These are stories Report on Business is following Friday, Oct. 28. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Next up, Italy? The market's attention is fast turning to Italy as the next weak link in the struggling euro zone.
Prime Minister Silvio Berlusconi is pushing for reforms, and has promised his counterparts in the 17-member monetary union that he will act quickly. And as The Globe and Mail's Boyd Erman reports today, Italys weakness is one of the reasons behind the push by euro leaders to fatten up their bailout fund. It's not just to take care of the likes of Greece, but to satisfy markets that they also have the resources to prop up bigger economies like Italy and Spain.
Indeed, Italy was first to the market since the euro crisis deal and, by some accounts, failed the test in an auction of 10-year bonds today, with a yield of 6.06 per cent or the highest since it joined the euro zone.
"A disappointing Italian auction overnight suggests two things," said Derek Holt and Karen Cordes Woods of Scotia Capital.
"One, that investors are not totally convinced that the details presented at the recent summit will completely prevent further market erosion. Two, that investors aren’t convinced that Italian Prime Minister Berlusconi's new plan to cut Italy’s debt - via raising the retirement age to 67 (starting in 2026), raising €5-billion annually through asset sales over the next three years and easing labour laws - will either be implemented or will succeed."
Given its debt payments, it's a huge issue for Italy, the monetary union's third-largest economy and most indebted member.
"Italy generates a government budget deficit as a result of its interest payments on debt that represents 120 per cent of GDP," said currency strategist Eric Theoret of Scotia Capital.
"Were it not for interest payments, Italy would run a (primary) budget surplus. The rising cost of debt is an ongoing concern for markets, who fear a buyer’s strike on the part of investors in the €1.6-trillion Italian debt market. All three major credit rating agencies have a negative outlook for Italian debt, currently rated at A by S&P and A2 by Moody’s."
- Italy at heart of crisis as borrowing costs climb
- Belatedly, Europe finds a quick fix to its financial woes
- €1-trillion worth of reasons to hope for European stability
- How the Europe rescue package is supposed to work
- Voluntary or forced? The important word games of debt default
- Boyd Erman's Streetwise: CDS market likes what it sees in Europe
Whirlpool slashes jobs Whirlpool Corp. is cutting 10 per cent of work force in North America and Europe, roughly 5,000 jobs, as global demand weakens and costs rise.
The appliance manufacturer today posted a gain in third-quarter profit to $177-million (U.S.) or $2.27 a share diluted, up from $79-million or $1.02 a year earlier. Revenue rose to $4.63-billion from $4.52-billion.
However, it slashed its forecast for the year for earnings per share to $4.75 to $5.25, well down from the previous projection of $7.25 to $8.25.
"During the quarter, we experienced weaker than expected global industry demand and elevated material costs," said chief executive officer Jeff Fettig.
"Consumers continue to show strong preference for our unmatched global brand portfolio and new product innovations, and we are beginning to see the benefits from previously announced price increases. However, our results were negatively impacted by recessionary demand levels in developed countries, a slowdown in emerging markets and high levels of inflation in material costs."
Samsung overtakes Apple Samsung Electronics is suddenly in the lead in the smart phone race, for now anyway, having made huge strides over the course of just one year.
Estimates show the South Korean manufacturer, which posted earnings today, overtaking Apple Inc. as the top seller in the world, with shipments surging more than 40 per cent annually in the third quarter.
Like others in the market, Samsung is using the Android system from Google Inc. While Samsung itself did not disclose actual numbers, market researcher Strategy Analytics said Samsung moved almost 28 million devices in the quarter, outpacing Apple's 17 million. Samsung now holds almost 24 per cent of the market, said analyst Neil Mawston.
"After just one quarter in the top spot, Apple slipped behind Samsung to second position and captured 15-per-cent share," he said. "Apple's global smart phone growth rate slowed to just 21 per cent annually in Q3 2011, its lowest level for two years."
One quarter can obviously make a difference in this fast-paced industry, and we've yet to see the results of Apple's iPhone 4S, though early signs are that it's a hit, or of the new BlackBerry models from Research In Motion Ltd. .
"We believe Apple's growth during the third quarter was affected by consumers and operators awaiting the launch of the new iPhone 4S in the fourth quarter, volatile economic conditions in several key countries, and tougher competition from Samsung's popular Galaxy S2 model," Mr. Mawston said in a report.
Both Apple and RIM disappointed with their latest earnings.
RIM now sits in fifth spot, with 10.1 per cent of the global market, based on third-quarter estimates, Mr. Mawston said. That's behind Samsung, Apple, Nokia and HTC.
"It slipped a long way in our rankings," Mr. Mawston added in an interview, noting the Canadian company held 20 per cent of the global market two years ago. "In the past couple of years, their market share has halved."
Samsung said in its earnings report that expects "seasonal demand" to speed up in the current quarter, while competition in the market heightens with new product launches.
Alex Spektor, also an analyst at Mr. Mawston's firm, said in the same report that Samsung's fast rise to the top was driven by "elegant hardware designs," the popularity of Android, "memorable sub-brands and widespread global distribution.
"Samsung has demonstrated that it is possible, at least in the short term, to differentiate and grow by using the Android ecosystem," he said.
- Samsung smart phone sales pass Apple's in Q3 as customers waited for 4S
- Derek DeCloet: Lay off RIM
- RIM helps India in legal BlackBerry surveillance
Palace coup While I don't think much of the idea of kings and queens, nonetheless a nod today to Commonwealth leaders for recognizing we're now in the 21st Century.
Princes and princesses will now be treated equally in terms of ascending to the throne under new succession rules agreed to by the group. That means a girl who is the first born can trump her kid brother.
“In future, the order of succession should be determined simply by the order of birth,” British Prime Minister David Cameron said as he announced the agreement at a summit in Perth, The Canadian Press reports.
“And we've agreed to introduce this for all descendents from (Charles) the Prince of Wales. Put simply, if the Duke and Duchess of Cambridge were to have a little girl, that girl would one day be our queen.”
So, first the palace, next the boardroom? Women account for just 14.2 per cent of directors in FTSE 100 companies, although that is an increase from 12.6 per cent two years ago. In Canada, according to Catalyst, women represent 14 per cent of directors at the 500 biggest public companies and Crown corporations. For publicly traded companies, it's just 10 per cent.
As The Globe and Mail's Janet McFarland reports, Senator Céline Hervieux-Payette has reintroduced a private member's bill that would force boards to be made up of at least 40 per cent women. That would come within six years of the legislation.
In a speech this week, she cited a study that suggested it will take 151 years to have equal representation on Canadian boards of directors.
"If you find that 151 years equals advancement on reaching parity, we need to review together the definition of advancement," she said.
- Commonwealth agrees to give men and women equal treatment in royal succession
- Senator to renew push for more women on boards
Do-not-call goes global Canadian and Australian telecommunications regulators have teamed up with several other watchdogs to make the do-not-call concept a co-ordinated global initiative.
The Canadian Radio-television and Telecommunications Commission and the Australian Communications and Media Authority said they today they brought together 12 watchdog groups for an "International Do Not Call Network."
Canada and Australia wil be the inaugural co-chairs of the group, and the Federal Trade Commission in the United States will host the secretariat, the CRTC said.
The group will meet once a year to share best practices and spur "robust" telemarketing rules around the globe.
“Enforcement agencies face a common challenge in tracking down individuals and companies who violate telemarketing rules, but operate outside national borders,” said CRTC chairman Konrad von Finckenstein, who will soon be leaving the agency (and may appreciate the do-not-call initiative if he spends more time at home).
"Having a network that fosters collaboration will contribute to more effective cross-border enforcement activities and help reduce unwanted telephone calls to Canadians from foreign telemarketers," he added in a statement.
In Economy Lab Is the "Occupy" movement the start of resurgent left-wing politics? Doubtful. But is it raising big questions? Yes, writes Martin Wolf of The Financial Times.
In International Business Doing business in China is about to get more difficult for foreign companies, Carolynne Wheeler reports from Beijing.
In Globe Careers Life's not a balance. It's a blend of seven elements: Faith, Family, Finances, Fitness, Friends, Fun and Future, according to entrepreneurs Paul Batz and Tim Schmidt in their new book.
From today's Report on Business