These are stories Report on Business is following Friday, Feb. 1, 2013.
RIM up in pre-market
After the rout of the past five days, it’s worth asking whether investors should take a chance on Research In Motion Ltd.
Just to be clear, I’m not saying anyone should. I don't give stock advice. I’m just raising the question amid suggestions from some analysts that the current weakness may be an opportunity. Because at some point soon, RIM’s new BlackBerry 10 offerings are going to hit the U.S. market, the apparent source of the current unease.
As The Globe and Mail’s Iain Marlow reports, analysts suggest caution amid the later-than-expected launch in the United States, where RIM hopes to make huge strides with its Z10 touchscreen model and, later, the keyboard-equipped Q10.
Last week, RIM shares were above $18 on the Toronto Stock Exchange. By yesterday’s close, they were at $12.92, having tumbled fast, notably after Wednesday’s launch of BB10 and even in the face of some glowing reviews for the new models.
Today, it closed up by less than 1 per cent, having pulled back from higher, earlier gains.
The new BlackBerrys went on sale yesterday in Britain, and they’ll be in Canada beginning next Tuesday. But they won’t be in the United States until March.
Some analysts, such as Peter Misek of Jefferies and Co., have recommended buying RIM shares earlier rather than later, because while BB10 sales projections are now lower for the current quarter, they could well be higher for the next. Mr. Misek today reaffirmed his share price target of $19.50 (U.S.) and his “buy” recommendation.
He’s not alone, though not all analysts feel the same way, some urging caution.
Mr. Misek says the March launch in the United States shouldn’t surprise anything, even though it did, and that the “upside is underappreciated” for the next two quarters.
He also thinks that the market is “too pessimistic” where the next quarter’s concerned given the “high carrier support” for BB10.
He also has higher hopes for RIM’s BlackBerry Mobile Fusion, and the possibility of licensing the new operating system.
- RIM shares sink another 6.8 per cent, analysts cautious on U.S. delays
- U.S. delay hampers RIM’s BB10 rollout
U.S. jobs picture brightens
The U.S. recovery is “humming along,” as one economist put it after today’s key jobs report.
The U.S. economy created a modest 157,000 jobs in January, according to the Labor Department, while the unemployment rate inched up to 7.9 per cent.
But, notably, numbers for other months were revised, showing more jobs than originally believed.
In fact, job creation last year averaged more than 180,000 a month, compared to some 150,000 in the earlier readings, 2.2 million jobs over all compared to the 1.8 million initially reported.
Employment is now 2.5 per cent below the peak prior to the financial crisis.
November and December showed much better revisions than the original reports, with December coming in at almost 200,000 jobs.
“After revisions, payrolls growth averaging +203,000 over the past three months, which seems pretty darn healthy,” U.S. economist Justin Wolfers said via Twitter. “This recovery is humming along.”
- U.S. adds 157,000 jobs, unemployment ticks up to 7.9%
- U.S. manufacturing surges, Chinese recovery more modest
Barrick eyes unit sale
Barrick Gold Corp. is considering the sale of its energy unit as the world’s largest gold miner continues a radical revamp of capital spending and corporate strategy to deal with massive cost over-runs at a flagship project in the southern Andes, The Globe and Mail's Pav Jordan reports.
“Barrick is currently evaluating opportunities to optimize the company's global portfolio as part of a disciplined capital allocation framework introduced in 2012,” said spokesman Andy Lloyd.
Toronto-based Barrick has been on a mission to turn realign its fortunes since last June.
Domtar profit sinks
Domtar Corp.’s fourth-quarter profit fell sharply on weak pulp and paper prices and higher energy and fibre costs, The Globe and Mail's Bertrand Marotte reports.
The Montreal-based forestry products company earned $19-million or 54 cents per share for the three months ended Dec. 31, 2012, down from $61-million or $1.63 a year earlier.
Fourth-quarter sales came in at $1.32-billion, down from $1.36-billion.
“The down cycle in pulp prices contributed to the majority of the decline in Domtar’s earnings," said chief executive officer John Williams.
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