These are stories Report on Business is following Friday, Sept. 20, 2013.
BlackBerry sinks deeper
BlackBerry Ltd. shares plunged today after the smartphone maker projected a massive hit in its second quarter, saying it expects a loss of between $950-million (U.S.) and $995-million.
"We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability,” said chief executive officer Thorstein Heins.
“Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability."
Here are highlights of the company’s announcement:
- A loss of between $950-million, or $1.81 a share, and $995-million or $1.90.
- A charge on inventory of between $930-million and $960-million, largely on its Z10 devices.
- Adjusted loss of $250-million or 47 cents to $265-million or 51 cents.
- Revenue of $1.6-billion, half of it from its service operation, down from $2.9-billion a year earlier.
- Smartphone revenues of about $800-million, down from $1.7-billion.
- Sales of 5.9 million smartphones.
- Recognized hardware revenue on 3.7 million smartphones, primarily BlackBerry 7 units.
- Cash of $2.6-billion.
- Cuts of 4,500 jobs, or 40 per cent of its work force, by the end of the first quarter of its 2015 fiscal year.
- Cuts of operating spending by 50 per cent by the same date.
- “Increasing penetration” of its BlackBerry Enterprise Service 10, with more than 25,000 commercial and test servers already installed.
"Our enterprise business continues to reflect the trust that governments and businesses have placed in the BlackBerry platform," said Mr. Heins. "Security matters and enterprises know the gold standard in enterprise mobility is BlackBerry."
BlackBerry, which is in the midst of an auction for all or part of the company, reports results next week.
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Even used car salesmen get the blues
The leader of Canada’s Liberal Party has apologized to used car salesmen (and women), who have had it up to here after decades of being the go-to comparison for the world’s slime.
This all played out over the course of hours, via Twitter, after Justin Trudeau told reporters that politicians “are now ranked below used car salesmen.”
AutoDrive Canada, a dealership in the Toronto area, took the young politician to task, tweeting that it was disappointed, that it strives to uphold ethics and that the industry is a regulated one.
It also tweeted the link to a letter to Mr. Trudeau from the executive director of the Used Car Dealers Association of Ontario, who fired back that the Liberal leader was right: Politicians are ranked below used car salesmen.
“I don’t doubt your intent in making this comparison was to deride the tens of thousands of hard-working men and women … yes, Mr. Trudeau, thousands of women are involved in the sale of used vehicles … in the retail automotive industry in Canada,” wrote Warren Barnard.
He cited the fact that more than 4,700 dealers are part of his group, which promotes ethics and professionalism, and Ontario’s 2010 overhaul of regulations.
“Next time you choose to compare politicians with ‘used car salesmen,’ you now have some background with which to do so,” Mr. Barnard said.
“I might also suggest using the far more appropriate term ‘salespeople’ in the future, so as to be inclusive of everyone in our business,” he added.
“Yes, Mr. Trudeau, politicians do rank behind used car salespeople. Our members and their employees have known that for a long time.”
One could argue that used car salespeople have had it easier these past five years because they’re not bankers. Be that as it may, Mr. Trudeau apologized, tweeting: “Sorry, @AutoDriveCanada, poor choice of comparisons. I respect the hard you all do and thanks for doing it.”
Consumer prices in Canada continue to rise at an oh-so-slow pace.
The annual pace of inflation dipped in August to 1.1 per cent, largely on higher costs for rent and natural gas, from 1.3 per cent in July, Statistics Canada said today.
Prices at the gas pump rose 2.2 per cent, a far slower pace than July’s 6.1 per cent.
The so-called core rate of inflation, which strips out volatile items and helps guide the Bank of Canada, also dipped, to 1.3 per cent from 1.4 per cent.
On a month-over-month basis, core prices were flat in August compared to July, again a slower pace than the previous month.
India hikes rates
The new governor of India’s central bank boosted interest rates today in a fight against inflation, driving down the country’s stock market.
The Reserve Bank of India hiked its benchmark rate by one-quarter of a percentage point to 7.5 per cent.
“WPI inflation, which had eased in Q1 of 2013-14, has started rising again as the pass-through of fuel price increases has been compounded by the sharp depreciation of the rupee and rising international commodity prices,” the central bank said.
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