Archives for September 29, 2018

BlackBerry Ltd.’s shares soared Friday after its latest financial results topped expectations and it outlined plans for growth in autonomous driving, a push into health care and intentions to add significant engineering talent.

The company beat expectations through growth in its enterprise software and services business, as well as in its fast-growing automotive division, John Chen, BlackBerry’s executive chairman and chief executive, said.

“Transportation, especially when it comes to autonomous driven vehicles and connected car, that unit had done the best in the last quarter,” he said.

The company, which keeps its books in U.S. dollars, said it earned US$43 million or eight cents per basic share in its latest quarter, more than double earnings of $19 million or four cents per basic share a year ago.

On an adjusted basis, BlackBerry said it earned four cents per share for the quarter, beating the penny per share profits analysts on average had expected according to Thomson Reuters Eikon.

The company’s shares were up $2.20 or 16.6 per cent to $15.49 in late-morning trading on the Toronto Stock Exchange. While overall revenue dropped to $210 million from $238 million last year, the automotive division saw 29 per cent revenue growth with more to come, said Chen.

“It will continue to grow double-digit for the next couple quarters, so we think that is a big growth opportunity for BlackBerry.”

The company recently announced a partnership with Ottawa-based technology accelerator L-SPARK to help small- and medium-sized businesses bring new products to market using its BlackBerry QNX automotive software.

Chen said the company also plans to ramp up efforts in autonomous driving and other divisions.

“You ask our own people, who are much more bullish than I am, they’re talking about adding a thousand engineers,” he said.

“It’s going to be multi-years, I mean you can’t find a thousand engineers because there’s such high demand and short supply. But we do have the advantage that a lot of our development organization is in Canada, so we’re very closely tied to the university programs. So we’re going to hire a lot of engineers I’m sure.”

But while technology development is ramping up on the automotive side, Chen said he’s more cautious than his colleagues as to when we’ll see fully autonomous vehicles take hold.

He said the technology should be available and affordable in the next few years, but thinks infrastructure and policies on safety and other issues will push back a widespread rollout.

Thousands of travellers in Europe saw their plans disrupted Friday after airline Ryanair cancelled more than 200 flights because of strikes by cabin crew in Spain, Belgium, Holland, Portugal, Italy and Germany.

The budget airline says it had informed passengers of possible disruptions ahead of time, giving them time to adjust.

In Tenerife, Spain, hundreds of passengers queued at Ryanair counters and dozens more at the Madrid airport as 86 flights of the low-cost company from or to Spain were cancelled, affecting some 16,000 passengers, according to Spanish unions.

The unions blame the Ireland-based company for breaking talks over the company’s ratio of outsourced workers, working conditions and their demand for local contracts instead of Irish ones.

In a statement Thursday, the company blamed cabin crews of competitors for organizing the strikes and blocking “significant progress” in labour negotiations.

But the Brussels-based European Cabin Crew Association, which says it has more than 35,000 members, supported the walkout over what it described as the airline’s “inflexibility, single-mindedness and unreasonable behaviour.”

The association alleged Ryanair was intimidating strikers by threatening them with job losses.

As the company and labour groups traded accusations, some passengers left on the ground by the cancellations were galled.

“They (Ryanair) sent me a text saying, ‘Have a look at your email.’ I don’t have an email,” said Eddie Hughes from Norfolk, England, at Madrid airport.

Spanish cabin crew workers’ unions said cancellations could be increasing throughout the day. Airports in Valencia, Mallorca and Tenerife are the most affected, the unions said.

In Portugal, 13 morning flights were cancelled and in the Netherlands, 14 of 22 flights were cancelled.

Statistics Canada says the economy grew by 0.2 per cent in July, boosted by strength in the manufacturing sector.

The increase followed essentially no change in the country’s real gross domestic product in June.

Economists had expected an increase of 0.1 per cent for July, according to Thomson Reuters Eikon.

Goods-producing industries grew 0.3 per cent, while services-producing industries increased 0.2 per cent.

Statistics Canada says 12 of 20 sectors gained ground as the manufacturing sector grew 1.2 per cent in the month, its strongest showing since November 2017.

Wholesale trade grew 1.4 per cent, while transportation and warehousing services grew 0.9 per cent.

Canada’s transport regulator has certified Bombardier Inc.’s longest-range aircraft, paving the way for the plane-and-train maker to start delivering its largest business jet to clients.

The Global 7500 will enter into service later this year, Transport Canada said in a release Friday.

The thumbs-up marks a key milestone in the transportation giant’s turnaround plan after it sold a majority share of its C Series commercial jet program to Airbus in July, said AltaCorp Capital analyst Chris Murray.

The new business jet — now the largest and longest-range business jet on the market, according to Transport Canada — is sold out through 2021, Murray noted, though Bombardier has not revealed the number of orders.

Murray forecast a small number of deliveries in 2018 before production ramps up through 2020.

The Global 7500, along with the new Global 5500 and 6500, comes partly as a response to products from rival business jet manufacturer Gulfstream Aerospace as demand for the jetliners gains elevation, said Cormark Securities analyst David Tyerman.

“The market environment has been improving, but it’s coming off of a lower base. It hasn’t been that strong for many, many years,” Tyerman said in an interview.

“It potentially can be quite profitable for Bombardier. The high-end models tend to have higher margins.”

The Montreal-based company is aiming for US$8.5 billion in annual revenues by 2020 driven largely by Global 7500 sales, a major bump from last year’s US$5 billion, said RBC Dominion Securities analyst Walter Spracklin.

The certification came the same day Bombardier announced that HK Bellawings Jet Ltd. has firmed up an order for two Global 7500 and four Global 6500 business jets. The deal with the Hong Kong aircraft management company is valued at about US$370 million, Bombardier said.

The new aircraft — originally dubbed the Global 7000 — has a capacity of 19 passengers and a range of more than 14,000 kilometres, long enough to link destinations such as Toronto and Hong Kong.

Transport Minister Marc Garneau and Bombardier business aircraft president David Coleal attended a certification ceremony on the island of Montreal Friday afternoon.

“The certification of the Bombardier Global 7500 aircraft is a significant accomplishment that will create good quality jobs for Canadians and support the continued growth of the local and regional economies where these aircraft are built,” Garneau said.

Transport Canada said it supervised and carried out more than 360 hours of ground and flight testing during the certification process