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These are stories Report on Business is following Thursday, June 28, 2012.

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RIM plunges
Research In Motion Ltd. shares plunged in after-hours trading today as it delayed the launch of its crucial BlackBerry 10 and announced it's in the midst of slashing thousands of jobs. The stock sank by about 15 per cent.

Chief executive officer Thorsten Heins pledged this evening to "work aggressively" to turn the organization around as he dropped that bombshell on investors.

"Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January," Mr. Heins said in a statement.

"I am not satisfied with these results and continue to work aggressively with all areas of the organization and the board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the company on areas that have the greatest opportunities. Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisers on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities."

RIM is under ever mounting pressure amid heated competition with the likes of Apple Inc. and Samsung.

True, its subscriber base grew, but its results were ugly. Here are the highlights from its first quarter:

  • Revenue fell almost 44 per cent from year-earlier levels to $2.8-billion (U.S.).
  • Loss of $518-million or 99 cents a share, operating loss of $643-million.
  • Adjusted loss of $192-million or 37 cents a share, excluding goodwill hit of $335-milllion.
  • Shipments of 7.8 million BlackBerry devices and 260,000 PlayBook tablets.
  • Delay of BlackBerry 10 because the integration of  key features "and the associated large volume of code into the platform has proven to be more time consuming than anticipated."
  • RIM is in the midst of a restructuring that will see 5,000 jobs gone.
  • BlackBerry App World now has 89,000 apps.
  • Cash climbed to $2.2-billion.

"RIM's development teams are relentlessly focussed on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready," said Mr. Heins. "I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience."

Petronas strikes deal for Progress
Malaysia's Petronas has struck a $5.5-billion deal for Progress Energy Resources Corp., and is bending over backwards to pledge a strong base in western Canada.

The two companies announced today that the Canadian subsidiary of the Malaysian oil and gas concern is offering $20.45 a share, a hefty premium to the closing price of Progress on the Toronto Stock Exchange Wednesday, The Globe and Mail's Carrie Tait reports.

The companies pledge to keep the head office in Calgary, with a liquid natural gas office in Vancouver.

"This development will generate substantial economic benefits for the provinces and local communities, as Petronas' access to capital will help to bring Canada's abundant and clean-burning natural gas resources to global markets, leveraging our well-established and extensive network of customers worldwide," said Datuk Anuar Ahmad, an executive vice-president at the Malaysian company.

As Streetwise columnist Boyd Erman notes, the deal is also a win for the Canada Pension Plan Investment Board, which bought into Progress two years ago for $350-million, or $12.60 a share.

Don't expect much from summit
There's much ado being made today about the EU leaders summit in Brussels, but observers expect nothing of substance.

There was a brief flurry of excitement when people believed Germany's finance minister was suggesting his government was prepared to bend on the idea of a common euro zone bond, but what he actually said was that that wouldn't happen until there is a common fiscal policy.

"We have to be sure that a common fiscal policy would be irreversible and well co-ordinated," Wolfgang Schäuble told The Wall Street Journal ."There will be no jointly guaranteed bonds without a common fiscal policy."

To me, that set the stage for the two-day meeting, which is aimed at easing the crisis in the euro zone, as it highlighted Germany's repeated opposition to new measures, such as a euro bond and banking union, and its demands for fiscal discipline throughout the 17-nation currency union. There appears to be no softening on Germany's part.

"If anything the German Chancellor appears to be tiring of being constantly blamed for the ills of the European continent and as such it would appear that positions are now starting to become entrenched," said senior analyst Michael Hewson of CMC Markets.

The other countries are pressing Germany and its chancellor, Angela Merkel, to bow, but she won't, and has said there are no easy fixes here.

"A sour mood has descended on financial markets this morning as investors await the beginning of the latest EU summit," said analyst Chris Beauchamp of IG Index in London, referring to the two-day gathering in Brussels, which is beginning today.

"Eighteen such previous summits have had no discernible effect on the crisis, being full of sound (and the occasional bit of fury) but ultimately signifying little. A pre-summit meeting between the two 'big beasts' of the euro zone, Germany and France, failed to produce anything of substance, and it will probably be the same story with this get-together. Yesterday's better U.S. data is now a distant memory; the markets' march higher was accompanied by a steady rise in Spanish and Italian yields, whose upward move has continued today."

One might be best to set aside the hints from Germany, at this point, at least, because there are no signs the euro zone is moving toward a resolution.

"Tensions are running high in the currency union, and even comments from Germany about being open to negotiation of euro bonds were not sufficient to lift sentiment," Rupert Osborne, a futures dealer and Mr. Beauchamp's colleague at IG Index, said of the market reaction.

"They might be willing to discuss the topic, but they still want tighter EU control of national budgets first; something they're not likely to get any time soon."

Competition chief steps down
Canada's competition commissioner is leaving her post two years ahead of schedule, The Globe and Mail's Steve Ladurantaye reports.

Melanie Aitken will step down in September, according to the Competition Bureau. She was appointed to a five-year term in 2009, and promptly made a name for herself as an aggressive watchdog who wasn't afraid to take on some of Canada's largest industries.

News Corp. to split
Rupert Murdoch's News Corp. confirmed today that it plans to split into two publicly traded companies, separating its media and entertainment operations.

"There is much work to be done, but our board and I believe that this new corporate structure we are pursuing would accelerate News Corp.'s businesses to grow to new heights, and enable each company and its divisions to recognize their full potential – and unlock even greater long-term shareholder value," Mr. Murdoch said in a statement.

One company would hold News Corp.'s media properties, including newspapers in Australia, Britain and the United States, among other assets. The other would hold its broadcast and cable operations, and its movie and TV production business.

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