These are stories Report on Business is following Tuesday, July 29, 2014.
Watching an episode of the final season of The West Wing last night, I was reminded of BlackBerry Ltd.’s former glory.
Josh Lyman, the right-hand man to President-elect Matt Santos on the popular TV series that ran until mid-2006, is shrieking that he can’t find his BlackBerry, and he names the once-iconic smartphone several times.
Today, the company’s feisty chief executive officer, John Chen, doesn’t know whether it can regain that status, though he’s pleased with his turnaround efforts.
“I am comfortable with where the company is today, how we managed our technology, our businesses, the margins, the distribution channel or the new products that are coming out,” Mr. Chen told Bloomberg Television yesterday.
“Whether it’s going to be good enough to be iconic again, okay that’s something I need to chew on. I don’t know the answer to that question.”
Separately today, BlackBerry announced it was buying Secusmart, GmbH, a German firm with anti-eavesdropping tools used by German Chancellor Angela Merkel, among others.
“We are always improving our security solutions to keep up with the growing complexity of enterprise mobility, with devices being used for more critical tasks and to store more critical information, and security attacks becoming more sophisticated,” Mr. Chen said in unveiling the deal.
“The acquisition of Secusmart underscores our focus on addressing growing security costs and threats ranging from individual privacy to national security.”
BlackBerry, of course, was once the king of its industry.
It has since slumped badly since the days when it was Research In Motion Ltd., and Mr. Chen is just the latest executive to try to right the ship.
The company has cut back dramatically and shifted direction.
Mr. Chen also told Bloomberg’s Emily Chan that he has no offers for deals.
“If people would like to talk, I mean talk is not an offer,” he said.
(I have two West Wing episodes left in my binge-watching, by the way, so no spoilers, please.)
Talisman swings to loss
Shares of Talisman Energy Inc. dipped today after the Canadian energy company’s latest quarterly report.
Talisman, which has been approached by Repsol about a deal, slumped to a second-quarter loss of $237-million (U.S.), or 23 cents a share, from a profit of $97-million or 9 cents a year earlier.
Total production climbed 4 per cent, and the company said it’s on track to meet this year’s targets.
“During the past two years we have focused our efforts and capital on a strong portfolio of long life assets in our Americas and Asia-Pacific core regions,” chief executive officer Hal Kvisle said in a statement.
“Our year-over-year performance demonstrates solid progress and underlines the strength of our core regions.”
Talisman shares were down by 0.7 per cent with just over an hour to go before the New York open.
- Talisman Energy reports second-quarter net loss
- Jeffrey Jones: Talisman CEO expected to shed light on Repsol talks
WestJet flies higher
WestJet Airlines Ltd. today posted what it called a “great second quarter,” with profit rising to $51.8-million, or 40 cents a share, from $44.7-million or 34 cents a year earlier.
WestJet, Reuters reports, benefited from higher ticket prices, though higher fuel expenses and the decline in the Canadian dollar were trouble spots.
Revenue per available seat mile increased 5 per cent.
The latest economic readings from Japan have economists wondering today whether Abenomics is “stuttering.”
According to today’s data, unemployment is now up to 3.7 per cent, from 3.5 per cent, while retail sales across the country rose in June by just 0.4 per cent, below what was expected.
And that, according to Bank of Nova Scotia, left second-quarter sales down by 7.1 per cent from the first three months of the year as an April sales tax increase took its toll.
“Abenomics is stuttering, as the consumption tax increase bites and real incomes are eroded by rising prices,” said Kit Juckes, the chief of foreign exchange at Société Générale.
Abenomics is the name given to the aggressive program launched by Prime Minister Shinzo Abe when he took over. There have been fits and starts, but the initiative had been deemed successful.
Now, economists such as Scotiabank’s Derek Holt and Dov Zigler whether this past spring will prove to have been the “high water mark” for the prime minister’s program, having seen first-quarter economic growth of 6.7 per cent and a strong May inflation reading, given the country’s battle with deflation.
“The main economic objectives of Abenomics, namely higher growth and higher inflation, were seemingly being realized,” they said in a research note today.
“Digging beneath the surface, however, the growth and the inflation were to some good extent attributable to the optical illusion of a sales tax hike,” they added.
“Higher [consumer price index] due to pass-through from currency depreciation had a similar effect on inflation. How growth and inflation will look once these transitory factors shake out is a whole other matter. We’re already seeing that the Japanese consumer has been sizably weakened by the sales tax hike.”
Shares of United Parcel Service Inc. sank today after the courier company cut its outlook for the year.
UPS shares were down almost 3 per cent with about 30 minutes to go before the New York open.
As it posted its second-quarter results, UPS cut its projection for earnings per share to a range of $4.90 (U.S.) to $5 for the year, down from an earlier forecast of $5.05 to $5.30.
At the same time, it said it would increase spending heading into the peak season in a program that will “provide financial benefits for years to come.”
UPS profit plunged almost 58 per cent in the second quarter to $454-million, or 49 cents a share diluted, from $1.1-billion or $1.13 a year earlier.
The latest quarter included a hefty one-time hit.
Revenue rose 5.6 per cent to $14.3-billion.
Streetwise (for subscribers)
ROB Insight (for subscribers)
- U.S. home prices fall short of expectations in May
- Microsoft raided, faces China anti-monopoly probe
- U.S. investigates UBS, Deutsche Bank speed trading
- Pfizer beats forecasts as cancer medicine sales grow