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BlackBerry’s hopes for a turnaround on the back of the new BlackBerry 10 platform hit a sizeable speed bump on Friday when the Waterloo, Ont.-based smartphone maker revealed it lost money in the most recent quarter and forecast a loss for the current quarter, reports the Financial Post‘s Matt Hartley. As a result, shares of the smartphone maker plummeted on the Toronto Stock Exchange and on the Nasdaq. BlackBerry said it generated a net loss of US$84-million, or 16¢ per diluted share, after notching a US$94-million profit in the previous quarter. In the same quarter last year, BlackBerry posted a loss of US$510-million, or 97 cents per share diluted. Although BlackBerry reported Q1 revenue of US$3.1-billion, up 15% from the US$2.68-billion the company generated in the previous quarter, sales fell short of analyst expectations. Wall Street analysts had expected BlackBerry to report revenue of roughly US$3.4-billion, with earnings of about 8¢ per share, according to Bloomberg estimates. BlackBerry said it sold 6.8 million BlackBerry smartphones in the quarter, which also fell short of analyst estimates which anticipated sales of more than seven million units.
Related: Read our live coverage of BlackBerry’s Q1 conference call as it happened — Financial Post
Canada limps into second quarter
Canada’s economy got off to a weak start in the second quarter, with output in April relying heavily on wholesalers and retailers, and a slight rebound in the manufacturing sector. While gross domestic product grew for a fourth straight month, the 0.1% advance in April was its weakest performance this year but in line with economists’ expectations. Year over year, the economy gained 1.4% in April. Statistics Canada said Friday that April’s growth came mainly from service industries, which added 0.3% — driven by wholesale trade, up 0.6%, and retail trade, up 0.5%. The sector also saw a 0.6% increase in finance and insurance and a 0.5% gain in transportation and warehousing. The manufacturing sector, whose fortunes have waned recently, edged up 0.2% in April after a revised flat performance the previous month. Construction declined 0.4% after a revised flat March.
Second time’s a charm for BCE’s Astral bid
If at first you don’t succeed… Canada’s broadcast regulator has cleared the way for BCE Inc. to finally lay claim to Astral Media Inc.’s radio and television properties, but the approval comes with unprecedented conditions intended to keep the media behemoth from abusing its market power, writes the Financial Post‘s Christine Dobby. The Canadian Radio-television and Telecommunications Commission approved BCE’s friendly $3-billion takeover bid for Astral on Thursday largely in the form the companies had proposed in their second shot at winning regulatory sanction of the deal first announced in March 2012. But the increasingly consumer-oriented commission also imposed measures it said would address potential anti-competitive behaviour with a view to ensuring BCE plays nice in its negotiations with competitors and smaller players to whom it sells its media content. Among other restrictions, BCE must follow the terms of the CRTC’s code of conduct that relates to negotiations with broadcast distributors. It’s a code that all vertically integrated players — those who both own and distribute media — are expected to follow, but it will be included as a specific term of all the licences BCE acquires from Astral. The Montreal-based company, which owns CTV as well as the country’s biggest sports broadcaster TSN, will also be barred from unduly withholding the rights to non-linear content (such as online or mobile streaming rights) from competing distributors.
Related: Canada’s media giants quick to change tune at BCE-Astral hearings – Financial Post
A catalyst for opportunity
Catalyst Capital Group Inc. isn’t interested in buying Mobilicity, but the successful private equity firm is trying to parlay its senior debt position in the struggling wireless newcomer into a role with U.S. giant Verizon Communications Inc.’s plan to enter the Canadian market with an acquisition of rival Wind Mobile, reports the Financial Post‘s Christine Dobby and Theresa Tedesco. Sources told the Financial Post that Toronto-based Catalyst has been in discussions with Verizon Communications Inc. as the second-largest wireless provider in the U.S. prepares to enter the Canadian market. The discussions, described by an insider as “still in the introductory and early stages,” are in conjunction with Verizon’s talks with Wind Mobile’s owners to acquire the wireless startup for as much as $700-million. Catalyst is said to “be involved in the process for Wind,” although an outright bid by the private equity firm on its own is unlikely. Catalyst owns more than 30% of the senior secured credit of Wind’s rival Mobilicity.
Related: Rogers and Telus downgraded on Verizon threat – Financial Post
TD makes grab for Aeroplan
It was nearly 20 years ago that Canadian Imperial Bank of Commerce launched its Aeroplan credit card, the country’s first air flight rewards card, which quickly became a money spinner. Now Toronto-Dominion Bank is looking to grab that franchise, reports the Financial Post‘s John Greenwood. Canada’s second biggest bank and Amia Inc., owner of the Aeroplan loyalty program, on Thursday announced a deal under which TD would replace CIBC as the primary issuer of Aeroplan credit cards. The current agreement which expires at the end of the year gives CIBC the right of first refusal, or the ability to match any competing offers. But according to Amia and TD, that right expires August 9, so the clock is ticking. Brad Smith, an analyst at Stonecap Securities, argues that much hangs in the balance.
Related: CIBC stock expected to take hit as Aeroplan switches to TD Bank — Financial Post
‘The worst may be over’
Canada’s beleaguered exporters are seeing a glimmer of hope that “the worst may be over” for the global economy, gradually widening trade gates in the coming months, reports the Financial Post‘s Gordon Isfeld. Export Development Canada, the Ottawa-based credit agency, said its semi-annual survey shows less pessimism and more hope among companies that conditions are improving in Europe and the United States. “Exporters are telling us that they feel the worst may be over in Europe, that U.S. customers are ordering more, and that they are more optimistic that world markets will turn a corner in the next six months,” EDC chief economist Peter Hall said Thursday. EDC says that optimism is seen in its twice-yearly survey of companies, which pushed its trade index up 1.9 points to 72.6 from 70.7 in the fall reading.
Related: Bank of Canada’s Poloz urges ‘patience’ for restoring business confidence — Financial Post
Amazon Canada taps toy market
When it entered Canada to do battle with Indigo over books, Amazon.ca was decried as a threat to our country’s cultural heritage and smaller book retailers. But as the Internet giant now moves into toys — one of its stronger categories in the U.S., it stands to become a potent force in Canada’s slow-to-blossom online commerce business, reports the Financial Post‘s Hollie Shaw. “Customers in Canada showed us that they wanted and were looking for toys on Amazon.ca,” said Andrea Leigh, head of toys and games at Amazon.ca. The new Canadian toys and games division will offer one of the largest selections of toys in the country, Amazon said, including many it says are not available at retail stores. It features 300,000 toys for kids from infancy to teenage-hood, and incudes board games, action figures, dolls and doll houses and learning and education toys. It also carries large items such as outdoor swing sets. “We want Amazon.ca to be the destination where customers can discover and purchase toys of all kinds,” she said.
Related: Amazon plots big move into online grocery delivery business – Reuters
Natural gas for the long haul
It’s been a slower starter among consumers, but the long-haul trucking industry is finally giving natural gas a second, serious look, writes the Financial Post‘s Yadullah Hussain. Westport Innovations Inc. had been trying to convince manufacturers for years to give its natural gas engines a chance. Its luck finally changed last summer when it signed a deal with Caterpillar Inc. “It took one of the major original equipment manufacturers to capitulate, and ever since we have seen every OEM [original equipment manufacturer] manufacturer at our doorstep,” said Darren Seed, vice-president at Westport. The Vancouver-based company, which is in danger of burning through its cash within four quarters according to JPMorgan Co., has secured agreements with General Motors, Volvo and two other undisclosed manufacturers as the company and natural gas vehicles get a second look from the long-haul trucking industry.
Related: Renewables to produce quarter of world’s electricity by 2018: IEA – Financial Post
Apple’s new ads a flop
Self-indulgent. That’s how Apple Inc.’s newest TV commercials showing consumers enjoying its products while an actor reads the company’s corporate philosophy are being pegged – and consumers aren’t too impressed, reports Bloomberg News. The company’s latest ad, which began airing June 10, has earned the lowest score of 26 Apple TV ads in the past year, according to Ace Metrix Inc., a consulting firm that analyzes the effectiveness of TV ads through surveys of at least 500 TV viewers. The ad scored 489 on the company’s scoring system, below an industry average of 542 and far below past iconic Apple campaigns that often topped 700. The 60-second commercial, which shows kids in school with iPads as a voice declares the company’s product-design goals, underlines a strategic advertising shift at Cupertino, California-based Apple. The company is moving away from upbeat ads promoting product features toward ones that identify it as a reliable provider of products that combine quality, innovation and utility.
Related: Click here to view Apple’s “Our Signature” television ad
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