These are stories Report on Business is following Tuesday, Oct. 16, 2012.
A New York Times article today on the BlackBerry may well be more damning than the analyst reports on Research In Motion Ltd.
“The BlackBerry was once proudly carried by the high-powered and the elite, but those who still hold one today say the device has become a magnet for mockery and derision from those with iPhones and the latest Android phones,” the news organization reports, quoting one woman as saying, “I’m ashamed of it” and wanting “to take a bat to it.”
The report chronicles what many already know, how the BlackBerry once dominated the market but has since seen that share eroded amid competition from Apple Inc. and the Android system from Google Inc., among others.
RIM, of course, is preparing to launch its new BlackBerry 10 devices, which analysts are watching closely and are scheduled for early next year.
The New York Times looks at how several companies – from Yahoo Inc. to Goldman Sachs Group Inc. – are moving away from the BlackBerry.
Personally, I think it’s a bit much, but the Times says “BlackBerry outcasts” say they “suffer from shame and public humiliation” as those using other smartphones have a greater ability for social networking apps, as well as better photos and a better Internet experience.
RIM said in a statement that the report contained inaccuracies and lacked "balance," citing several things the BlackBerry can do, with social networking and otherwise, and noting that the number of BlackBerry users has climbed to 80 million.
"We listen closely to our users, happy and otherwise, and incorporate their feedback into everything we do – including the upcoming BlackBerry 10, which will be the first ground-up platform built for a new era of truly mobile computing," RIM said.
Toronto condo sales plunge
The latest numbers from the Toronto Real Estate Board are not encouraging, particularly where the city’s condo market is concerned.
According to new statistics released today, condo sales plunged 20.5 per cent in the third quarter of the year, to 4,541, from a year earlier.
New listings climbed more than 6.5 per cent, to 11,456, while average prices were flat at $334,204.
“With more listings to choose from and fewer sales, condo buyers have not been as aggressive with regard to offers, and sellers have had to price their units competitively,” Jason Mercer, the group’s senior manager of market analysis, said in the report.
“The result was little upward pressure on the average selling price compared to last year. Given the supply of listings currently in the market place, the average rate of price growth for condo apartments should continue to lag price growth for low-rise home types over the next year.”
The real estate board also reported over all home sales in the first half of the month, highlighting again how Toronto’s housing market is softening.
Sales in those 14 days fell by 10.5 per cent from a year earlier, to 2,961, while new listings rose 5.5 per cent, to 6,505.
Average prices, though, climbed by almost 6 per cent to $501,146.
“Some households have put their home purchase plans on hold in response to the higher cost of home ownership brought about by the recent changes to mortgage lending guidelines,” said the group’s president, Ann Hannah, referring to the latest restrictions unveiled by the government, which took effect in July.
“Both first-time buyers and existing home owners have been affected, given that sales were down across house types and geography,” said Toronto Real Estate Board (TREB) President Ann Hannah.
The Toronto report comes just a day after the Canadian Real Estate Association's over all look at the market in September. That, The Globe and Mail's Tara Perkins reports, showed home sales in Canada plunging by 15.1 per cent last month from a year earlier, though on a seasonally-adjusted basis gaining 2.5 per cent from August.
Amid the angst over the country's slumping housing market, economist Robert Kavic of BMO Nesbitt Burns takes an interesting look today at who's winning and who's losing
Not surprisingly, Vancouver and Toronto lead the pack of losers, in terms of sales, while Calgary is the runaway winner.
Mr. Kavcic tracked 23 markets, using three-month averages compared to a year earlier, rather than just comparing September 2012 to September 2011.
Of those 23, he found, 13 are experienced “balanced conditions,” though that may well change going forward.
“With sales generally falling relative to new listings, the number of buyers’ markets could be on the rise in the months ahead,” he said.
“Vancouver continues to show the weakest metrics,” Mr. Kavcic added. “Winnipeg, however, remains tight despite a recent drop in sales, while Calgary is on the verge of a return to sellers’ market territory.”
Using the three-month average, Mr. Kavcic found Vancouver sales down 27 per cent, and prices down 7.7 per cent, in a buyers’ market. Toronto sales were down 14 per cent and prices were up 6.1 per cent, in a balanced market.
In Calgary, prices climbed 19.1 per cent and prices 1.2 per cent in a balanced market, while Winnipeg saw a sales decline of 7 per cent and a price gain of 4.8 per cent in a sellers’ market.
For a look at other cities and Mr. Kavcic’s findings in general, see the accompanying graphic or click here.
Pandit leaves Citigroup
Vikram Pandit is quitting as the chief executive officer of Citigroup Inc., reportedly after clashing with the board, to be replaced by the bank’s CEO of its Europe, Middle East and Africa business, Michael Corbat.
“Thanks to the dedication and sacrifice of people across Citigroup, we have emerged from the financial crisis as a strong institution,” Mr. Pandit said today in a statement announcing the immediate departure.
“Citigroup is well-positioned for continued profitability and growth, having refocused the franchise on the basics of banking. Given the progress we have made in the last few years, I have concluded that now is the right time for someone else to take the helm at Citigroup.”
President and chief operating officer John Havens also resigned, Citigroup said.
Mr. Havens had been planning to retire at the end of the year, the bank said, but chose to leave now instead given Mr. Pandit’s departure.
Yesterday, Citigroup reported a plunge in third-quarter profit on a huge writedown, though it still beat analysts' estimates.
Mr. Pandit clashed with Citigroup's board of directors over strategy, several news organizations reported.
- Joanna Slater's Streetwise: Three things you need to know about Vikram Pandit's resignation
- Citigroup CEO Vikram Pandit resigns
Goldman swings to profit
Goldman Sachs Group Inc. hiked its dividend today as it rebounded to a third-quarter profit.
Goldman earned $1.5-billion (U.S.) or $2.85 a share, a turnaround from a loss of $428-million or 84 cents a year earlier. Revenue surged more than 130 per cent, to $8.4-billion, on investment banking gains.
Goldman boosted its quarterly dividend to 50 cents from 46 cents.
“This quarter’s performance was generally solid in the context of a still challenging economic
environment,” said chief executive officer Lloyd Blankfein.
“We continue to be disciplined in managing our operations and capital, while effectively serving our clients’ needs. The focus on these priorities will serve our shareholders and the firm well over the longer term.”
Loblaw cuts deep
Loblaw Cos. Ltd. is slashing 700 head office and administrative jobs, and expects a hit of $60-million in its fourth quarter on the cut backs.
“We’re managing costs where it makes sense by reducing administrative expense,” president Vicente Trius said in a statement as he announced the move by the big Canadian grocer.
“We will continue to invest in driving the business forward by devoting more resources to enhance the customer proposition.”
The cutbacks start today, and should be done over the course of the next three weeks.
CIBC cuts potash targets
CIBC World Markets has cut its price targets for three major potash producers, saying it is “tempering” its outlook for the industry.
Analyst Jacob Bout cut his target on Potash Corp. of Saskatchewan to $46 (U.S.) from $54, on Agrium Inc. to $121 from $125, and on The Mosaic Co. to $64 from $72.
Each company, of course, has its own issues, but the overriding theme is a dimmer outlook for potash prices as supply outstrips demand.
“We are tempering our outlook for the potash industry as we expect oncoming supply to act as an overhang on potash prices for the next two years,” Mr. Bout said in his report on Agrium.
Canadian industry has chalked up its best showing since March.
Manufacturing sales climbed 1.5 per cent in August, Statistics Canada said today, largely on the back of the energy and auto industries.
Sales in the oil and coal sectors rose 8.6 per cent, partly because some refineries bounced back after maintenance or retooling. Prices also rose.
Auto assembly plants also came on strong, with sales of 4.4 per cent after traditional July shutdowns. Still, the auto industry marked its 12 gain in 14 months, the agency said.
Eleven of the 21 sectors measured marked sales gains, accounting for more than 75 per cent of all industries.
Inventories dipped 0.1 per cent, the inventory to sales ratio declined to 1.32 from 1.34, and unfilled orders slipped by 0.7 per cent.
"The drop in the inventory to shipments ratio is good to see as that's positive for future production," said senior economist Krishen Rangasamy of National Bank Financial. "Still, we're not celebrating just yet given the downside risks in the form of a soft global economy. Orders remain soft and the strong Canadian dollar isn't helping exporters."
Spain closer to rescue
The Spanish government is reportedly moving closer to seeking the bailout markets expect.
An official from Spain’s finance department told reporters late yesterday that the government is studying the possibility of seeking a line of credit from the EU’s bailout fund, according to the Wall Street Journal and other publications today.
Spain is taking it slow, however, the Financial Times reported, to ensure its move doesn’t hurt other countries such as Italy.
Canada low in business fraud
Canada has again come out on top in an annual look at business fraud. On top, in this case, means Canadian businesses are doing well.
“Once again, this year’s survey paints a positive fraud picture for Canada compared to the rest of the world: the overall prevalence dropped much more quickly than elsewhere so that fewer than half of businesses were hit in the past year and, on average, Canadian firms lost just 0.6 per cent of revenues to fraudsters,” said the report from Kroll Advisory Solutions.
The report is the result of polling among almost 840 senior executives around the world in July and August.
“Canadian companies continue to enjoy the lowest levels of fraud compared to the other regions and countries,” said the study.
“While fewer than half of businesses were hit in the past year, three fraud types increased in frequency over the past year: theft of physical assets or stock, management conflict of interest and compliance breach. Moreover, Canadian respondents are among the most likely to report heightened risk exposure from increased collaboration between firms.”
- Rob Carrick on debt woes: Borrowing boom bolsters argument for interest rate hike
- Kevin Carmichael's Economy Lab: Why Mark Carney is finished with word games
- U.S. consumer prices rise 0.6% on surge in gasoline
- World faces 'dangerous' economic cocktail: OECD
- Coke profit meets forecasts, revenue misses
- Harry Winston cuts Diavik diamond mine production target
- J&J profit beats forecasts as drug sales rebound