guppies. The first were cheap by the fishmeal cost a bucket. Note that Canadian salmon fetches a lowly NOK 4.7/kilo of earnings before taxes while Norwegian and Scotting command NOK 9.71 and 9.95 resp.

*Yandex, the Dutch operator of search engines in Russia, Ukraine, and Turkey, said its full-year revenues are expected to be 27 to 30% over last year's, according to Reuters. This is marginally higher than YNDX's earlier forecasts. In Q3 its sales rose 28% over prior year, to 13.1 bn rubles, or $314.5 mn, helped by the currency's swoon. Net profit at Rs4.4 bn was down 12% from last year. There were two divergent reasons, first a rise in coreign exchange gains of Rs1.4 bn, offsetting a drop because it did not repeat its 75% sale of Yandex Money to a bank, Sberbank, which occurred in Q3 last year producing a Rs2 bn gain. YNDX controls 60% of Russian search and has 43.8 bn in cash, cash equivalents, and deposits. That is over $1.05 bn

*To finish with GlaxoSmithKline whose results I touched upon yesterday, Barclays upped GSK to outperform from market perform today. Its sales went down 10% y/o/y to GBP 5.7 bn. GSK eps in Q3 was flat at 27.9 pence but well ahead of the Dow Jones analyst forecast of an average of 24 pence. The upbeat management forecast was based on operational efficiencies and a part-spinoff of GSK-controlled ViiV which makes HIV meds, valuing ViiV at as much as GBP 10 bn. It also expects gains from its trades with Novartis and Eli Lillyto specialize more. GSK also is selling off older medicines which are losing profitability to smaller drug firms.

Since this is a dividend stock for us, note that GSK is paying out some 75% of its earnings in keeping its payout level, rather than raising it. That means longer-term its drug business can suffer from lack of R&D unless CEO Andrew Witty's restructuring measures work in saving $20 bn as expected. GSK's va;iatopm os abpit GBP68 bn so this stuff matters. We want that 6% dividend but we also want a healthy pipeline. And of course no repeat of the $500 mn Chinese fine for corruption. With the stock up over the past 2 days our yield is now 5.85%, still tempting.

*Unilever reported today that its sales growth hit a 5-yr low. This led Martin Ferera to boast about how much better Reckitt Benckiser is doing. But another contributor, Harry Geisel, sole RBGLY at a nice profits. We lack a party line. Martin writes that Reckitt's core business (excluding pharma, which is being spun off) is growing 3.7%, almost twice the rate at UNA whose products moreover are more susceptible to white labelling. Reckitt is moving away from household goods like soap and more into personal healthcare.

*Orocobre issued another release stating that its Jujuy (Argentina) Solar de Olaroz lithium mine is on schedule to open next month and still on budget. How boring. The stock should go up eventually when people stop imaging that the Peronist govt is going to nationalize anything in which Jujuy province and Japan's Toyota have invested. OROCF is our play on auto batteries.

*Novartis is adding ankylosing spondylities to the list of diseases for which its secukinumab (AIN457) can treat, following its approval earlier this week for trating plaque psoriasis. Both are auto-immune diseases which respond to a blocker of IL-17, an inflammation protein. While the PP formulation may be approved this winter, the AS version may not get FDA okay until later in 2015.

*Vale said it will produce a record volume of iron-ore this year despite the 40% drop in iron ore prices. Gaining market share against small players is the motive shared apparently by Rio Tinto and BHP Billiton, the other big producers.

No Luddites in Bangalore

*Bloomberg reports that Infosys's new CEO wants to boost the Indian software services firm into artificial intelligence, for which he is hiring. AI uses automation rather than engineers. CEO Vishal Sikka may have to do deals to find AI people and tech, rather than “yesterday's technology.” Sikka also doesn't want to buy growth by dumb acquisition he told Bloomberg, modelling his INFY strategy on the Industrial Revolution in 19^th century Britain. He notes that automation then did not kills jobs and make people irrelevant. In fact it made everything more productive. “Technology in the grand scheme of things has nothing to do with employment.”

*Veresen declared a C$0.08833 dividend payable to shareholders at the end of Oct. onNov. 21 and it can be reinvested at a 5% discount if you are Canadian. Of course we are not Canucks but that is still no excuse to take a gun to the Ottawa Parliament. FCGYF.

*Nomura still expects Altice SA to push to take over Portugal Telecom despite OIBR trying to talk its way out of the unwanted offer. It may leave PT with a call option, the brokerage writes. PT is up 5.15% on this forecast. Your editor admits that she has stayed in Lisbon by the Parque Eduardo VII, and in the Algarve at Vale Covo in Tivoli hotels owned by Rio Forte, the bankrupt Luxembourg holding company of the Espirito Santo bankster family. There are 10 in Portugal and 2 more in Brazil. The hotels still operate and sign up guests on-line, my travel agent cousin by marriage reports. Rio owes euros 900 mn (about $1.2 bn) to PT. Morgan Stanley says PT shares are worth 79 euro cents.

*Another beaten down share is Gemalto suffering from Apple's new SIM card links with credit card companies which GMLTY CEO Olivier Piou says are mistakenly perceived as a threat. Harry Geisel notes that the markets are not buying his story that GTOMY hardware will still be necessary. Harry's stock is off over 20% from our recent buy level. Luckily I have fewer shares than he does.

GTOMY Q3 revenue rose 5% to euros 626 mn as reported today. It confirmed its double-digit growth targets for 2014. Of course the Apple threat is further down the pike.

Irish Early Eyes

*A Irish share, Alkermes, will host a conference call next Weds at 8:30 am also. This one will be available on its website later which is acceptable.

Our FDA to allowed ALKS to file for New Drug Approval of its aripiprazole lauroxil monthly or twice-monthly injection for schizophrenia. This converts in the body to aripiprozole (Abilify), a standard treatment for the disease. It completed phase III trials and improved symptomns compared to placebo in two dosages in a statistically significant degree. The FDA has to give approval by August 2015. ALKS had a rush of insider buys of its shares on the news of 10% by the CFO and COO in Waltham Mass, of 10% by the CEO in Ireland, and lesser amounts by others in the know. Irish biotech research is under a cloud because of broken tax inversion deals, but we stand behind our pick. Insiders sell for many reasons but they buy for only one: to make money.

*Paddy Power plc reports Nov. 18 on its interim results at 8:30 am NY time. I need a volunteer in Europe or an earlier riser than I am in the USA. It will do an investor day in Sydney Australia on Oct. 24 if anyone Down Under is game for gambling.

Fund news

*Mongolia Growth Fund says it is accelerating its run for profits by leveraging commercial real estate revenues by leasing and offering services. While it is divesting laggard performers and land banks outside the heart of the city, it is spending money on its flagship commercial project, Tuguldur Center, which is due to start rentals next month. This is the place to go in Ulaan-Baatar. MNGGF is also considering substituting jv's providing finance for its current bank loans as interest rates threaten to rise.

*Sweden's Investor issued an interim statement for Sept. 30 when the net asset value hit SEK 246.8 bn, or SEK 324/sh, up SEK 14.3 bn or SEK 19/sh in the quarter. It bought another 15.8 mn shares in Wartsila, doubling its stake to 16.8% and becoming the largest shareholder in the Finnish firm. It also recd a capital distribution from Molnlyke Health Care. About half the rise in NAV in the quarter restuled from the diverstiture of Lindorff being completed in Q3.

Net profit in Q3 (including unrealized gains) came to SEK 37.693 bn (SEK 49.48/sh), up 20% year over year. Over 87 90% came from what IVSBF calls its core portfolio and the rest from financial investments. The investing arm of SEK Bank also uses leverage, which ran at nearly 9% in the quarter.

*Africa Growth Fund is down, which my informant, Soleiman the technician, says is due to the fall of the cedi over fear of Ebola outbreaks. He rightly notes that Lagos in his homeland managed to deal with a case of the dread disease without any contagion. Actually there have been no cases to date in Ghana.

What is cool about AROFF is that it owns Naspers under a paired trade shorting Tencent. Mr. Daniel, its manager (located not in Accra but in Capetown) says this is because NPSNY trades at or even at a discount from its NAV based on TCTZF. There is no recognition of NSPNY's other African businesses, like pay-TV, which had $1 bn in sales and $420 mn in profits last year, because the So. African bourse is so bearish on local shares.

Neiges d'antan

*Paul Renaud graciously accepted my compliments on his pick of Demco PCL which has quadrupled its valuation since he tipped it here. The stock trades only in Thailand and is a consistent performer. I hold it in my HSBC bank account although the UK brokerage now has stopped trading Thai stocks regularly. Paul edits www.Thaistocks.com

Oops

*The US bid-ask spread on Bavarian Nordic is $32-32.25 but it is not showing correctly in pink sheets under BVNKF. You have been warned. BVNRY works. My note yesterday on Ebola jabs said that GSK would be developing one by the end of this year and that a sub ofJohnson & Johnson would develop another based on Bavarian's finds next year. In fact JNJ will combine the Bavarian find with another from its own Euroland sub, Jensen, and it will hit trials by May with 250,000 doses. JNJ is investing $200 mn in this production.