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BlackBerry Logs Quarterly Profit, 2013 Loss

March 28, 2013 by Leave a Comment

The financial report provided a mix of positive and worrying news, leaving some analysts without a clear picture of the once powerful, but now struggling, company’s long-term future.

“It is encouraging that they’ve stabilized the company and they’re not bleeding to death,” said Edward Snyder, an analyst with Charter Equity Research. “But they still have a long ways to go.”

The annual loss, which was reduced from an operating loss of $1.2 billion because of tax benefits, compared with net earnings of $1.16 billion a year earlier.

In the latest quarter, the fourth of the 2013 fiscal year, which ended March 2, the company lost $18 million from operations. But the recovery of income taxes transformed that into a profit of $98 million, or 19 cents a share.

BlackBerry has struggled with declining sales, and that trend continued. Revenue in the latest quarter was $2.67 billion, compared with $2.72 billion in the same period a year ago. Annual revenue fell to $11 billion, from $18.4 billion a year earlier.

For about one month of the quarter, the first of the company’s new phones, the BlackBerry Z10, was on sale in Canada, Britain and some other markets, but not the United States. BlackBerry said that it shipped about a million of the handsets during that time, which was in line with several analysts’ estimates.

“It has not been easy, but the BlackBerry team is delivering,” Thorsten Heins, the chief executive, told analysts in a conference call.

In contrast with many new handsets from other companies, however, the BlackBerry Z10 has been far from a sellout.

Mr. Heins said that since its introduction, only about two-thirds to three-quarters of the touch-screen-based Z10s that were shipped were ultimately sold at retail.

Shaw Wu, an analyst with Sterne Agee, said the sales data suggested that “The BlackBerry Z10 is not firing on all cylinders.”

He said the slower sales may have been a result of current BlackBerry owners awaiting the release in April of the Q10, another high-end phone with a touch screen and a physical keyboard — the keyboard long being a hallmark of the brand.

Mr. Heins said that another new phone using the BlackBerry 10 operating system, with a lower price than the Z10 and Q10, would be released this year. For ATT subscribers in the United States, the Z10 costs $200 with a two-year contract or $550 without a contract.

BlackBerry reported having 76 million subscribers worldwide at the end of the period, a loss of about three million. Until the third quarter of the fiscal year, BlackBerry had consistently gained subscribers.

In an unanticipated move, the company also announced that Mike Lazaridis, one of its co-founders, would retire and cut all formal ties to BlackBerry in May.

In an interview, Mr. Lazaridis said that the company’s directors initially opposed his proposal in January 2012 that he and Jim Balsillie step down as co-chairmen and co-chief executives in favor of Mr. Heins as the top executive. The two men were widely criticized at the time for not responding more rapidly to competition from Apple’s iPhone and phones using Google’s Android operating system.

Mr. Lazaridis said he agreed to remain vice chairman until the introduction of BlackBerry 10. Mr. Lazaridis said that in the last year, he guided BlackBerry on the product introduction, and helped Mr. Heins with longer-term plans.

“Having fulfilled the commitment I made, it’s time to move onto my next adventure,” Mr. Lazaridis said. Last week, he announced plans to start an investment fund focused on companies working on computers based on principles from quantum physics.

Mr. Heins said that he expected BlackBerry, formerly Research in Motion, to break even in the current quarter despite doubling its spending on marketing to promote the Z10.

ATT became the first American carrier to offer the new phone last week. But visits to several wireless stores on Wednesday found striking differences in sales support for the product that BlackBerry, which is based in Waterloo, Ontario, hopes will revive its diminished fortunes.

At several locations, including an ATT store on Fifth Avenue in New York and another near Union Square in San Francisco, the Z10 was lumped in with other phones, some two years old, while signs and promotional material were absent. But at an ATT store in New York’s busy Union Square, the Z10 was heavily promoted. A salesman who identified himself as a BlackBerry specialist gave a thorough demonstration of the device, including its ability to switch between corporate and personal apps.

The unevenness of presentation was also apparent at T-Mobile USA stores, which this week began selling the Z10, as well as the Apple iPhone 5 and Samsung Galaxy S 4, for $100 down and 24 monthly payments of $20. Verizon Wireless, which has a long association with BlackBerry, began selling the Z10 on Thursday and prominently featured the device on its home page.

Brian X. Chen contributed reporting from New York and Quentin Hardy from San Francisco.

Article source: http://www.nytimes.com/2013/03/29/technology/a-profit-though-slim-for-blackberry.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

DealBook: Diageo Buys Control of India’s Biggest Liquor Company

November 10, 2012 by Leave a Comment

The Indian businessman Vijay Mallya is the largest shareholder in the company, United Spirits.Carl De Souza/Agence France-Presse — Getty ImagesThe Indian businessman Vijay Mallya is the largest shareholder in the company, United Spirits.

NEW DELHI – Diageo, the world’s largest spirits maker, said Friday that it would buy a controlling stake in India’s biggest liquor company for $2 billion, a move that gives it a bigger foothold in this fast-growing market.

Acquiring the Indian company, United Spirits, will make it possible for  Diageo, which is based in London, to meet its goal of getting half of its revenue from emerging markets years ahead of its 2015 target. About 40 percent of sales come from such markets now. United Spirits, which is based in Bangalore, had revenue of 182 billion rupees  ($3.3 billion) in the 12 months ending in March, which is about 20 percent of Diageo’s sales for the 12 months that ended in June.

Analysts said the deal would give Diageo access to the most extensive liquor operation in India at a time when its citizens are increasingly consuming more alcohol. Many consumers are also choosing higher-priced spirits rather than beer and traditional Indian alcohol made from coconuts and sugar cane. Diageo’s Johnnie Walker whiskey has long been one of the preferred brands of middle-class and wealthy Indians.

“The Indian liquor market is growing at the fastest pace globally in the liquor segment,” said A.K. Prabhakar, a senior vice president for equity research at AnandRathi Financial Services in Mumbai. “A foreign investor in United Spirits will add brand and variety. For the long-term investor it is a great buy.”

For United Spirits’ biggest shareholder, the flamboyant millionaire Vijay Mallya, the deal provides a deep-pocketed partner who can invest in the business, which has run up a large debt in recent years, and also provide him with much-needed cash that he can use to repay the other loans that he and his holding company have amassed in recent years to pay for various acquisitions and to start an ill-fated airline.

The acquisition will be structured in two stages: Diageo will first acquire a 27.4 percent stake in United Spirits in two transactions and later make an open offer to all public shareholders for another 26 percent as required by Indian securities regulations. The agreement comes after several weeks of negotiations and four years after the companies last discussed a deal.

In the first stage of the deal, Diageo will buy shares totaling 19.3 percent of United Spirits from holding companies and trusts owned by Mr. Mallya, his family and his senior management. The remaining shares will come in the form of new stock issued by United Spirits. The companies said Mr. Mallya would remain chairman of United Spirits and his trusts and holding companies would retain nearly 15 percent of the company’s shares.

It was unclear on Friday exactly what the deal would mean for Mr. Mallya’s aviation business, Kingfisher Airlines, which suspended operations last month after protests by employees who had not been paid in months. That dispute was recently settled, but the airline still has to convince regulators and banks that it is viable before it can fly again. Kapil Kaul, an aviation consultant, estimates that Mr. Mallya and other investors must pump more than $1 billion into Kingfisher to revive it.

Mr. Mallya has said he would not sell the “family silver” to keep the airline afloat, but he has also said he plans to present a “rehabilitation” plan to Indian regulators and banks. Kingfisher, which has never made money, has debts totaling about $2.5 billion. In addition to the airline and United Spirits, Mr. Mallya also controls India’s largest beer brewer, a fertilizer company, a cricket team and a Formula One racing team.

On Friday, in a conference call with reporters, Mr. Mallya refused to say whether he would use proceeds from the sale of United Spirits to revive Kingfisher.

“We have multiple businesses and each business operates independently,” he said. “There is no cross-contamination. There has never been, there never will be.”

In United Spirits, Diageo will get several popular Indian liquor brands like McDowell’s, Bagpiper, Royal Challenge and Antiquity, most of them whiskeys. India is the world’s largest market for that spirit but most of it is made from molasses, not grain.

In 2007, United Spirits acquired Whyte and Mackay, a Scottish distiller that makes brands like Dalmore and Isle of Jura for nearly 600 million pounds, or $960 million at current exchange rates. Analysts said Diageo might be forced to sell Whyte and Mackay to win approval for the deal from European competition regulators.

Analysts said the United Spirits deal was an acknowledgement that Diageo made a big mistake by selling an Indian whiskey business, Gilbey’s Green Label, during the recession in 2002 to focus on its international brands. Its chief competitor, Pernod Ricard, did not leave India and went on to reap big gains to become the largest international spirits company in the country, said Jeremy Cunnington, an analyst at Euromonitor International in London.

“It was a strategic mistake that put them in this place,” he said, but added that Diageo had been smart to wait to buy United Spirits until Mr. Mallya was in a relatively weak negotiating position. “They played a good tactical game over the past three years,” Mr. Cunnington said. “They saw U.S.L.’s weak finances and played a waiting game.”

Ivan M. Menezes, the chief operating officer of Diageo, declined to discuss the company’s 2002 exit from India during the conference call but said that the country would now become one of its largest markets.

“This will become Diageo’s No. 2 market after the United States,” he said. “This has the potential, in the long term, to become our largest market.”

Heather Timmons contributed reporting. Neha Thirani  contributed reporting from Mumbai.

A version of this article appeared in print on 11/10/2012, on page B3 of the NewYork edition with the headline: Diageo Buys Control of India’s Biggest Liquor Company.

Article source: http://dealbook.nytimes.com/2012/11/09/diageo-buys-controlling-stake-in-indias-biggest-liquor-company/?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Media Decoder Blog: Barnes & Noble Said to Put Publishing House Up for Sale

January 4, 2012 by Leave a Comment

Barnes Noble has put Sterling Publishing up for sale, nearly a decade after it purchased the publishing house, said a person briefed on the matter.

The move is another sign that Barnes Noble, the nation’s largest bookstore chain, has intensified its focus on the digital side of the book business and is willing to shed other assets. Sterling Publishing, based in New York, has imprints focused on nonfiction, children’s books, crafting, cooking and self-help, among others.

Barnes Noble first announced in 2002 that it had purchased Sterling, leaving trade publishers bristling at the notion of competing with the bookseller as a publisher. At the time of the purchase, Sterling had a backlist of 4,500 titles.

Mary Ellen Keating, a spokeswoman for Barnes Noble, declined comment. The news was first reported by The Wall Street Journal online.

Peter Wahlstrom, a senior analyst with Morningstar Equity Research, said that Sterling, whose sales are not stated in Barnes Noble’s public filings, was not a core piece of the company’s business.

“They probably don’t have the time to dedicate the resources to it, or they’ve got bigger fish to fry,” Mr. Wahlstrom said. “They need to be very careful where they’re spending their money and I don’t think they’re seeing the benefits of owning a publishing business.”

Article source: http://feeds.nytimes.com/click.phdo?i=40706bc36ecb2ef6f41ac3b2e71a8cd0

Filed Under: Business News Tagged With: , ,

As Dizzying Week Ends on Wall Street, Dangers Linger

August 13, 2011 by Leave a Comment

The main American stock indexes finished the week down less than 2 percent after a second consecutive day of gains on Friday. Although there was a sense of relief that the economy had not fallen off a cliff — the Standard Poor’s 500-stock index started the week plunging nearly 6.7 percent — there was little to celebrate as new data showed consumer sentiment had sunk below levels seen during the financial crisis three years ago.

The week ended on a quiet note, but many think that the Wall Street roller coaster ride is likely to continue — and that there may be more stomach-churning drops before the cars return to the platform.

“Heightened volatility is here to stay,” said Sam Stovall, chief investment strategist for Standard Poor’s equity research.

“The markets are much more interconnected than they have ever been, and new players are exacerbating the swings,” he added. Investors’ memories of 2008 are “very fresh and will cause them to sell first and ask questions later.”

Further undermining investor confidence is the fact that nearly all of the Western markets appear to be moving in lockstep, undergoing disruptive episodes simultaneously. That makes it difficult for investors to find a safe place to park their money — hence the rush to cash and other havens like United States bonds and gold — and stirs even more anxiety about interconnected risks between the European and American debt crises.

“This has been an unbelievable week. You just had fear totally take over,” said Scott Wren, the senior equity strategist for Wells Fargo Advisors. “And the problems have not been solved. European sovereign debt issues are not going to go away. The debt and deficit situation is not going to go away.”

On both sides of the Atlantic, investors had been bracing for a sell-off on Monday, after Standard Poor’s stripped the United States of its top credit rating. The S. P. plunged 6.66 percent. Tuesday, the Federal Reserve provided investors with a whiff of relief when it pledged to keep interest rates near zero for the next two years. The S. P. leaped 4.7 percent on the news.

The European Central Bank also moved to steady the markets, buying Italian and Spanish bonds to calm investor concerns that those countries would not be able to pay their debts.

 The rally did not last long. By Wednesday morning, American and European bank stocks were under attack as investors feared a repeat of the crisis or another recession. The S. P. lost 4.4 percent.

On Thursday, upbeat earnings news and reports of a ban on short-selling by several European countries, provided relief. The S. P. jumped 4.6 percent. Friday, upbeat retail sales helped break the up and down cycle and the S. P. was up half a percent, ending the week 1.7 percent lower.

“The markets are having a lot of trouble assessing the full extent of this,” said Tobias Levkovich, Citigroup’s chief United States equity strategist. “We are used to volatility, but these intraday swings are just remarkable.”

Analysts and others on Wall Street who were doing a postmortem on the turbulence had plenty to choose from. New data suggested the United States economy was worsening and could even slip back into a recession, forcing investors to scale back their growth expectations. The downgrade of government bonds by Standard Poor’s further rattled confidence among consumers and businesses. On Friday, despite the rising retail sales, preliminary data for one of the leading barometers of consumer confidence fell in August to its lowest levels since May 1980.

In addition, there are growing concerns about the solvency of European governments and fears that troubles in its financial system could spread to American shores.

Still, the Euro Stoxx 50, an index of large companies on the Continent, fell 2.9 percent last week and is down nearly 12 percent this year. That is nearly double the 6.3 percent decline of the S. P. 500 since January.

Julie Creswell and Ron Lieber contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=37f3eba554da3db613ed984c5a31d8c2

Filed Under: Economy News Tagged With: , ,

Stocks & Bonds: Stocks Off Slightly in Sixth Straight Decline

June 9, 2011 by Leave a Comment

The Dow Jones industrial average dropped 21.87 points, or 0.18 percent, to 12,048.94, while the Standard Poor’s 500-stock index lost 5.38 points, or 0.42 percent, to 1,279.56. The Nasdaq composite index fell 26.18 points, or 0.97 percent, to 2,675.38.

The S. P. was off about 5.7 percent from its 2011 intraday high hit on May 2. Stocks have come under pressure recently because of several weak economic reports, especially the labor market.

The weakness was highlighted by Mr. Bernanke’s comments late Tuesday. He acknowledged that the recovery has slowed, but offered no hint that the Fed was considering any more stimulus to accelerate growth.

“Investors are repricing the slowdown after Bernanke crystallized it,” said Jason L. Ware, senior equity research and trading analyst at the Albion Financial Group in Salt Lake City. “The market was hoping for an indication that there may be another round of stimulus, but clearly that’s not what they got.”

The Fed’s $600 billion second round of stimulus, expected to end this month, had been a catalyst for the stock market’s advance.

Stocks in the health care and utility sectors rose, but financials and technology, sectors closely related to growth, kept up their losing streak.

“I think 1,250 is a key level and, if we get there, likely to provide support for the market, barring any further erosion in the underlying economic data,” Mr. Ware said, referring to the S. P. 500.

There were also signs of weakness from corporate America. Ciena, the communications networking equipment provider, forecast third-quarter revenue below expectations, driving down its stock and others in the sector.

Ciena fell 16.2 percent, to $20.29, while JDS Uniphase dropped 5.5 percent, to $17.40.

Limiting losses, the energy sector rose after talks at OPEC in Vienna broke down without an agreement on a production increase. The S. P. 500 energy index rose 0.5 percent, and Exxon Mobil, which said it discovered two vast oil reserves in the Gulf of Mexico, was up nearly 1 percent at $80.76.

Crude oil futures rose 1.7 percent to settle above $100 a barrel, at $100.74.

The Treasury’s 10-year note rose 14/32, to 101 17/32. The yield fell to 2.95 percent, from 3.00 percent late Tuesday.

Article source: http://feeds.nytimes.com/click.phdo?i=195cb86ecd1f2fd41589d803e8722949

Filed Under: Economy News Tagged With: , ,