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Economy Title: Companies, even Obama's Government Motors, concerned about rising fuel costs Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/de612ac2-410f-11e0-bf62-00144feabdc0.html#ixzz1F0sQw0g5 Companies around the world have begun to warn about the impact of higher fuel costs on their businesses, raising fears about profits and inflation. Companies in the most energy-intensive sectors, such as airlines, have been the first to raise the alarm, but analysts warned that a sustained period of high oil prices would have a widespread effect on earnings. Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - http://www.ft.com/cms/s/0/de612ac2-410f-11e0-bf62-00144feabdc0.html#ixzz1F0sWOPz6 On Friday, Thai Airways, the state-controlled carrier, said that it would have to review its revenue targets to assess the impact of the rise in oil prices. International Airlines Group, the owner of British Airways and Iberia, said it was “likely” that fares would rise again, following fuel surcharges already imposed, if the volatility in oil markets continued. US airlines have already been raising fares. At the start of the year, analysts at Bank of America Merrill Lynch calculated that US airlines could still achieve the same operating margins this year as in 2010, even if oil prices averaged about $102 per barrel. US crude briefly exceeded that level on Thursday. FedEx, the transport and delivery company, said last week that its third-quarter earnings, to be reported on March 17, were likely to be lower than previously indicated because of higher fuel costs and bad weather. The car industry is also likely to be feel the impact of higher oil prices, particularly in the US. General Motors and Ford, the US car manufacturers, reported fourth-quarter earnings hit by higher costs for materials, including metals and rubber, and now face a further blow. The US companies remain heavily dependent on pick-up trucks and SUVs, by far their most profitable vehicles, leaving them exposed when fuel costs rise and consumers look for more economical vehicles. Daniel Akerson, GM’s chief executive, said on Thursday: “Energy is going to be more expensive, so we’ve got to prepare for that and it’s come a little bit earlier maybe than the industry or the economy 41;.41;.41;.41;expected or wanted, so we’re going to have to react.” Not every company is yet being squeezed by the higher oil price. Jürgen Hambrecht, chief executive of BASF, the world’s largest chemicals company by market capitalisation, said on Thursday the group had been able to pass on most of the price hikes to its customers in the past year, and it was expecting to do so again. Dow Chemical of the US similarly talked about “pricing momentum”, and only a “slight, and temporary” squeeze on margins, when it reported full-year results earlier this month. However, the damping effect of higher fuel prices on economic growth in oil-importing countries is likely to mean that the impact will in time be felt across most industries. Martin Regalia, chief economist at the US Chamber of Commerce, the business lobby group, said high oil prices had a “double whammy” effect. “They raise costs for all companies, particularly those that use a lot of oil to move stuff around in trucks or aircraft, and they slow down growth because they take spending power away from consumers. And both of those factors work together to reduce profitability.” Additional reporting by Bernard Simon in Toronto, Daniel Schäfer in Frankfurt and Jeremy Lemer in New York
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#1. To: Happy Quanzaa (#0)
But the stock markets move ever higher. Until they just close.
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