These are stories Report on Business is following Thursday, June 16. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
RIM shares sink Shares of Research In Motion Ltd. sank today in after-hours trading after the BlackBerry maker posted disappointing first-quarter results and slashed its outlook.
RIM earned $695-million (U.S.), or $1.33 a share, diluted, in the quarter, down from $769-million, or $1.38 a share a year earlier. Revenue climbed to $4.9-billion compared to a year earlier, but fell 12 per cent from the fourth quarter, The Globe and Mail's Iain Marlow reports.
"Fiscal 2012 has gotten off to a challenging start," said Jim Balsillie, co-CEO. "The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter. RIM's business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3-billion in cash. We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012."
RIM slashed its revenue outlook for the second quarter, saying it expects revenue of only between $4.2-billion and $4.8-billion. It projected earnings per share of between 75 cents and $1.05 for the second quarter, and between $5.25 and $6 for the year. It also plans to cut an unspecified number of jobs.
- RIM misses revenue target
- The Apple effect: Calls grow for a shakeup at RIM
- After RIM warning, all eyes on new product outlook
- RIM to roll out PlayBook internationally over next month
- Apple sets sights on cloud control
- Investors to RIM: Tell us a story
- Vox: RIM needs a software boost, not a share buyback
Greece rattles markets Political and economic turmoil mounted in Europe today amid growing fears Athens will be forced to default on its debt and raising new questions about the future of the euro monetary union.
In Athens, two of Prime Minister George Papandreou's key deputies quit, and government borrowing costs spiked again in several countries caught up in Europe's debt crisis.
Greece also has been the scene of ongoing demonstrations against austerity measures, which have not yet been approved in Parliament and which are tied to conditions of the bailout by the European Union, European Central Bank and International Monetary Fund.
As CMC Markets analyst Michael Hewson put it today, markets are fixed "on the policy paralysis in the euro zone as politicians fiddle for a solution while Greece burns under the glare of austerity and protest."
Borrowing costs in the periphery countries of the euro zone are stunningly high, and markets fear the the potential fallout throughout the 17-member monetary union in the event of a default. Euro policy makers have been unable to find a solution, particularly given a standoff between politicians and the ECB, which is opposed to any type of debt restructuring.
"Greek government bond yields shot up further on Thursday, keeping the euro on the back foot and tempering investors' appetite for risk more generally," said Jonathan Loynes of Capital Economics.
"While an additional bailout package may stave off near-term disaster, a major debt restructuring seems inevitable at some point and Greece's future in the currency union is looking ever more doubtful."
The latest escalation of the crisis appears to reflect two main sources of concern. First, the social unrest in Greece and the Government's waning political power have cast doubts over whether Greece will be willing and able to implement the austerity measures demanded by the EC and the IMF in return for their continued support.
Policy makers rushed to reassure investors. Olli Rehn, the EU's point man on economics, said the EU and the IMF would allow Greece to tap the next tranche of its bailout money next month.
French President Nicolas Sarkozy urged unity today, warning that "we have to leave the national fights behind us to find our sense of common destiny again." And there are dire warnings from observers across the globe.
Mr. Loynes said it appears likely Greece will get the next €12-billion tranche of its first bailout, and it appears there's no "imminent danger" of Athens running out of funds. But there are mounting questions over the future of the euro zone.
"More broadly, once again it looks like it will take the prospect of imminent disaster in a member state to force the euro zone's policy makers into decisive action," he said.
"But with each policy response apparently having a smaller effect - and the period between each crisis shortening - there are clear doubts over whether the single currency union can ultimately hold together in its present form."
- Acropolis Now: Fears over Greek default rattle investors
- Greek PM vows to stay, lead exit from debt crisis
- Greece lawmakers quit in austerity uproar
- Ireland revives pledge to go after bondholders
- Eric Reguly: In the EU, armoured cars drive over the taxpayers
- The roots of the Greek tragedy: bloated bureaucracy and tax evasion
Air Canada, union strike deal Air Canada today has reached a tentative agreement with the union representing striking customer service agents and call centre agents, agreeing to send a contentious issue over pensions to arbitration.
With Ottawa debating back-to-work legislation, the Canadian Auto Workers union and the airline confirmed the tentative pact today, The Globe and Mail's Brent Jang and Bill Curry report.
The Montreal-based carrier is seeking to place new hires on defined-contribution pension plans, which don't provide a guaranteed level of payout upon retirement. The proposal for new hires will go to binding arbitration, said a source familiar with negotiations.
Inflation, interest rates in spotlight Inflation in Europe dipped in May, but remains uncomfortably high for the European Central Bank, which has already signalled it plans to hike interest rates next month.
Throughout the EU, consumer prices climbed 3.2 per cent in May from a year earlier, a pace down only a smidgeon from the 3.3-per-cent annual pace in April. In the euro zone alone, the annual inflation rate dipped to 2.7 per cent from 2.8 per cent.
Costs in the euro zone were driven primarily by transportation, housing, and alcohol and tobacco. (No surprise on the last category. If you've got troubles like they do, you drink and smoke.)
India's central bank, which is battling far higher rates of inflation, boosted its key lending rate today for the 10th time in about a year, by a quarter of a percentage point to 7.5 per cent.
Emerging market researchers at RBC Dominion Securities said they expect further hikes in India later this year and early next.
Jobless claims dip New claims for jobless benefits among America's unemployed are heading in the right direction - down - but remain above the key 400,000 mark.
America is in the midst of a jobs crisis, and doesn't appear to be getting much better.
Initial claims fell last week to 414,000, while a four-week moving average showed them stuck at more than 424,500.
"No special factors were involved, and the trend is improving ... which is reassuring," said senior economist Jennifer Lee of BMO Nesbitt Burns. "However, corporations (large and small) are not going to hire in droves until they are certain that the economic recovery is on terra firma."
Housing starts climb There is, however, a bit of better news on the U.S. housing front, the place where the meltdown began.
Housing starts in the United States climbed 3.5 per cent in May to an annual rate of 560,000, and building permits increased by 8.7 per cent, to an annual pace of 612,000.
"Starts rose sharply in the west, with the rest of the country showing a mixed pattern," said Peter Buchanan of CIBC World Markets. "Notwithstanding May's increase, the longer term trend still just shows the sector bumping along the bottom. One positive note in the report was the stronger than expected showing by permits."
Bombardier loses out Reports today question the future of a Bombardier Inc. train plant in Britain after it lost out on a huge order.
Britain's rail minister named a group led by Siemens as the preferred bidder for the Thameslink project, which The Financial Times estimated is worth more than £3-billion. Bombardier was the other bidder in the running.
It's one of Britain's biggest train orders ever, the newspaper said, and today's decision will probably raise questions about the long-term future of the plant.
In Personal Finance today Change-of-use rules can trigger a taxable capital gain - but there are ways to sidestep or minimize that.
Lauren Templeton, the great-niece of the legendary investor Sir John Templeton, started investing at age seven.
Exchange-traded funds are taking off but advisers selling them are still few and far between.
In International Business today As the world's top investment bankers flock to Russia's second capital this weekend for the St. Petersburg economic forum, attention will once again focus on Dmitry Medvedev's efforts to transform Moscow into an international financial centre. Catherine Belton of The Financial Times reports.
From today's Report on Business
|AC.B-T Air Canada||7.68||
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|BBD.B-T Bombardier Inc.||4.50||
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