These are stories Report on Business is following today. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Is RIM planning slider keyboard? The technology world is abuzz this morning over speculation that Research in Motion Ltd. is poised to unveil a new touch-screen BlackBerry with a slide-out keyboard. The talk was kicked off late yesterday when RIM invited reporters to an event in New York next Tuesday. AT&T Inc. appears to also be involved. RIM, battling the iPhone from Apple Inc. and other new smart phones, said in June that it planned to unveil two new mobile devices soon, though it did not elaborate. "I would suspect this would be the new BlackBerry 9800, a touch-screen slider phone," Tavis McCourt, an analyst with Morgan Keegan & Co., told Bloomberg News. "It was well known it was with AT&T and they'd said they'd have two devices later in their fiscal second quarter."
ArcelorMittal eyes higher steel prices The world's biggest steel producer plans to boost prices by some 10 per cent this year, a move that would ripple through manufacturing. Though it expects steel demand to weaken globally, "we need a 10-per-cent price increase for spot business in order to replicate our profit level in the second quarter," chief executive Lakshmi Mittal said as the company released its earnings, according to The Wall Street Journal. ArcelorMittal has already rengotiated some auto contracts with higher costs, he said. The company posted a profit of $1.7-billion (U.S.) in the second quarter, a turnaround from a loss of $792-million a year earlier.
IMF lauds China but soft on currency The International Monetary Fund today issued a fairly glowing report on China but may face some criticism for soft-pedalling its comments on the country's currency. The review praised Beijing for acting quickly during the financial crisis with effective measures, such as higher public spending and lower taxes, that "helped mitigate the impact on the economy and ensured that China has led the global recovery."
Economic growth in China began to gather steam in the second quarter of 2009, averaging 9.1 per cent for the year. It projects 10.5-per-cent growth this year.
On the issue of the yuan, also known as the renminbi, the IMF report was soft, saying some of its executive directors welcomed Beijing's reform while several believed the currency remains undervalued and the exchange rate based on uncertain forecasts for China's current account surprlus. "Many directors stressed that, over time, a stronger renminbi would help facilitate a shift from exports and investment to private consumption as the principal driver of economic growth," the report said. "A number of directors pointed to signs that a structural shift in the balance of payments is already under way, reflecting the reforms already put in place to strengthen consumption."
China announced in mid-June, before the G20 summit in Toronto, that it would allow the yuan to appreciate. Since then, the currency has gained less than 1 per cent against the U.S. dollar.
"This is very much a politically-driven softening of tone as the IMF seeks not to antagonize China on the exchange rate issue," said Scotia Capital currency strategist Sacha Tihanyi. "The IMF's multi-method exchange rate valuation approach always includes 'uncertain current account forecasts,' regardless of the country involved. Still, this is probably the best way to proceed from the IMF's point of view. This will keep some degree of pressure on Chinese authorities, while refraining from aggressively (and counter-productively) haranguing the country on its policies."
Only in Canada? Economists believe neither the Federal Reserve nor the European Central Bank will move to pull back from emergency measures and raise interest rates anytime soon, unlike the Bank of Canada, which has now hiked its benchmark rate twice. In London today, Bank of England Governor Mervyn King told a hearing it will also be some time before rates return to normal in Britain. "I look forward to that time because it will probably be a signal that there is a smoother drive ahead, with the economic outlook improving in a durable way," he said. "But I fear there is some considerable distance to travel before we can begin to use the word 'normal.'"
Bank of Canada Governor Mark Carney is the only central banker in the G7 to have raised rates, though they remain exceptionally low. More rate hikes are expected.
CP Rail profit jumps Canadian Pacific Railway Ltd. said today it expects its markets to remain volatile. The railway posted a second-quarter profit of $166.6-million or 98 cents a share, up 30 per cent from $135.5-million or 80 cents a year earlier. Revenues jumped 20 per cent to $1.23-billion. "Markets are likely to remain volatile," said chief executive officer Fred Green. "Our proven track record of quickly adjusting our resources to meet changing volume demands position us well for the second half."
Last week, its competitor, Canadian National Railway Co. posted a 38-per-cent jump in profit and boosted its outlook for the full year.
Husky to refocus amid drop in profit Husky Energy Inc. is "rebalancing" its portfolio to shift more money to projects with lower costs and higher returns, the company said today as it posted a hefty fall in second-quarter profit and cut its production forecast for the year. Husky's profit fell to $266-million or 31 cents a share from $430-million or 51 cents a year earlier. Revenue jumped to $4.57-billion from $3.92-billion.
"Husky's business strategies have historically delivered strong results for shareholders and the company has a tremendous portfolio of assets to fuel mid to long-term growth and continue delivering shareholder value," said chief executive officer Asim Ghosh. "However, a key goal is delivering near-term production growth. We are rebalancing Husky's portfolio to direct a measure of capital to low cost, high return projects to achieve this near-term goal while maintaining the integrity of our long-term objectives."
Enbridge beats estimates Enbridge Inc. today topped analysts' estimates for second-quarter results even as it struggled to deal with the aftermath of an oil spill in the Kalamazoo River in Michigan. More than 3 million litres leaked in the river since Monday, stretching some 26 kilometres, state officials say.
"While we're very proud of our second-quarter financial performance, unfortunately, we are reporting those results at the same time as members of our team are in Michigan doing their utmost to respond to the leak we experienced on the Lakehead System earlier this week," said chief executive officer Patrick Daniel. "Isolation valves on the line have been closed, stopping the source of the leak, and we are now focusing all of our efforts on recovery and clean up."
Enbridge profit slipped to $138-million or 37 cents a share from $393-million or $1.08 a year earlier, while adjusted earnings rose 19 per cent to $232-million or 63 cents.
Enbridge also announced that one of its U.S. subsidiaries is poised to acquire a natural gas gathering and processing system in Texas and Oklahoma for $682-million (U.S.).
"The flurry of recent project announcements from [Enbridge]have gone a long way to answering any lingering questions on its post-2010 growth outlook," said UBS Securities Canada analyst Chad Friess. "We now forecast 9-per-cent annual [earnings per share]growth from 2009 to 2012, in line with [Enbridge's]10 per cent plus target."
TMX posts higher profit Derivatives trading in Montreal is boosting the fortunes of TMX Group Inc. , although it fell just shy of analysts' estimates in reporting second-quarter results today. The operator of the Toronto Stock Exchange said profit rose 1.5 per cent to $47.6-million or 64 cents a share from $46.9-million or 63 cents a year earlier. Revenue climbed more than 3 per cent to $142.7-million. Chief executive officer Thomas Kloet said the company was encouraged by a "surge in activity on Montreal Exchange, as volumes increased 32 per cent and open interest was up 26 per cent in the first six months over last year."
As well, he noted, "initial public offerings continued to be strong on both of our equity exchanges. Our international expansion efforts have resulted in a record 25 new international issuers listing on our equity markets in the first half of the year."
From today's Report on Business
- European banks get boost as fears over stress tests ease
- Business concerned over census changes
- BP plans assets sale of up to $30-billion
- Selling the high life in hard times
- AT&T Inc$41.14-0.14(-0.34%)
- Apple Inc$112.88+0.17(+0.15%)
- Canadian Pacific Railway Ltd$193.58+0.62(+0.32%)
- Canadian National Railway Co$84.23-0.23(-0.27%)
- Husky Energy Inc$15.41-0.12(-0.77%)
- Enbridge Inc$57.12-0.43(-0.75%)
- TMX Group Ltd$60.28+0.26(+0.43%)
- Updated September 26 4:00 PM EDT. Delayed by at least 15 minutes.