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Strategies & Market Trends : World Outlook

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To: Don Green who wrote (1459)	3/14/2003 4:50:55 AM
From: GUSTAVE JAEGER	of 50387

Eventually, the Enron shock wave reaches Europe.... Europeans deal with megaloss syndrome Jonathan D. Glater The New York Times Friday, March 14, 2003 The staggering size of losses reported by several European companies in recent weeks may mean that future earnings reports can only look better. And that may explain, at least in part, why companies are reporting 2002 results that are so stunningly bad. Hard-hit telecommunications companies have reported the worst losses. Deutsche Telekom AG on Monday reported a loss of E24.6 billion ($27.1 billion); Vivendi Universal SA reported a shortfall of E23.3 billion; and France Telecom SA E20.7 billion. But a few other public companies also reported hefty losses: The drugmaker Roche Holding posted a E4 billion loss; Fiat SpA, E4.3 billion; and Credit Suisse Group, E3.3 billion. Such large numbers have some lawyers and accountants wondering whether executives at many companies are trying to put all possible losses - and then some - behind them, attributing them to the weak economy or previous management. Accountants refer to this as taking a "big bath": faced with reporting a large loss that investors will not like, companies exaggerate it, figuring that the slightly larger loss will not provoke a harsher response and that it will make future earnings look better. [...] iht.com

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