Fortescue Metals revealed late Friday night that it earned a gross profit of $US152 million for the September quarter.
But the result was a loss of $US18 million "due in part to a US$68 million increase in the value of the Leucadia Note liability (held by a big New York investor and hedge fund) and a US$25 million foreign exchange adjustment.
"Fortescue is obliged to review the Note valuation at each reporting date.
"The increase in the projected liability has arisen due to a forecast increase in future iron ore prices as provided by an independent expert, the company said in commentary for the September quarter’s accounts."
The company said the ramp up of operations continued during the September quarter with a record volume of iron ore mined, processed, railed and shipped.
"This culminated in a total of 9.526 million tonnes “Mt” of Fortescue’s ore being shipped out of the Herb Elliott port to a selection of Fortescue’s 45 + customers across China.
"There were a number of operating milestones achieved during the quarter with over 10 million tonnes of ore mined during the period pushing the mining run rate to over 40 million tonnes per annum.
"The rail team made 348 train journeys from the Cloudbreak mine to the Herb Elliott port at Port Hedland for a total of 9.562 Mt transported.
"The port team produced a loading record of 182,000 tonnes loaded in one day.
"In total 57 ships were dispatched from Fortescue’s port during the quarter."
Fortescue said its exploration team continued its work out at the Solomon Group tenements "with a focus on drilling at the Firetail Bedded Brockman deposit where a current Inferred Resource of 125 Mt’s has been estimated and announced thus far (refer ASX release 20 November 2008).
"It is expected that the extensive work done over the quarter will result in an upgrading of the resource estimate over the coming months."
Fortescue said it also continued to deliver on its infrastructure sharing commitment with some 316,000 tonnes of third party ore loaded and shipped out of the Herb Elliott port facility.
On the financial side, Fortescue said it ended the period with a cash balance of US$704 million which represents an increase over the previous quarter of US$50 million.
Fortescue shares rose 8 cents on Friday to end at $4.17. The September quarter result was issued well after the market closed.
Harvey Norman shares fell by more than 6% Friday as investors exited the stock at disappointment it’s sales were not better in the September quarter.
The shares finished down 32 cents at $4.44.
But that was as much a reaction to overly optimistic forecasts from analysts and others than anything rational.
The shares had run up strongly last week on the back of overly optimistic broking reports, including one from JPMorgan that forecast a 6%-plus rise in sales.
That was pie in the eye stuff, judging from Friday’s comments from Harvey Norman and founder Gerry Harvey who warned that the falling prices of many products flowing from the rising value of the Aussie dollar, is causing pricing pressures.
In fact the performance was solid, especially in Australia where same store sales for the September quarter were up an encouraging 4.6%.
Headline sales growth for the group’s major area of business was up 5.8% which is also solid.
It seems many investors are besotted with the performance of rival BJ Hi-Fi which operates in some of the same product areas.
But Harvey Norman has greater exposure to furniture, carpets and lighting which have been impacted by the sluggish demand levels of the last 18 months.
But they will improve in coming months as the first home owner buyer/builder surge kicks in.
Harvey Norman also has underperforming businesses in New Zealand, depressed Ireland and in Slovenia.
Hence the less than stellar overall performance which saw headline sales rise 4.3% for the quarter.
Sales in Australia, New Zealand, Slovenia and Ireland totalled $1.5 billion for the three months ended September 30, compared with the corresponding period the year before.
Like-for-like sales for all of its operations during the September quarter increased by 2.1%, while like-for-like sales in Australia grew by the previously mentioned 4.6%.
That shows that the performance in the existing Australian stores was twice that of the rest of the business.
Sales comparisons in the current and January quarters will be much better as the group experienced negative sales growth a year ago for most of the two quarters.
And speaking of JB Hi-Fi, its shares closed at an all time high for the second day in a row on Friday.
They ended up 19 cents at $20.69 from the previous high of $20.50 on Friday.
They hit an intra day high of $20.95 on Friday, 4 cents under the $20.99 hit the day before.
The surge continued the trend flowing from the upbeat comments at the AGM in Melbourne on Wednesday.
Thursday was the big day when the shares jumped $1.08 or 5.56%.
JB Hi-Fi surprised the market on Wednesday with better-than-expected September quarter comparable store sales, with CEO, Richard Uechtritz telling media at its annual meeting that the Christmas trading period would be "reasonable" if the strong sales trend continued.
Like-for-like sales surged during the September quarter from 3.8% for the first five weeks of 2009-10 to 8.4% for the
