These are stories Report on Business is following Monday, Jan. 14, 2013.
Apple Inc. shares sank today amid reports suggesting demand for the iPhone 5 is softer than projected.
Both the Wall Street Journal and the Nikkei report that Apple has reduced orders for parts such as LCD screens. Indeed, the Journal says, the tech giant slashed orders for such screens to half of what had been expected in the first quarter of the year.
Suppliers were reportedly told in December, though some observers today say this was expected.
Peter Misek of Jefferies said today that there have been big cuts in orders over the last couple of days, though he can find no evidence of waning demand for the iPhone, according to Forbes.
A fierce battle has been playing out for some time now among the world’s smartphone makers, but has recently escalated, knocking down Apple shares.
The Android system by Google Inc. had already been a worthy competitor, while, more recently, the Galaxy offerings of Samsung Electronics Co. have been generating quite the buzz and gaining markedly in the race for market share.
Even Nokia Corp. is on the upswing on better-than-expected sales projections, while Research In Motion Ltd., whose stock surged today, is nearing the Jan. 30 launch of the new BlackBerry 10.
Indeed, Samsung says sales of its Galaxy S devices, which debuted in mid-2010, have now passed the 100 million mark.
Former Nortel officials acquitted
Three former executives of ill-fated Nortel Networks Corp. were acquitted today on fraud charges after a long-running trial.
Mr. Justice Frank Marrocco of the Ontario Superior Court found former CEO Frank Dunn, former CFO Douglas Beatty and former controller Michael Gollogly innocent, The Globe and Mail's Janet McFarland reports.
They had been accused of manipulating financial statements in 2002 and 2003 in a bid to trigger bonus payments.
Judge Marrocco said he was not convinced there were fraudulent manipulations of Nortel’s earnings in 2002 or 2003, and said he accepted evidence that the men would have earned their bonus payments in the first quarter of 2003 even if they had not used accounting reserves to push the company to profitability in the quarter.
Mining sector sees deal, offer
The mining sector is heating up today, with three notable developments.
Canada’s Harry Winston Diamond Corp. is selling its diamond jewelry and watch unit to The Swatch Group Ltd. for $750-million (U.S.), and will focus on its mining business, The Globe and Mail’s Bertrand Marotte reports.
“At the time that we purchased the Harry Winston brand, resource investment opportunities for diamonds were rare and expensive following the euphoria of the Canadian diamond discoveries, and the involvement of the large international mining companies,” said Harry Winston chief executive officer Robert Gannicott.
“Today there is a range of diamond resource opportunities while the value of heritage luxury brands has increased dramatically,” he added in a statement.
“This transaction represents a sound return on our original investment. It will leave us well equipped to realize upstream opportunities in an environment where cash has become a strategic resource while preserving and expanding our relationship with the downstream diamond business.”
As that deal was playing out, Alamos Gold Inc. launched an unsolicited cash-and-stock bid valued at $780-million (Canadian) for Aurizon Mines Ltd.
Alamos also disclosed it had already acquired some 26.5 million shares, or about 16 per cent of the target stock. It also said it has the backing of some of its target shareholders.
“In addition to the Aurizon Shares we recently acquired, shortly before announcing our offer, we approached a select few major institutional holders of Aurizon shares,” said Alamos CEO John McCluskey.
“Each of these holders was supportive of us making the offer … We believe the combined companies will form one of the strongest and lowest risk production and growth profiles in the gold sector today”
And, lastly, Russia’s ARMZ, which already owns more than 51 per cent of Uranium One Inc., struck a $1.3-billion deal to buy the rest of the company at $2.86 a share.
- Swatch Group buys Harry Winston brand for $750-million
- Alamos makes $780-million takeover bid for Aurizon Mines
- Russian company offers $1.3-billion to buy rest of Uranium One
Obama hardens stance
President Barack Obama says he's willing to discuss further spending cuts with Republicans, but not under threat of a default.
Mr. Obama used a press conference today to harden his position on the next phase of Washington’s protracted budget battle, saying he would not negotiate the raising of the debt ceiling, The Globe and Mail's Kevin Carmichael reports.
With the “fiscal cliff” averted, the budgetary focus in Washington has shifted to the debt limit, which already has been breached, forcing the Treasury to resort to accounting manoeuvres to pay the government’s bills.
OECD sees weak Canada
The OECD’s latest indicators point to a “stabilizing” outlook in most of the world’s big economies, but weaker signals in Canada and Russia.
The leading indicators published today by the Organization for Economic Co-operation and Development indicate “economic growth firming” in the United States and Britain, and better signs in China and India.
In Europe, the indicators for the 17-member euro group show stabilization, while in Brazil and Japan there are “tentative signs” of that.
But Canada and Russia “continue to signal weak growth prospects,” the organization said.
Iceland’s central bank chief is fretting over the weakness of his currency, the krona, telling Bloomberg News in an interview that “it’s not comfortable to let the krona be this weak considering that inflation is still above the target and wage agreements in the labour market are open.”
Well, you had your chance at the loonie.
- Kevin Carmichael's Economy Lab: Sliver of hope that Canada's slump is temporary
- Economy Lab: How the U.S. is winning, and Japan losing, the 'currency war'
- 'Day of reckoning' looms for European auto makers, Marchionne warns
- Canadian firms expect better results, more hiring in 2013: BOC
- UPS drops $7-billion bid for TNT after EC veto
- Carolynne Wheeler's Economy Lab: Beijing's smog problem - an environmental cost of China's economic miracle
- Japan to probe Dreamliner fuel leaks