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A ministerial mixup Call it the Italian job.
A professor at Ontario's University of Guelph is embroiled in a case of similar names and mistaken identities in the transfer of power in Italy.
Francesco Braga, who has lived away from Italy for almost three decades, was taken aback, to say the least, when he learned he'd been pegged for the job as undersecretary at the agriculture ministry in Rome.
Initial reports from the European media had it that the professor, who was even congratulated by Italy's Parmesan cheese manufacturers group, was named to the post mistakenly, when the job was supposed to go to someone with a similar name, Professor Franco Braga, who indeed lives in Italy.
But here's what I now understand, and it's still a bizarre tale. Canada's Mr. Braga didn't even know he was in the running for the post, but in fact he was. He found this out early Tuesday, and even received an e-mail from the ministry saying officials needed to contact him. In Rome, the agriculture minister went so far as to say that he knew Canada's Mr. Braga by reputation, and that he was a worthy fellow.
And indeed he is, as an expert in agriculture at the Ontario university.
But somehow, someone also contacted the other Mr. Braga and told him he got the job, which is odd, despite the similarity in the names, given that he's an expert in construction engineering and apparently wanted a position in infrastructure.
I hope Canada's Mr. Braga gets the job in the end, though that would be a loss for the U of Guelph.
(An earlier version of this post carried the European reports.)
Lululemon boosts profit, stock sinks Shares of Lululemon Athletica Inc. sank today even as the yoga wear retailer posted a hefty jump in both profit and revenue.
The company earned $38.7-million (U.S.) or 27 cents a share in the quarter, up from $25.7-million or 18 cents a year earlier, The Globe and Mail's Marina Strauss reports. Revenue climbed 31 per cent to $230.2-million, and same store sales, a key measure in retailing, rose 16 per cent.
Lululemon projected fourth-quarter revenue of $327-million to $332-million, and diluted earnings per share of 40 cents to 42 cents.
Its third-quarter sales missed analysts' estimates, leading to the rout in the market.
"Investors in Lululemon have been conditioned to see significant sales upside and we didn't see that today," said Liz Dun of Macquarie Group, according to Bloomberg.
Chief executive officer Christine Day still declared it "another very healthy quarter of financial results," and said the popular retailer is set to close out the year with "a stronger brand, a stronger organization."
Ms. Day said inventory levels, which have not been able to keep up with high demand in the past, will be at normal levels in the fourth quarter, potentially leading to a higher level of price discounting at the end of the season to clear excess merchandise. Ultimately, more markdowns could pinch profit margins, company executives warned on a conference call.
"Lulu remains an attractive growth story, in our view; however, today's numbers likely won't be enough to keep the stock going at its current multiple," said Nomura analyst Paul Lejuez, according to Reuters.
Howard Tubin of RBC Dominion Securities remained keen on the company.
"The quarter was solid, with upside across the board," he said. "This remains one of our favourite stories as Lulu remains in the early stages of its growth story and the company continues to outperform in a difficult consumer environment."
Lululemon's showing wasn't as bad as that of Gildan Activewear Inc. whose shares also plunged, and at a far faster pace at that, after it posted a drop in fourth-quarter earnings.
Gildan's profit slipped to $48.5-million or 40 cents a share from $56.8-million or 47 cents. Sales rose to $481.8-million from $368.9-million.
- Lululemon shares fall despite climbing profit
- Gildan posts weaker fourth quarter
- CEO of the Year: Christine Day of Lululemon
- Lululemon and Gildan: the yin and yang of investing
Suncor's George to retire One of the kings of the oil patch is stepping down.
Rick George said today he planned to retire as chief executive officer of Suncor Energy Inc. at the energy giant's annual meeting next May. He'll be succeeded by Steve Williams, who has been chief operating officer since 2007 and was named president today.
Mr. George has been CEO for more than two decades and, of course, engineered the takeover of Petro-Canada
"During his 21 years as chief executive officer, Suncor has implemented game-changing technologies, merged with Petro-Canada, and increased production nearly ten-fold from 58,000 barrels per day in 1991," said chairman John Ferguson.
Eight days and counting By the euro zone's own calculations, eight days remain in which to save the crippled monetary union. But after the euphoria of yesterday's co-ordinated move by the world's major central banks, the outlook is still bleak.
You didn't even need a sober second look to determine that the move by the Federal Reserve, European Central Bank, Bank of Canada and others was a short-term Band-Aid. While it eased the pressure on the banks in the 17-member euro zone, and on the markets in general, it did nothing to address the underlying problems. Nor was it supposed to.
What it did was buy euro leaders some time to come up with solutions. And, as the EU's economic chief Olli Rehn put it this week, "we are now entering the critical period of 10 days to complete and conclude the crisis response of the European Union.
EU leaders meet Dec. 9, and the clock is ticking fast. After two years of struggling, European politicians have not convinced investors they can tackle the beast that is the debt crisis.
"The key question is does it fix the underlying problems within Europe?" said CMC Markets analyst Michael Hewson in London.
"No it doesn't. For a start it makes it much more difficult for peripheral Europe to recover competitiveness due to the stronger euro. It does however buy European leaders more time, so let's hope they use it wisely and don't waste it, but I'm not holding my breath."
Nor is Camilla Sutton, the chief currency strategist at Scotia Capital in Toronto.
In a report today titled "Eight days left - expect to be disappointed," Ms. Sutton noted that currency markets remain hopeful that next week's summit will further soothe fears, though she doesn't expect that.
"Bond yields are mixed this morning, with large drops in French, Italian and Spanish yields; however German yields remain more elevated than they have been, suggesting that all is not well in Europe," Ms. Sutton added.
"Today ECB President Draghi says that central bank bond interventions can only be limited, reinforcing our base case that the ECB continues to flood the system with liquidity, maintains very loose monetary policy and purchases bonds through the SMP program, but does not turn to a massive round of unsterilized quantitative easing."
She was referring to Mario Draghi, the new chief of the European Central Bank. Many observers believe the only solution to the crisis is massive bond buying by the ECB, and declaring it the lender of last resort to embattled nations. But Germany opposes that, as does the central bank itself, though Mr. Draghi hinted today the ECB could do more.
- No game changer as central banks loose 'QE on steroids'
- ECB hints at bigger role in euro crisis
- Why central bank intervention should make us more worried
- Central banks turn on the taps
BP sells Canadian NGL business BP PLC is selling its Canadian natural gas liquids business for $1.67-billion (U.S.). But the energy giant said today Canada remains "an important part of our portfolio of growth opportunities to meet North America's energy needs."
The unit BP is selling owns or has rights to some 4,000 kilomtres of pipeline systems, 21 million barrels of storage capacity and natural gas liquids produced from more than 8 billion cubic feet a day of processing capacity, it said.
The business is being sold to a subsidiary of Plains All American Pipeline LP .
BP said the 450 people involved in the operation will transfer to Plains.
Canada's banks kick off earnings Canada's big banks began kicked off their fourth-quarter earnings season today, with gains by Canadian Imperial Bank of Commerce and Toronto-Dominion Bank , The Globe and Mail's Grant Robertson and Boyd Erman report.
TD's profit climbed 58 per cent to $1.57-billion or $1.69 a share from $994-million or $1.07. Revenue increased 13 per cent.
"TD had a record year in 2011, and we were able to succeed because of the strength of our retail-focused strategy and its proven track record during tough times, as well as the client-driven franchise model of our wholesale bank," said chief executive officer Ed Clark.
CIBC profit, in turn, rose 59 per cent to $794-million or $1.90 a share from $500-million or $1.17. While revenue didn't change much, CIBC's income tax expense fell markedly to $249-million.
"Our capital position remains among the best of any bank globally and we continue to take steps to further grow our business by investing in organic growth and through acquisitions," said chief executive officer Gerry McCaughey.
- TD, CIBC fight through tough capital markets to beat expectations
- TD profit climbs 58%
- CIBC quarterly profit jumps as tax expense falls
Bombardier sneaks past estimates Canada's Bombardier Inc. edged past analysts estimates today with third-quarter earnings that its aerospace and rail units turned in okay results in the midst of troubled times for the global economy.
Bombardier earned $192-million (U.S.) or 11 cents a share, up from $147-million or 8 cents a year earlier, The Globe and Mail's Bertrand Marotte writes from Montreal. Revenue climbed to $4.6-billion from $4-billion.
"Our focus on execution permits us to continue to deliver good results in these uncertain economic times," said chief executive officer Pierre Beaudoin.
Top court to hear case The Supreme Court of Canada will weigh into the high-stakes debate about whether pension plan members have a claim on an insolvent company's assets to cover shortfalls in their plan, The Globe and Mail's Janet McFarland reports today.
The court said it has agreed to hear an appeal of a landmark Ontario court ruling that reversed the traditional pecking order for distributing corporate assets when a company goes bankrupt.
The June decision by the Ontario Court of Appeal concluded former employees of aluminum processor Indalex Ltd. had a priority claim on their company's assets to fund a shortfall in their pension plan.
CPPIB eyes piece of Yahoo Yahoo Inc. is reportedly weighing competing bids to invest in the company, one from a consortium that includes the Canada Pension Plan Investment Board.
CPPIB is part of a group led by private equity concern Silver Lake, and includes Microsoft Corp. and Andreessen Horowitz, a venture capital company, The Financial Times reports.
That group is offering $3-billion (U.S.), or $16.60 a share, for some 13 per cent of Yahoo, the newspaper said.
The rival bid is from TPG, also a private equity group, but at $17.50 a share. Other groups are also weighing the possibility of bids.
While Silver Lake's offer is below that of TPG, The Financial Times said, it still hopes to emerge victorious because of its proposed strategy, which would see a new board of directors and a new CEO at the helm.
As The Globe and Mail's Tara Perkins and Boyd Erman reported in October, the CPPIB made a handsome profit in an earlier investment in Skype Technologies, and is now looking at a bigger and riskier move into the tech sector.
Yahoo's board, of course, is the one that fired Carol Bartz as the chief in September. That's the same board she, in turn, famously referred to as "doofuses."
Business ticker
- Price-fixing appeals go to top court
- More Americans seek unemployment aid
- U.S. manufacturing growth picks up
- Ontario pension fund plans $300-million Toronto complex
In Economy Global economic turmoil has sent confidence levels among Canadian exporters tumbling to their lowest level since the recession, Tavia Grant writes.
In International Business China's leaders are reversing their two-year effort to cool the economy, seeking to counter slowdowns in manufacturing and property that are dragging growth lower and threatening to spur unrest, Elaine Kurtenbach and Joe McDonald of The Associated Press report.
In Globe Careers What do you do when the mere thought of your daily grind makes you want to do yourself in? J. Maureen of Forbes.com looks at the issue.
From today's Report on Business