HUTCHISON Whampoa Ltd's first-half profit beat analysts' estimates after billionaire Li Ka-shing's largest company narrowed losses on high-speed mobile-phone services and boosted port and energy earnings.
Net income fell 63 percent to HK$10.7 billion (US$1.4 billion), exceeding the HK$9.1-billion median estimate of five analysts surveyed by Bloomberg News. The year-earlier profit was boosted by a HK$35.8-billion gain from selling a stake in an Indian wireless carrier.
Hutchison cut the operating deficit at its third-generation phone units in Europe and Australia by 72 percent, keeping the company on track to gain an eighth profitable business next year after US$16 billion of losses since 2003. Seven Hutchison units ranging from ports to property boosted profit.
"The worst is over for Hutchison as its loss-making 3G unit is expected to make money next year," said Kenny Tang, an associate director at Tung Tai Securities Co who recommends buying the stock. "Investors can bet on Hutchison as a defensive pick as its diversified businesses can help counter the impact of a weaker economic growth outlook."
Hutchison's stock fell 1.3 percent to close at HK$70.55 yesterday. That extended this year's share-price drop to 20 percent, compared with a 27-percent fall in the key Hang Seng Index.
First-half sales at Hutchison rose to HK$176.2 billion from HK$141.5 billion. In last year's first half, the firm gained from a stake sale in Hutchison Essar Ltd in India.
3 Group had 16.9 million subscribers in Europe and Australia as of Wednesday, a gain of 6 percent from December 31.
3 Group's loss before interest and taxes shrank to HK$3.18 billion from HK$11.3 billion a year earlier. "We aim to break even our 3G business in December at the end of this year," Li said in Hong Kong yesterday.
Hutchison Telecommunications International Ltd, of which the parent owns 59 percent, sells Apple Inc's iPhone handset in Hong Kong and Macau. Apple has reached similar accords with Vodafone Group Plc and Singapore Telecommunications Ltd.
Operating profit at Hutchison's ports unit jumped 19 percent to HK$6.85 billion, while earnings at Canadian oil unit Husky Energy Inc rose to HK$8.54 billion from HK$4.62 billion a year earlier.