Petrol Price Warning As Retailers Forecast Hikes

Fuel prices are set to rise by as much as 5p a litre, according to the Petrol Retailers' Association (PRA).

It comes amid civil unrest in Syria and Egypt as well as a reduction in Libya's oil exports, which are down by a third.

The PRA's forecast follows a rise in Brent crude oil, which pushed past the $110 a barrel mark last week, a 10% increase since the end of June.

Goldman Sachs Group has also predicted that oil prices could go up to $115 a barrel in the 'very near term'.

Brian Madderson chairman of the PRA said: "UK petrol prices have not yet seen the full impact of this crude oil increase due to the rapid and slightly unexpected revaluation of pound sterling from $1.48 to $1.56.

"Therefore it was concerning to read recent comments from the City that the 'pound is overblown' and will soon come hurtling down towards the $1.45 level."

He added: "We calculate at current wholesale prices that this will add a further 5p per litre at the pump before the end of September and hit businesses and households in the pocket at a time when pundits are forecasting a continued increase in retail sales to drive growth in the economy. 

"Should the Middle East tensions escalate further and crude oil prices react accordingly, the Bank of England’s new inflation targets could be significantly challenged.

"The sooner the EU Competition investigation into allegations of oil price fixing is completed, the more certain we can be that our retail fuel prices are only being influenced by macro-economic and political factors and not anti-competitive actions of the oil companies."

The average price of petrol across the UK is currently £1.37 a litre, according to Experian Catalist.

The PRA explained that if its predictions are right and prices rise, it will be fast approaching the record high of £1.42 a litre, which the nation saw in April.

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Samsung's 2Q profit record high but below forecast

SEOUL, South Korea (AP) — Samsung Electronics reported a record-high profit for a sixth straight quarter but still disappointed investors who had higher expectations for the world's largest smartphone maker.

Samsung said Friday its April-June net profit jumped 50 percent over a year earlier to 7.77 trillion won ($6.9 billion).

The bottom line was lower than the market forecast of 7.96 trillion won, according to a survey of analysts by FactSet, a financial data provider.

Operating profit was also at a record high of 9.53 trillion won, up 48 percent. Sales rose 21 percent to 57.46 trillion won.

Samsung's latest quarterly report indicates that its explosive profit growth driven by Galaxy smartphone sales may be slowing as smartphones have become mainstream in developed countries. Emerging countries remain a source of growth for smartphone vendors, but consumers there flock to cheaper smartphones, leaving smaller margin to the manufacturers.

Samsung's division that makes and sells handsets, smartphones and tablet computers was the key force behind its latest run of record-setting profit. In 2012, the mobile division contributed 67 percent of Samsung's overall operating profit.

Samsung says its mobile business posted a lower profit compared with the previous quarter on marketing costs. It was first time in a year that the mobile division reported a smaller profit than the earlier quarter.

The Galaxy S4, the latest iteration of its flagship smartphone, hit 10 million sales in the first month of its sales in May, making inroads as Apple did not refresh its iPhone and iPad. But some analysts including those at JP Morgan Chase revised down their sales forecasts of the Galaxy S4 by more than 20 percent, expecting the handset's shipments after the first quarter of launch will weaken.

Many analysts also expect Samsung to mark down the prices of the Galaxy S4 in the fall and winter quarters as rivals, including Apple, will release new models.

Samsung said the smartphone market may expand at a slower rate in the current quarter but it still plans to increase shipments. Samsung has also released variations of Galaxy smartphone series to offer cheaper handsets and fend off competition from Chinese rivals.

The South Korean company is the world's largest smartphone maker. In the January-March quarter, it sold more smartphones than next four vendors combined and one in every three smartphone sold in the period was made by Samsung, according to market researcher IDC.

The company also said Friday that it plans a record-high capital expenditure for this year. Out of 24 trillion won ($21.6 billion) of annual capital spending, 13 trillion won will go to its semiconductor business and 6.5 trillion won will be spent on its display panel business.

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Samsung's 2Q profit record high but below forecast

SEOUL, South Korea (AP) — Samsung Electronics reported a record-high profit for a sixth straight quarter but still disappointed investors who had higher expectations for the world's largest smartphone maker.

Samsung said Friday its April-June net profit jumped 50 percent over a year earlier to 7.77 trillion won ($6.9 billion).

The bottom line was lower than the market forecast of 7.96 trillion won, according to a survey of analysts by FactSet, a financial data provider.

Operating profit was also at a record high of 9.53 trillion won, up 48 percent. Sales rose 21 percent to 57.46 trillion won.

Samsung's latest quarterly report indicates that its explosive profit growth driven by Galaxy smartphone sales may be slowing as smartphones have become mainstream in developed countries. Emerging countries remain a source of growth for smartphone vendors, but consumers there flock to cheaper smartphones, leaving smaller margin to the manufacturers.

Samsung's division that makes and sells handsets, smartphones and tablet computers was the key force behind its latest run of record-setting profit. In 2012, the mobile division contributed 67 percent of Samsung's overall operating profit.

Samsung says its mobile business posted a lower profit compared with the previous quarter on marketing costs. It was first time in a year that the mobile division reported a smaller profit than the earlier quarter.

The Galaxy S4, the latest iteration of its flagship smartphone, hit 10 million sales in the first month of its sales in May, making inroads as Apple did not refresh its iPhone and iPad. But some analysts including those at JP Morgan Chase revised down their sales forecasts of the Galaxy S4 by more than 20 percent, expecting the handset's shipments after the first quarter of launch will weaken.

Many analysts also expect Samsung to mark down the prices of the Galaxy S4 in the fall and winter quarters as rivals, including Apple, will release new models.

Samsung said the smartphone market may expand at a slower rate in the current quarter but it still plans to increase shipments. Samsung has also released variations of Galaxy smartphone series to offer cheaper handsets and fend off competition from Chinese rivals.

The South Korean company is the world's largest smartphone maker. In the January-March quarter, it sold more smartphones than next four vendors combined and one in every three smartphone sold in the period was made by Samsung, according to market researcher IDC.

The company also said Friday that it plans a record-high capital expenditure for this year. Out of 24 trillion won ($21.6 billion) of annual capital spending, 13 trillion won will go to its semiconductor business and 6.5 trillion won will be spent on its display panel business.

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Starbucks beats on higher sales, lifts forecast

NEW YORK (AP) — Starbucks says its profit climbed 25 percent in the latest quarter as its coffee costs eased and more caffeine-addicted customers flocked to its cafes around the world, with people in the U.S. spending a little more on items such as revamped sandwiches and new salads.

The results topped Wall Street expectations, and the company raised its full-year guidance. Starbucks' shares were up almost 7 percent in aftermarket trading.

The Seattle-based chain, which has more than 19,000 locations around the world, said global sales rose 8 percent at cafes open at least 13 months, with all regions registering growth. In its flagship U.S. market, the figure rose 9 percent.

The performance is in contrast to McDonald's Corp., which reported an underwhelming 1 percent increase in U.S. locations open at least a year earlier this week. The fast-food chain had partly blamed economic conditions, saying people have been reluctant to eat out.

Troy Alstead, chief financial officer for the chain, said the results demonstrate people's loyalty to the Starbucks brand, despite factors such as bad weather or a weak economy cited by other companies for underwhelming results in the quarter.

"We have some resilience, some insulation," Alstead said.

"Starbucks today exists within a universe of one," CEO Howard Schultz emphasized n a call with analysts.

Starbucks has been making a number of changes to drive up sales. In April, it rolled out revamped sandwiches in new packaging that come with slightly higher prices; the new egg salad sandwich, for example, costs $5.25, up from $5.15 previously.

New salads and grain bowls were also introduced at about $7 per box.

Moving forward, the company has been testing new baked goods — acknowledging that its baked goods don't have a great reputation. It also announced that it's teaming up with Danone to offer new, branded Greek yogurt parfaits that are set to start replacing its current offerings in cafes by next year.

It's also pushing aggressively to enroll people in its loyalty program, offering incentives such as a $5 load on cards for people who sign up. The benefits are twofold; Alstead said people tend to visit more often and spend more once they enroll.

In the meantime, Starbucks is also benefiting greatly from lower coffee costs, which are expected to continue for at least another year and half. Despite its lower costs, the company last month instituted price hikes in the U.S., a move which should help widen its operating margins even further.

Starbucks said sales rose 9 percent in China and the greater Asia region for the quarter. It also managed to increase sales by 2 percent at established cafes in Europe, where the company has been struggling. The company has been closing underperforming stores and licensing out operations in other regions.

Looking ahead, it cautioned that sales at established locations would ease back into the 5 percent to 7 percent range it saw in the first half of the year.

Starbucks Corp. earned $417.8 million, or 55 cents per share, for the period ended June 30. That's up from $333.1 million, or 43 cents per share, a year ago.

Analysts on average expected 53 cents per share.

Revenue rose to $3.74 billion, more than the $3.72 billion analysts had forecast.

It now expects earnings per share in the range of $2.22 to $2.23, up from $2.12 to $2.18.

Its shares rose to $72.30, after closing up 2 percent at $68.17. Its stock is up 34 percent over the past year.

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Follow Candice Choi at www.twitter.com/candicechoi

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