These are stories Report on Business is following Thursday, Oct. 24, 2013.
Behind BBM's success
Here’s what my daughter Molly told our BBM family chat group today, having been out of the loop for months after swapping her BlackBerry for an iPhone: “Guess who’s back!”
And here’s what a colleague at a competing news service tweeted yesterday afternoon: “Someone PIN me: I’ve got one again via BBM for the iPhone.”
But former BlackBerry users returning to the fold are just part of the story behind this week’s successful rollout of the BBM chat app for iPhones and Android-powered devices.
As Tandy Thomas of Queen’s University put it, “there’s almost an element of forbidden fruit happening with it.”
The assistant professor of marketing at the Queen’s School of Business was referring to the fact that millions of smartphone users have been scrambling to download and use the free chat service, which until this week was available to BlackBerry users only.
“People have talked about how good it is for some time,” Ms. Thomas said today, although there are other cross-platform apps out there that boast far more users.
“There’s no secret that it’s a good product and users have raved about it for years and years,” she added. “Suddenly it’s open to everyone.”
More than 10 million people rushed for the app in the first 24 hours alone, since its Monday launch, and as-yet untold numbers more waited for their turn. BlackBerry already had some 60 million BBM users.
Ms. Thomas called the rollout a "beautiful launch,” though, like some others, she questioned where it takes the company down the road.
There’s no key revenue stream behind it, she said, adding it’s hard to see it as more than an “interesting marketing/PR move.”
As The Globe and Mail’s Sean Silcoff reports, it’s indeed not entirely clear how BlackBerry will make money off the widespread use of BBM, noting that others in the industry have leapfrogged the company where instant messaging is concerned.
Remember, too, as Mr. Silcoff, Jacquie McNish and Steve Ladurantaye reported last month, BlackBerry’s former co-CEO, Jim Balsillie, had tried to shift the focus to instant messaging last year.
- Complete coverage of BlackBerry
- Explainer: How does the wildly popular BBM differ from regular text messaging?
- ‘Incredible demand’ for BlackBerry’s BBM service
- Steven Chase and Iain Marlow: Former Apple CEO Sculley mulls BlackBerry bid
- Sean Silcoff: 'Incredible demand' for BlackBerry's BBM service
- Sean Silcoff, Iain Marlow and Tim Kiladze: BlackBerry faces dogfight as firm returns to its corporate roots
- Sean Silcoff and Jacquie McNish: BlackBerry co-founders weigh bid for company
- Boyd Erman in Streetwise (for subscribers) Lazaridis, Fairfax and BlackBerry: quick thoughts on an unlikely team
- BlackBerry in sale talks with Cisco, Google, SAP: sources
- Tara Perkins, Sean Silcoff and Jacquie McNish: Fairfax submits draft BlackBerry offer as spectre of rival bid looms
- Sean Silcoff, Jacquie McNish and Steve Ladurantaye: An exclusive report on the fall of BlackBerry
- How BlackBerry lost World War Z
Shares of Microsoft Corp. rose sharply in extended trading after the software giant posted a gain in third-quarter profit to $5.2-billion (U.S.) or 62 cents a share from $4.5-billion or 53 cents a year earlier Revenue jumped to $18.6-billion from $16-billion. The shares were up almost 6 per cent by about 5:30 p.m. ET.
Amazon.com Inc. shares also climbed after hours in the wake of better-than-expected third-quarter sales. The online retailer lost $41-million or 9 cents a share in the quarter, narrower than the $274-million or 60 cents it lost a year earlier. Sales climbed to $17.1-billion. Its stock was up 8 per cent by about 5:30 p.m. ET.
Twitter, meanwhile, unveiled the range of shares for its initial public offering, from $17 to $20, which would put a value on the micro-blogging service of about $11-billion.
- Microsoft beats expectations with 17-per-cent profit increase
- Amazon reports better-than-expected sales as online retailer expands aggressively
- Twitter reveals IPO pricing
We’re getting a peek today at how the breakup of the Russian potash cartel has hit the market.
“The most recent quarter can best be characterized as a predictable response to an unpredicted event,” chief executive officer Bill Doyle of Potash Corp. of Saskatchewan said as the potash giant posted a slump in third-quarter results.
“As we have seen in the past, fertilizer customers faced with uncertainty act with extreme caution,” Mr. Doyle said in a statement.
“This was the case during the third quarter, particularly in offshore potash markets, where significant purchases were delayed as Russian producer pronouncements left buyers waiting in anticipation of weaker prices.”
Potash Corp. profit fell in the quarter to $356-million (U.S.) or 41 cents a share from $645-million or 74 cents a year earlier, The Globe and Mail's Rachelle Younglai reports. It also cut its profit forecast for the year.
“While this volatility does not change the long-term underlying fundamentals of fertilizer demand, it did significantly slow market activity and our ability to deliver the results we expected,” Mr. Doyle said.
The “caution and competitive pressures” in the company’s major markets knocked down the average realized price of potash to $307 a tonne in the third quarter from $429 a tonne a year earlier, the company added.
Cenovus operating profit dips
Cenovus Energy Inc. saw its operating profit and cash flow drop in the third quarter on reduced refining results even as the company continued to expand oil production.
The Calgary-based energy giant posted operating profit of $313-million or 41 cents per share in the third quarter, down from $432-million or 57 cents in the year-earlier period, The Globe and Mail's Bertrand Marotte reports.
Cash flow decreased 17 per cent to $932-million from $1.1-billion in the same period in 2012, mainly due to a significant decline in refining operating cash flow, the company said today.
Net profit in the third quarter was $370-million or 49 cents per share, up from $289-million or 38 cents a year earlier, largely due to unrealized gains from hedging versus losses in the year-earlier period.
Meanwhile, oil production increased 40 per cent to $915-million in the third quarter, compared with the year-earlier period, boosted by higher oil prices and increased volumes.
Rogers profit slips
Rogers Communications Inc. saw third-quarter net profit slip today, as wireless revenue fell by 2 per cent.
The Toronto-based telecommunications, cable and media company said it added 64,000 wireless customers while reducing the rate at which they are leaving, known as churn, to 1.23 per cent. Total revenue rose by 2 per cent to $3.2-billion, The Globe and Mail's Eric Atkins reports.
Rogers posted net income of $464-million, compared with $466-million in the year-earlier quarter. Revenue rose in Rogers’ cable and media divisions.
Earnings flood in
You could get whiplash trying to follow today's flood of corporate earnings. Among the other reports:
Precision Drilling Corp. profit slipped to $29-million or 10 cents a share in the third quarter from $39-million or 14 cents a year earlier as revenue inched up to $488-million.
Ford Motor Co. profit dipped to $1.27-billion (U.S.) or 31 cents a share due to a special charge as revenue climbed 12 per cent to $36-billion. The auto maker also hiked its full-year outlook.
Teck Resources Ltd. third-quarter profit climbed to $267-million or 46 cents a share from $256-million or 44 cents a year earlier. Revenue inched up to $2.5-billion. Adjusted profit fell 41 per cent.
- Goldcorp profit plunges, Cerro Negro production delayed
- Bertrand Marotte: Precision Drilling profit slips, revenue steady
- Ford boosts outlook after profit beats estimates
- Teck’s adjusted profit slides 41% as coal prices fall
- Husky profit falls 3 per cent as crack spread narrow
- Domtar hurt by weak paper and pulp business
- Corus profit halves on tough radio competition
Loonie dips further
Expect the loonie to stay soft for the next while in the wake of the Bank of Canada’s decision to drop its signal for a rate hike yesterday.
The Canadian dollar sank quickly to 96.34 cents U.S. from 96.86 cents after the central bank shifted its language in yesterday’s policy statement. The loonie, as the country’s dollar coin is known, dipped further today.
As The Globe and Mail’s Barrie McKenna reports, the Bank of Canada had been signalling for some time that the next move in its benchmark overnight rate would be up, not down.
But in something of a surprise to the markets, it backed away from that yesterday as it painted a bleaker outlook, cutting its forecasts for economic growth, all in all making the loonie less attractive.
Economists now see a later timeline for the central bank’s first move on interest rates.
And the only things on the horizon are next week’s meeting of the Federal Reserve and Statistics Canada’s report next Thursday on how the economy performed during the month of August. Neither should rock the boat where the loonie’s concerned.
“Yesterday’s decision should induce CAD weakness in to year end,” said Stephen Gallo, Bank of Montreal’s European chief of foreign exchange strategy, referring to the loonie by its symbol.
- Barrie McKenna: Poloz paints gloomy picture, puts rate hike on hold
- Brian Milner in ROB Insight (for subscribers): Why the Bank of Canada ought to cut rates
Streetwise (for subscribers)
ROB Insight (for subscribers)
- Loblaw to compensate victims of deadly Bangladesh factory collapse
- Icahn pushes Apple on $150-billion buyback, boosts stake
- CRTC wants Canadians to hold 'flash conferences,' report back on state of TV
- Canada Bread to sell pasta business to Spain's Ebro
- Factory reports show euro zone growth sluggish, China picking up
- U.S. jobless claims fall less than expected
- Canadian Dollar / US Dollar FX Spot Rate0.7496-0.0030(-0.40%)
- Potash Corporation of Saskatchewan Inc$22.370.00(0.00%)
- Cenovus Energy Inc$20.700.00(0.00%)
- Rogers Communications Inc$53.870.00(0.00%)
- BlackBerry Ltd$7.350.00(0.00%)
- Microsoft Corp$61.000.00(0.00%)
- Amazon.com Inc$838.090.00(0.00%)
- Updated October 24 4:15 AM EDT. Delayed by at least 15 minutes.