These are stories Report on Business is following Thursday, Feb. 28, 2013.
Brin on smartphones
I don’t think I can actually answer the question posed by the headline on this column, but I’m hoping someone can.
Google Inc.’s Sergey Brin has the online world all buzz after reportedly saying on Wednesday that smartphones are “emasculating.”
The co-founder of the online search giant was speaking at the TED conference in Long Beach, California.
“Is this the way you’re meant to interact with other people?” Mr. Brin said, according to the TED Blog, CNET, Apple Insider and others.
“It’s kind of emasculating. You’re just rubbing this featureless piece of glass. Is this what you’re meant to do with your body?”
(Just for the record, my BlackBerry is a keyboard version.)
Mr. Brin described cellphones as a “nervous habit.”
“If I smoked, I’d probably smoke instead,” he said. “It’s look cooler. But I whip this out and look as if I have something important to do.”
While many are wondering today just what he meant, PC Magazine noted that he was displaying Google Glass spectacles-headset, and that the idea could be that these are supposed to be “supercharged engines of machismo” compared to the standard smartphone.
Cellphone tower rage
Canada’s wireless industry is taking a new tack to stem the rising tide of citizen complaints over new cellphone towers, The Globe and Mail's Rita Trichur reports.
The Canadian Wireless Telecommunications Association, the industry’s main lobby group, has partnered with the Federation of Canadian Municipalities on a new protocol for the placement of wireless antenna systems to create better co-operation between carriers and communities.
Jointly developed by the two groups, the protocol is designed to give communities better notice of carriers’ plans and more influence over the consultation process. A key change is that municipalities will have the power to ensure that all cellular towers and antenna systems are subject to a full public consultation prior to their construction, including those that are less than 15-metres in height.
Groupon Inc. today replaced chief executive officer Andrew Mason as its stock plunged, continuing a year-long decline.
The online deal company announced a new office of the Chief Executive, which will be filled, on an interim basis, by executive chairman Eric Lefkofsky and vice-chairman Ted Leonsis.
"As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history," Mr. Lefkofsky said.
The stock tumbled in the wake of the online deal company's disappointing fourth-quarter results late yesterday.
The young public company posted a 30-per-cent gain in revenue, but missed analysts’ estimates and came in with a fatter loss of $81.1-million (U.S.) or 12 cents a share.
"Record billings growth this quarter is a clear signal that customers love Groupons," Mr. Mason said in the earnings statement yesterday.
Investors? Not so much.
Groupon also forecast first-quarter revenue of between $560-million and $610-million, which would mean anything from flat to an increase of 9 per cent from a year earlier.
It also projected anywhere from a loss of $10-million to a profit of $10-million.
“This raises questions about how these guys are going to be able to scale the business,” said Macquarie analyst Tom White told Reuters. “The forecast is underwhelming.”
Banks get generous
Canada’s major banks are being somewhat generous as they kick off their fiscal year.
According to The Globe and Mail’s Grant Robertson, the banks that were expected to hike their dividends have done so, while another, Bank of Montreal, surprised investors with a payout boost.
Royal Bank of Canada today hiked its quarterly dividend 3 cents to 63 cents as its first-quarter profit climbed 12 per cent to top $2-billion, or $1.36 a share, up from $1.86-billion or $1.22. (Hmm, maybe it could have been more generous?)
Toronto-Dominion Bank also boosted its dividend, by 5 per cent, The Globe and Mail’s Tara Perkins reports. TD earned $1.79-billion in the first quarter, compared to $1.48-billion a year earlier. Excluding one-time items, TD earned $2 a share, compared to $1.86.
Canadian Imperial Bank of Commerce, meanwhile, posted a dip in profit to $798-million or $1.91 a share, The Globe and Mail’s Tim Kiladze reports. But excluding one-time losses, the bank earned $895-million, up from $833-million a year earlier.
Earlier this week, Bank of Montreal surprised markets with a 2-cent dividend increase.
- Canada's banks awash in profits
- RBC hikes payout as profit climbs 12% to more than $2-billion
- TD raises dividend 5 per cent as core consumer, business units buoy results
- CIBC profit dips on one-time charge, core results encouraging
- BMO results signal shift in banking balance
- Ottawa resists pressure from Europe over financial services
- EU cracks down on bankers' bonuses
- A 'desperate' U.K. beckons for bankers to follow Carney
Abe names new central bank chief
The new governor of the Bank of Japan has a tough road ahead, and now has to put his money where his mouth was.
Prime Minister Shinzo Abe today tapped Haruhiko Kuroda, the president of the Asian Development Bank, as the next central bank chief, part of his drive to get Japan’s economy back on its feet.
Two deputy governors were also named, creating a new team to fight the country’s ills.
The new governor was a frequent critic of the central bank and is expected to launch an aggressive campaign.
"Their confirmations are widely expected, and will mark a dovish turn for Japan’s central bank," said Derek Holt and Dov Zigler of Bank of Nova Scotia.
"But what will that mean in practice? The ‘tools’ that the BoJ retains in its monetary policy toolkit are: Extending bond purchases further out the curve, increasing the size of bond purchases, buying more risk assets (the BoJ already buys private-sector linked securities), and possibly buying foreign bonds (though that seems unlikely in the wake of the G7 statement condemning monetary policies that target exchange rate levels). "
- Brian Milner's Economy Lab: Bank of Japan - I can hear the money helicopters revving
- Japan taps Kuroda to lead central bank in battle for economic revival
U.S. economy struggles
The U.S. economy performed better than initially reported at the end of last year, but not as well as analysts had hoped for.
Originally, the U.S. Commerce Department estimated that gross domestic product contracted by 0.1 per cent in the fourth quarter of 2012. But, today, that was revised to slim growth of 0.1 per cent.
Economists had expected to see something better, possibly 0.3 per cent or even 0.5 per cent.
Today’s numbers illustrate how America’s economy continues to struggle to gain traction, amid government cuts and high unemployment.
"The upward revision to U.S. GDP may have been smaller than expected, but the details of the report provide reasons to be optimistic about Q1," said senior economist Krishen Rangasamy of National Bank Financial.
"For one, final sales held firm in Q4 despite the headwinds generated by Congress, nature (e.g storm Sandy and the drought) and a soft global economy."
As The Globe and Mail's Boyd Erman writes today, all the ingredients are in place for a big year in corporate deal-making.
Financing is cheap, companies are loaded with cash, and confidence is climbing as markets push ever higher.
Just two months into 2013, we've already seen huge deals involving Dell Inc. and H.J. Heinz Co.
Streetwise (for subscribers)
ROB Insight (for subscribers)
- The self-defeating legacy of austerity
- Why the Swiss have turned on their bankers
- Canadian GDP report on Friday: Are we hanging by a thread?
- It's time to put indexed public pensions to bed