Business

SAN FRANCISCO — Google parent Alphabet and computing colossus Microsoft Tuesday reported that quarterly profits climbed on demand for cloud computing enhanced with artificial intelligence.

Microsoft saw its shares rise more than 3 per cent to $341.11 on earnings that underscored the momentum of its cloud business.

Alphabet share prices, however, slipped more than 5 per cent to $129.67 in after-market trades on Tuesday despite beating overall earnings expectations as investors had evidently hoped Google Cloud would be doing better.

"Google Cloud missed consensus revenue expectations on slowing growth, and we believe consistent with the view that newer [generative artificial intelligence] workloads will take time to move the needle," Baird Equity Research analyst Colin Sebastian said in a note to investors.

Alphabet reported a quarterly profit of $19.7 billion, powered by money taken in from ads, YouTube and cloud services.

Alphabet logged $76.7 billion in revenue, versus $69 billion in the same period a year earlier.

"We see AI as a foundational platform shift and are excited about the opportunities across our business," Alphabet chief executive Sundar Pichai said during an earnings call.

"Through it all we are making sure the product works well and we are generating value."

Consumers and investors have been keenly watching how companies take advantage of artificial intelligence, and Google along with Microsoft and OpenAI are considered leaders in the technology.

But Alphabet has largely been seen as playing catch up with Microsoft, with questions over whether the mighty Google search engine will withstand developments in AI.

Microsoft was quick to beef up its Bing search engine with AI powers, but Google's search has yet to see a real threat to its dominance, and continues to hold about 90 per cent of the market worldwide.

Google, like most big tech companies, saw its share price rise steeply in 2023 as investors expected AI to generate new revenue and open new markets.

"It is a testament to the nature of Google's market dominance in search and ads that it can beat [earnings] estimates and have its stock sag immediately afterwards," said Insider Intelligence analyst Max Willens.

"Cloud computing is a much lumpier business than advertising, and one where Google is facing stiff competition."

While Google may gain traction making money from AI in the long run, its Cloud unit for now is not enough to sate investors, Willens added.

Revenue in Alphabet's cloud division, which infuses AI into its services, was $8.4 billion in the quarter, compared to $6.7 billion in the same period a year earlier.

Microsoft riding cloud 

Tech giant Microsoft said on Tuesday its profits rose in the latest quarter, boosted by its strength in the closely watched cloud services segment.

The company exceeded expectations to report a net income of $22.3 billion for the July to September period, up 27 per cent from a year ago.

All eyes have been on Microsoft's artificial intelligence and cloud computing performance, and a key aspect is the Azure cloud service, which competes with Amazon's AWS and Google Cloud.

"We're making the age of AI real for people and businesses everywhere," Microsoft Chief Executive Satya Nadella said on an earnings call.

"We are rapidly infusing AI across every layer of the tech stack and for every role in the business process to drive productivity gains."

In the latest quarter, revenue growth for Azure and other cloud services came in at 29 per cent from a year ago, a slightly faster pace than the three months prior.

Overall, the company reported $56.5 billion in sales for the quarter, also higher than anticipated.

Microsoft shares surged by 4.6 per cent in after-hours trading.

The latest earnings report comes shortly after Microsoft closed its blockbuster acquisition of Activision Blizzard, whose video games include "Call of Duty", sealing one of the biggest technology tie-ups in history.

LISBON — TAP Air Portugal earned a record net profit of 180.5 million euros ($192 million) in the third quarter, the airline said on Tuesday as the government prepares to reprivatise the firm.

The 62.2 per cent jump in profits was accompanied by a 12.5 per cent rise in revenue to 1.2 billion euros in July through September.

Passenger numbers rose by 5.2 per cent during the period — the key European summer holiday season — compared to the same time last year.

"The third quarter results are encouraging," said chief executive Luis Rodrigues, adding the airline was implementing measures to boost its rebound following two difficult years.

"The considerable rise in revenue" and the "strong trajectory of debt reduction proves the financial strength of the group in a difficult context", he added.

Portugal nationalised TAP as losses mounted during the COVID-19 pandemic, injecting 3.2 billion euros into the airline as part of a restructuring plan agreed with the European Commission.

The government recently launched the privatisation of the airline, hoping to return at least 51 per cent to the private sector, with major European airline groups Air France-KLM, Lufthansa and IAG (British Airways and Iberia) showing interest.

The government is expected soon to release a detailed list of specifications for bidders, which is due to feature commitments like developing Lisbon as a hub for operations, in particular between Europe and Brazil.

DOHA — Qatar has agreed to supply Italian firm Eni with natural gas for 27 years, the Gulf emirate's state-owned energy company announced Monday, the latest in a series of major deals.

Doha will supply one million tonnes of gas a year under the deal, QatarEnergy said, following an agreement with Eni for a share of Qatar's huge North Field gas expansion project.

In the wake of Moscow's invasion of Ukraine last year, European nations have rushed to replace lost deliveries of natural gas from Russia.

"Today, we are taking another important step in strengthening our partnership with Eni that will foster our mutual cooperation for many years to come," Qatari Energy Minister Saad al-Kaabi said.

"Together, we will continue to demonstrate commitment to the European markets in general, and to the Italian market in particular," he added.

In June last year Eni agreed a deal with QatarEnergy for a 3.1 per cent share in Qatar's North Field East project, the first phase of the Gulf emirate's expansion into the largest gas field on the planet, which extends into Iranian territory.

Deliveries of liquefied natural gas (LNG) to Italy's Tuscany region are expected to begin in 2026.

In a statement, Rome-headquartered Eni said the deal "strengthens" its partnership with QatarEnergy, adding involvement in North Field East was "in line with Eni's transition strategy, which aims to progressively increase the role of gas".

The deal with Eni follows a quick succession of historically long agreements with European firms for gas supply from Qatar.

Last week, Qatar announced a deal for 27 years with Britain's Shell and earlier in the month, France's Total announced another deal of equal length. 

Under its North Field expansion, Qatar is set to raise its LNG output by 60 per cent or more to 126 million tonnes a year by 2027.

The main market for Qatari gas has traditionally been Asia, led by countries like China, Japan and South Korea.

The deals with Eni, Shell and Total are the same length as those agreed by the China National Petroleum Corporation in June and China's Sinopec in 2022. All have set a benchmark as the longest in the LNG industry.

US giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion. 

Qatar is one of the world's top LNG producers, alongside the United States, Australia and Russia.

QatarEnergy estimates the North Field holds about 10 per cent of the world's known natural gas reserves.

TAIPEI — Taiwanese tech giant Foxconn is under tax and land use investigations at several of its sites in China, state media reported on Sunday.

Chinese authorities are inspecting Foxconn's sites in southern Guangdong province and Jiangsu in the east, as well as carrying out on-site investigations into the company's land use in central Hunan and Hubei provinces, China's state-run Global Times reported.

The newspaper did not specify what authorities are looking into, nor any offences that Foxconn may have committed.

"Compliance with the law is a basic principle for our group worldwide," Foxconn said in a statement on Sunday.

"We will actively cooperate with the relevant [authorities] for the operations concerned," it added, without providing further details.

Foxconn is one of the world's largest contract producers of electronics, and is a key supplier for Apple's iPhones.

It is also China's largest private-sector employer, with more than a million employees nationwide.

The investigation comes two-and-a-half months before presidential elections in self-ruled Taiwan.

Foxconn's founder, billionaire Terry Gou, has cut ties with the firm to focus on his long-shot bid to run as an independent candidate in Taiwan's January 2024 elections.

The 72-year-old failed to become the opposition Kuomintang (KMT) party's nominee in 2019 and analysts say he has only a slim chance of winning.

FRANKFURT — Christiane Benner will become the first woman to lead Germany's biggest union when she takes the helm at IG Metall next week. But the milestone comes as the once mighty industrial sector battles a series of crises.

Soaring energy costs due to Russia's war in Ukraine, high inflation and weaker demand from key trade partner China have culminated in a manufacturing slump that has raised fears about Germany's future as an industrial powerhouse and export champion.

Benner's appointment is set to be confirmed at an IG Metall congress on Monday.

As she prepares to go to bat for IG Metall's more than two million members in sectors including the automotive, machine tool and electrical industries, Benner is clear about her priorities.

"The most important thing is keeping industry in Germany and Europe," she told AFP in an interview in her Frankfurt office.

Asked why it took so long for IG Metall, founded in 1949, to install a woman at the top, Benner chuckled.

"Ask the men!" smiled the bespectacled 55-year-old.

Benner has been a member of IG Metall since her early 20s after starting work as a foreign-language secretary at a mechanical engineering firm.

After taking time out to study sociology, she rose through the ranks at IG Metall and became the union's vice president in 2015.

Eighty per cent of IG Metall's members are men. 

De-industrialisation fears

A work and study stint in the United States in the 1990s opened her eyes to the "weakness" of American unions, Benner recalled. 

The contrast with Germany was stark, where the model of co-determination gives labour representatives a significant say in workplace decisions.

As Germany's most powerful trade union and the largest in Europe, Benner is well aware of IG Metall's influence.

"We're strong," she said.

IG Metall flexed its muscles last year and won an 8.5 per cent wage increase over two years to help compensate for inflation, a benchmark deal covering around four million workers across several sectors.

Even more daunting challenges lie ahead, as Germany's long-vaunted economic model is called into question and an end-of-year recession looms.

Companies in Germany's energy-intensive industries are already weighing whether to shift production to cheaper shores, a problem compounded by the lure of US green subsidies through Washington's Inflation Reduction Act, Benner said.

"We're seeing a creeping dismantling of industry and jobs," she warned.

To prevent a dreaded "de-industrialisation" of Europe's biggest economy, Benner is in favour of discounted electricity prices for industrial firms.

The proposed subsidy has been a topic of fierce debate within Germany's coalition government in recent months. 

But Chancellor Olaf Scholz, who like Benner is a member of the centre-left Social Democrats, has yet to back the idea, fearing it could slow the transition towards renewable energies. 

Retaining talent 

Adding to Germany's woes are long-running structural problems such as a shortage of skilled workers in an aging country, and foot-dragging on digitisation.

More than 2.6 million young adults in Germany under the age of 35 have no vocational qualification, despite a growing need for highly qualified employees as new technologies transform businesses.

IG Metall was working hard to increase the number of apprenticeships and make on-the-job training more attractive, Benner said.

Hoping to make heavy industry a more appealing career choice, Benner also advocates a better work-life balance and supports a four-day work week for those who want it. 

She also wants to narrow the gender pay gap in a country where men still earn 7 per cent more than women doing the same job.

But first up on her to-do list will be next month's wage negotiations with steel bosses. 

Benner will be pushing for a similar 8.5 per cent salary bump for the sector and a reduction in working hours from 35 to 32 hours a week, without loss of pay. 

NEW DELHI — Google plans to manufacture its flagship Pixel 8 smartphone in India, CEO Sundar Pichai said on Thursday, joining a growing list of global tech companies limiting their supply chains' dependence on China.

Pichai's announcement follows US tech rival Apple's release last month of its latest iPhone, including units made in India, as tech giants target the South Asian nation's fast-expanding market and abundant supply of cheap skilled labour.

"We shared plans at #GoogleforIndia [event on Thursday] to manufacture Pixel smartphones locally and expect the first devices to roll out in 2024," Pichai said on X, formerly known as Twitter.

Pichai added that Google appreciated the "support for Make in India" — a flagship policy of Prime Minister Narendra Modi's government, offering faster business clearances and financial incentives for manufacturing goods in the country.

New Delhi has ramped up its production and exports of mobile phones and other electronic goods since the scheme was introduced.

India's mobile phone exports almost doubled to $8.5 billion year-on-year in 2022-23, according to official figures. 

Google senior vice president Rick Osterloh said the firm sees "an even greater opportunity to make Pixel smartphones available to more people" in India. 

"In recent years, India has established itself as a truly world-class hub for manufacturing, resulting in a thriving environment for businesses to flourish," Osterloh said in a statement.

The company intended to "start with the Pixel 8, and will partner with international and domestic manufacturers to produce Pixel smartphones locally", he added. 

India, home to the second-highest number of smartphone users after China, has set a target of producing about $300 billion worth of local electronics and smartphones by 2025-26.

Google already has significant investments in the country and also partnered with Reliance Jio, owned by India's richest man Mukesh Ambani, on a 4G-enabled, low-cost smartphone for the local market. 

Earlier this year, Taiwanese electronics giant Foxconn, the world's biggest contract electronics manufacturer and a principal assembler of iPhones, bought a huge tract of land on the outskirts of India's tech hub of Bengaluru. 

It was seen as a part of Apple's push into India — the world's most populous and fastest-growing major economy — and its efforts to diversify production away from China. 

Electronics giant Samsung also runs the world's largest mobile phone factory on the outskirts of New Delhi with a capacity of about 120 million units per year. 

DOHA — Qatar has agreed to supply British firm Shell with natural gas for 27 years, the Gulf emirate's state-owned energy company announced on Wednesday.

Since Moscow's invasion of Ukraine last year, European countries have scrambled to replace lost deliveries of natural gas from Russia. 

Qatar will supply 3.5 million tonnes of gas a year under the deal, QatarEnergy said, following two agreements with Shell for a share of the Gulf state's huge North Field gas expansion project.

"We are delighted to sign these two long-term LNG sale and purchase agreements with Shell that will further enhance our decades-long relationship and strategic partnership in Qatar and around the world," Qatari Energy Minister Saad Al Kaabi said. 

"These agreements reaffirm Qatar's commitment to help meeting Europe's energy demands and bolstering its energy security with a source known for its superior economic and environmental qualities," he added,

In October last year, Shell inked a deal with QatarEnergy for a 9.4 per cent stake in Qatar's North Field South project, the second phase in the expansion of the world's largest gas field, which extends under the Gulf into Iranian territory.

In July the same year it also agreed to a 6.25 per cent share in the first phase of the expansion, North Field East.

Deliveries of the liquefied natural gas (LNG) to Rotterdam are expected to begin in 2026.

The deal with Shell is equal in length to an agreement with France's TotalEnergies announced earlier this month for a 27-year supply of natural gas.

Under its North Field expansion, Qatar is set to raise its output of liquified natural gas (LNG) by 60 per cent or more to 126 million tonnes a year by 2027. 

The main market for Qatari gas has traditionally been found in Asia, led by countries like China, Japan and South Korea.

The deal with Shell and Total is also the same in length to those agreed by the China National Petroleum Corporation in June and China's Sinopec in 2022. All have set a benchmark as the longest in the liquefied gas industry.

US giants ConocoPhillips and ExxonMobil have also signed deals to partner in the expansion. 

Qatar is one of the world's top LNG producers, alongside the United States, Australia and Russia.

QatarEnergy estimates the North Field holds about 10 per cent of the world's known natural gas reserves.