Today’s top stories
BlackBerry loses US$42 million in second quarter
BlackBerry Ltd. says it lost US$42 million in the second quarter of its 2024 fiscal year, compared to a loss of US$54 million in the same period last year.
The Waterloo, Ont.-based tech company, which reports its earnings in U.S. dollars, says the loss works out to seven cents per diluted share.
BlackBerry says its revenue for the second quarter was $132 million, compared to $168 million in the prior year’s quarter.
While revenue from the company’s cybersecurity segment declined by 40 per cent year-over-year, revenue from its IoT segment increased by four per cent.
The company says it expects its IoT revenue to continue to grow, and is forecasting its fourth quarter to be the strongest ever for that segment.
BlackBerry also announced the resignation of Timothy Dattels from its board of directors today.
The Canadian Press
B.C. Rogers technicians give strong strike mandate amid concerns over Shaw job losses
Around 300 former Shaw technicians absorbed by Rogers Communications Inc. during the companies’ merger have overwhelmingly voted to strike amid concerns over job security following recent layoffs and voluntary departures.
The union representing the workers, who are based in Vancouver, Richmond, Surrey and Langley, B.C., says those job losses call into question Rogers’ commitment to create 3,000 new jobs in Western Canada over five years — a federally mandated condition of the $26-billion takeover.
In July, Rogers began offering voluntary departure packages and confirmed an unspecified number of employees were laid off as it integrated with Shaw and worked to eliminate duplication.
Jayson Little, a spokesperson for United Steelworkers union Local 1944, says Rogers is seeking to erode contractual language that prevents staff technicians’ work from being performed by contractors at homes and businesses. Rogers did not immediately provide comment.
The union says its members will be in position to walk off the job in late October if the impasse hasn’t been solved after receiving a 99.6 per cent strike mandate in last Friday’s vote.
The two sides have been at the bargaining table since February as the union’s members work under the terms of their previous collective agreement that expired on March 23.
The Canadian Press
Nike’s profit beats expectations as inventory glut eases
Nike Inc. reported a drop in its stockpile of inventory — a sign the company is making progress in moving out older merchandise for newer, more-profitable items. The shares rose in late trading.
Inventory fell 10 per cent from a year earlier to US$8.7 billion, which was a bigger decline than analysts expected, according to estimates compiled by Bloomberg. Revenue of US$12.9 billion for the quarter ended Aug. 31 was just short of Wall Street’s average estimate, while gross margin, a key gauge of profitability, was higher than expected.
Nike has been offering discounts to get excess merchandise off of store shelves — a move that erodes profitability. The decline in inventories is a sign that tighter management is paying off. Earnings per share of 94 cents outpaced expectations.
Revenue fell two per cent in North America, the sportswear giant’s home market, just below expectations. Sales in the Greater China region cooled as well, with growth of 4.8 per cent falling short of estimates.
The shares rose 1.1 per cent at 4:35 p.m. in after-market trading in New York. The stock has dropped 23 per cent year-to-date through today’s close.
Artizia sees $6-million net loss in Q2, CEO says results ’do not meet our high standards’
Aritzia Inc. says it incurred an almost $6 million net loss in its latest quarter as its chief executive admitted the financial results do not meet its “high standards.”
The Vancouver apparel company says the net loss in the second quarter compared with a net income of $46 million during the same period the year before.
Aritzia’s net loss amounted to five cents per diluted share for the period ended Aug. 27 compared with a net income of 40 cents per diluted share a year earlier.
On an adjusted basis, its net income totalled $3.4 million compared with $50.6 million a year prior.
Chief executive Jennifer Wong says the quarter was hampered by the company missing opportunities in its product assortment and a more difficult consumer environment.
However, she says the company’s performance was better than expected as it managed to eke out $534.2 million in net revenue, up from $525.5 million a year ago.
The Canadian Press
Market close: TSX up more than 100 points, U.S. stock markets also higher
Canada’s main stock index regained some of its recent losses as it rose more than 100 points in trading, while U.S. stock markets also moved higher.
The S&P/TSX composite index was up 154.76 points at 19,590.74.
In New York, the Dow Jones industrial average was up 116.07 points at 33,666.34. The S&P 500 index was up 25.19 points at 4,299.70, while the Nasdaq composite was up 108.43 points at 13,201.28.
The Canadian Press
First Nation wants reasons for Trans Mountain ruling; says it’s entitled to appeal
A B.C. First Nation is asking the Canada Energy Regulator to release its reasons as soon as possible for allowing a modification of the Trans Mountain pipeline’s route.
In a letter to the regulator dated Wednesday, a lawyer representing the Stk’emlupsemc te Secwepemc Nation (SSN) said the decision to grant the route deviation Monday without providing its reasons has left the First Nation without the ability to decide its next steps.
The letter said the First Nation has the right to request a reconsideration of the decision, or to appeal it through the Federal Court of Appeal.
“This has, in fact, created significant uncertainty for SSN and left SSN without the procedural options that would otherwise be afforded to it with the potential for irreparable harm to its rights and title as a result,” the letter states.
The Canada Energy Regulator ruled Monday to allow Trans Mountain Corp. to alter the route slightly for a 1.3-kilometre stretch of pipeline in the Jacko Lake area near Kamloops, B.C.
It said it would release its reasons for the decision in the coming weeks.
Trans Mountain Corp, a Crown corporation, had requested the change because of what it said were engineering difficulties in the area related to the construction of a tunnel.
The company had warned that being forced to stick to its original route and construction method could result in up to a nine-month delay in the pipeline’s completion, as well as an additional $86 million more in project costs.
Trans Mountain had been hoping to have the pipeline completed by early 2024.
But the Stk’emlupsemc te Secwepemc Nation, whose traditional territory the pipeline crosses and who had only agreed to the originally proposed route, opposed Trans Mountain’s application.
The First Nation has said the new route threatens to disturb land that has spiritual and cultural significance.
The First Nation’s lawyer said in the letter Wednesday that Trans Mountain has indicated it wants to break ground on the new route on Oct. 2.
The Trans Mountain pipeline is Canada’s only pipeline system transporting oil from Alberta to the West Coast. The expansion, which is currently underway, will boost the pipeline’s capacity to 890,000 barrels per day (bpd) from 300,000 bpd.
The pipeline — which was bought by the federal government for $4.5 billion in 2018 after previous owner Kinder Morgan Canada Inc. threatened to scrap the expansion project in the face of environmentalist opposition and regulatory hurdles — has already been plagued by construction-related challenges and delays.
Its projected price tag has also soared: first to $12.6 billion, then to $21.4 billion and most recently to $30.9 billion.
The Canadian Press
Yoshua Bengio urges ‘extreme’ caution on AI
The founder and scientific director of Montreal’s Mila AI institute has noticed countries and their militaries hurtling toward the technology at the same time the globe is settling into a Cold War-like environment.
He says the globe needs to treat AI with “extreme” caution because technology is powerful and can ultimately produce both good and bad.
When a technology is as powerful as AI, he says democratic governance becomes even more important.
Bengio’s remarks came on the heels of the federal government’s voluntary code of conduct which is meant to encourage companies to ensure their AI systems are safe, fair and transparent, have human oversight and accountability mechanisms and are able to thwart cyberattacks.
Signatories, including Open Text Corp., Cohere, BlackBerry Ltd. and Telus Corp., have agreed to test AI systems in advance of deploying them to uncover potential risks and biases, and promised to implement measures to mitigate the dangers.
The Canadian Press
Midday markets: Stocks regain some ground
Stocks are pushing back against recent losses, with the TSX up more than 100 points at noon and U.S. markets also moving higher.
WTI oil was down 75 cents at US$92.93 per barrel.
Swedish battery giant Northvolt to build $7-billion factory in Quebec
The company will start construction of the battery factory just outside Montreal later this year, with production due to start in 2026. It’s targeting customers including Volkswagen AG, Volvo Cars and Bayerische Motoren Werke AG (BMW) in North America.
“North America is the next frontier for Northvolt,” co-founder Paolo Cerruti told the Financial Times. “We picked Canada mainly because of the renewable energy, the raw materials, the attitude of the government we have found here.”
Government funding will amount to about US$1 billion each from Canada and Quebec toward construction, mostly in loans that may be partially forgiven if Northvolt meets certain conditions. As part of its share, Quebec is buying a US$420-million equity stake in Northvolt.
The factory is expected to employ 3,000 people in its first stage, the Financial Times reported.
Financial Post, with additional reporting from Bloomberg, The Financial Times
Stock markets are open: TSX gains, Wall Street mixed
Wall Street is holding near its lowest level since June as stocks drift.
The S&P 500 was 0.1 per cent lower shortly after Thursday’s open, still on track for its worst month of the year by far. The Dow was up 12 points, and the Nasdaq composite was down 0.4 per cent.
In Canada, the S&P/TSX composite index eked out a gain, up 0.15 per cent.
Stocks have tumbled this month as Wall Street increasingly accepts a new normal where interest rates will stay high for a while.
The Associated Press
Job vacancies fall again in July
Statistics Canada says the number of job vacancies in July fell 5.8 per cent to their lowest level since May 2021.
The agency says the number of job vacancies fell declined by 43,100 to 701,300 in the month, continuing a steady downward trend since June last year.
On a year-over-year basis, Statistics Canada says the number of job vacancies was down by 28.1 per cent or 273,700.
The number of unfilled jobs in retail trade fell by 10,800, or 12.8 per cent, while the accommodation and food services sector saw a drop of 10,400, or 11.6 per cent.
The job vacancy rate — which corresponds to the number of vacant positions as a proportion of total labour demand — fell 0.3 percentage points to 3.9 per cent in July.
Statistics Canada says there were 1.7 unemployed people for every job vacancy in July, up from 1.5 in June and 1.2 at the start of the year.
The Canadian Press
Costco is selling gold bars to Canadians — free samples not included
Costco Wholesale Corp. has gotten into the gold game, and no, there won’t be free samples. The big-box retailer has begun selling bullion directly to Canadians, save for shoppers in Manitoba.
The company is selling PAMP Suisse Lady Fortuna Veriscan 24-karat gold bars at $2,679.99 each, or roughly US$1,985 per ounce, a modest premium to the spot gold price of US$1,876 per ounce as of Sept. 28.
The bars appear to be flying off the shelves. Richard Galanti, Costco’s chief financial officer, said on a Sept. 26 earnings call the retailer can’t keep the gold in stock.
“I’ve gotten a couple of calls that people have seen online that we’ve been selling one-ounce gold bars,” he said. “Yes, but when we load them on the site, they’re typically gone within a few hours, and we limit two per member.”
The company is also limiting how many transactions a customer can make, with members only allowed to buy every seven days, to the maximum of two gold bars. No returns or refunds are allowed.
CEBA changes ‘unhelpful,’ CFIB survey of business owners says
Small business owners are unhappy with the federal government’s changes to the Canada Emergency Business Account (CEBA) repayment deadline, according to an industry survey.
Eighty per cent of owners said Ottawa’s extension to the loan deadline was “unhelpful,” a survey from the Canadian Federation of Independent Business said.
The extension offered “false hope,” CFIB said, because it did not grant owners extra time to take advantage of a loan forgiveness grant worth up to $20,000. That deadline, originally sent for Dec. 21, 2023, was only extended by 18 days.
“All summer, small business owners from across the country have been telling MPs they need an extension in the deadline to repay CEBA loans in order to keep the forgivable portion. Ottawa has been told the scope of the problem, government has been told what’s at stake. Unfortunately, their pleas fell on deaf ears,” Dan Kelly, CFIB president said.
Eighty-seven per cent of owners surveyed said extending the forgivable deadline to the end of 2024 would be “greatly beneficial” to their operations.
Bank of Canada to start cutting rates in second half of 2024: Desjardins
Canada’s near-term economic struggles will ease next year when growth returns and the Bank of Canada begins cutting its key lending rate, a new forecast from Deloitte Canada said.
A better-than-expected U.S. outlook and continued population growth here will offset some of the downward pressure from high household debt, soaring interest payments and stubbornly persistent inflation, the company said in its latest economic outlook report, released Thursday.
“We do have an economy getting back on its feet in the first half of next year,” said Dawn Desjardins, chief economist at Deloitte Canada, who co-authored the report.
“The recovery will pick up steam in the second half of 2024 because it’s during the time we anticipate the Bank of Canada will be able to pivot from having high interest rates we’re living with today,” she said.
The report estimates GDP will rise one per cent this year and 0.9 per cent next year. Deloitte Canada had earlier predicted GDP would contract 0.9 per cent in 2023.
The next two quarters for the Canadian economy, however, are going to be tough, Desjardins said.
“Canada’s economy has entered a rough patch and the growth is likely to be negligible,” she said. “In fact, we have a few negative quarters in the forecast.”
The Canadian Press
Lululemon and Peloton team up
Peloton Interactive Inc. shares are rising in pre-market trade after a deal was announced with Canadian giant Lululemon Athletica Inc. to tap its online workouts and team up on apparel.
The deal will make Vancouver-based Lululemon the primary athletic apparel partner of Peloton, while New York-based Peloton will be the exclusive digital fitness content provider to Lululemon.
Subscribers to Lululemon’s digital services will also get access to various levels of Peloton digital classes, depending on their payment tier.
The deal comes as Lululemon moves to discontinue selling its digital fitness screen called the Studio Mirror and wind down its digital app-only membership.
Peloton, meanwhile, has had a rocky stretch that saw its founder step down as CEO last year. The company is working to rebrand as a health technology company.
The Canadian Press
Stock markets: Before the opening bell
Stocks are drifting lower today, knocked by fresh fears over China’s property sector after trading in shares of heavily indebted Evergrande Group was suspended in Hong Kong.
Evergrande is the world’s most heavily indebted real estate developer and is at the centre of a property market crisis that is dragging on China’s economic growth.
It’s just one in a long list of investor worries this month that has put September on track to be the worst month for stocks this year. Another is the threat of a U.S. government shutdown as Capitol Hill threatens a stalemate that could shut off federal services across the country as soon as this weekend.
Dow futures this morning are down nearly 0.1 per cent and S&P 500 futures are virtually unchanged.
Canada’s main stock index closed last night more than 100 points lower despite strength in energy stocks as the price of oil climbed. The S&P/TSX composite index closed down 120.17 points at 19,435.98.
WIT oil briefly surged to US$95 a barrel yesterday, its highest price since August last year, before paring gains. It was trading at US$93.45 this morning.
With demand proving resilient, many in the market now see US$100 oil as inevitable, even as the dollar rallies and worries about high global interest rates persist.
The Associated Press, Canadian Press and Bloomberg
What to watch today
Innovation Minister François-Philippe Champagne is among speakers at the ALL IN 2023 in Montreal, an event focused on artificial intelligence, governance and how it transforms industries.
The Canadian Club hosts a forum on Indigenous Ownership & Canada’s Economic Future in Toronto
Canada job vacancies and employment growth numbers for July are coming out at 8:30 a.m. ET and are likely to confirm that labour demand continues to slow. We will also get the latest numbers on real gross domestic product from the United States.
Earnings out today include BlackBerry Ltd., Aritzia Inc. and Nike Inc
Need a refresher on yesterday’s top headlines? Get caught up here.
Additional reporting by The Canadian Press, Associated Press and Bloomberg