Blackberry shares jump on deal talk

Blackberry launched the Z10 this year Shares in smartphone maker Blackberry jumped more than 5% in New York following a report that the company is considering a major shift in strategy.

According to a Reuters report, Blackberry's management is considering taking the company private, which means buying out existing shareholders.

Going private would allow the company to reorganise its business without the pressure of shareholder scrutiny.

Blackberry has been losing money after failing to keep up with its rivals.

Last month the company's chief executive said that Blackberry was on the right and track, but needed more time to fix its problems.

Continue reading the main story If Blackberry decided to go private it would have to find partners who could raise the billions of dollars need to buy out existing shareholders.

That could prove difficult as the company has been struggling.

In its most recent quarter, Blackberry lost $84m (£54m) and expects to lose more money in the three months to the end of September.

Blackberry launched two all-new smartphones this year, the touchscreen Z10 device, followed by the Q10, with a mini keyboard favoured by many Blackberry users.

But some analysts have been disappointed by the sales of Blackberry's new phones.

Blackberry's managers will have noted the experience of computer maker Dell.

Founder Michael Dell is trying to buy out shareholders to help reorganise the firm.

But the plan resulted in a painful struggle with some shareholders accusing him and his partners of undervaluing their shares.

Wall Street Beat: Tech shares up as Internet stocks rise

Tech stocks had an upbeat week as industry watchers appear to be looking at the positive side of earnings from Internet, consumer electronics and networking companies.

IT industry bellwethers have reported mixed results for the quarter ending in June. This week, earnings season continued with reports from LinkedIn, Yelp and Sony, among other companies.

Tech shares led markets to close up Friday, even though several indexes were down earlier in the day after a tepid report on the U.S. jobs market. The Labor Department said that although the unemployment rate fell last month to 7.4 percent, its lowest since 2008, the country added just 162,000 jobs in July, below the average monthly 202,000 this year.

The tech-heavy Nasdaq gained 0.36 percent to close up by 3.34 points at 15,658.36. The Nasdaq Computer Index rose 0.56 percent to 1735.89.

This week, professional social network LinkedIn was the tech star, announcing second quarter revenue of US$363.7 million, an increase of 59 percent year over year, while net income rose from $2.8 million to $3.7 million. LinkedIn membership grew to 238 million, rising 37 percent year-over-year.

LinkedIn shares spiked Friday afternoon by $22.58 to close at $235.58.

"Decisions made two years ago to re-write LinkedIn's code base have enabled rapid product innovation, which is driving much higher member engagement, creating a foundation that helped fuel tremendous self-service ad sales," said Canaccord Genuity analyst Michael Graham in a research note.

Online user business reviews site Yelp also came out with strong results, reporting that net revenue jumped 69 percent year over year to $55 million. The company's loss shrank to $878,000 from $2 million. The average number of unique visitors per month rose 38 percent year over year to approximately 108 million, while active local business accounts increased 62 percent year over year to approximately 51,400.

Yelp shares jumped Friday by $5.52 to close at $57.02.

Though LinkedIn and Yelp revenues are minuscule compared to Facebook's, their rising user statistics appeared to fuel the general good feeling toward Internet stocks. Last week, Facebook said mobile ad sales stoked revenue, which jumped 53 percent year over year to $1.81 billion, while profit totaled $333 million compared to a net loss a year earlier.

Facebook this week finally succeeded in clawing its way back to its May 2012 initial public offering price of $38, on Friday closing at $38.05.

Consumer electronics giant Sony, meanwhile, reported a profit, pushing forward with a turnaround that was sparked previously by a sale of assets including its U.S. headquarters and a Tokyo office complex. This quarter, improved results came from a combination of solid smartphone sales and a favorable foreign exchange rate.

The company reported that net profit was ¥3.5 billion (US$35 million) in the quarter, compared to losses of ¥24.6 billion in the same quarter last year, while revenue increased 13 percent to ¥1.7 trillion.

Sony's mobile products and communications business reported revenue of ¥389 billion, a 36 percent increase year over year, underscoring the importance of mobile communications to the future of just about any company in the consumer electronics business.

"Semiconductors for smartphones will see healthy revenue growth as demand for increased speeds and additional features continue to drive high-end smartphone demand in developed countries and low-cost smartphones in developing countries," said Nina Turner, research manager for semiconductors at IDC in a report this week. PC chip sales will remain weak, but as smartphone sales surge, semiconductor revenue worldwide will increase this year by 6.9 percent, reaching $320 billion, IDC said in the report.

Meanwhile, the wireless infrastructure segment of Alcatel-Lucent's business remained stable in the second quarter as the company continues efforts to focus on IP networking and ultra-broadband equipment. Revenue rose 1.9 percent to €3.61 million, driven by strong growth in sales of IP networking equipment, the company said. However, the company reported a net loss of €885 million (US$1.15 billion) for the quarter, weighed down by a charge of €552 million following a re-evaluation of assets, and restructuring charges of €194 million.

A strong week for tech stocks bodes well for confidence in the tech sector, as investors seem to be accentuating the positive aspects of what has been by most accounts a mixed quarter. But potential pitfalls remain.

Continued global macroeconomic uncertainty from a slowdown in China, the eurozone debt crisis and recession, Japan recession and the U.S. government spending cutbacks as a result of political compromise could all be factors weighing down IT, particularly spending that affects sales of components, IDC said in its report.

Zynga Shares Fall on News It Is Ending Plan for Gambling

“Zynga is making the focused choice not to pursue a license for real money gaming in the United States,” the company said in a statement. “Zynga will continue to evaluate all of its priorities against the growing market opportunity in free, social gaming, including social casino offerings.”

The announcement, which came on a day when Zynga reported quarterly results mostly in line with investor expectations, sent its shares down 13 percent, to $3.06 in after-hours trading.

Over the last year, Zynga’s business model has rapidly crumbled while it continued to lose online gamers to rivals. Executives have pleaded for time to turn around the company, arguing to investors that greater fiscal discipline and execution would stabilize Zynga’s position, while its foray into casino-style gambling could pay off handsomely in the long run.

That thinking has changed in recent months within the company’s upper echelons, with Mark Pincus, a founder, and his replacement as chief executive, Don Mattrick, returning to Zynga’s roots with free social games like FarmVille, which catapulted the company to stardom in 2009.

“We need to get back to basics and take a longer-term view on our products and business, develop more efficient processes and tighten up execution all across the company,” Mr. Mattrick said in a statement.

Zynga reported $231 million in quarterly revenue on Thursday, a 31 percent drop from a year ago, as the struggling publisher continued to lose players.

Zynga said the number of active monthly players dropped to 187 million this quarter from 306 million a year ago, its lowest since mid-2010. The company, which has acknowledged fundamental problems with its business model, went public in December 2011 at $10 a share.

Excluding certain items, Zynga posted a loss of a penny a share, compared with a penny-a-share profit a year ago.

Zynga reported $188 million in bookings, which is a measure of the value of virtual goods bought by players during the three-month period that ended June 30. That is a 38 percent drop from $302 million a year earlier. 

Nokia shares hit after weak sales

 Nokia sold 7.4 million Lumia phones in the second quarter Nokia shares have tumbled 4% after the company released weak second quarter sales.
The mobile phone company reported sales of 5.69bn euros ($7.46bn, £4.92bn) for the three months to the end of June, down 24% on the same period last year.

The company sold 53.7 million mobile phones during the quarter, down 27% on last year.
Sales of its new Lumia phones, which run a Microsoft operating system, rose to 7.4 million in the second quarter.
Continue reading the main story

  Nokia's Stephen Elop celebrated a strong start for the Lumia 520, the budget phone in the range - but overall smartphone sales of 7.4 million units disappointed analysts.
Having poured huge sums into trying to crack the US market, sales of half a million phones in this quarter was a meagre return.

The one bright spot is that at least Nokia's smartphones outsold Blackberry in the last quarter - in the battle for third place behind Samsung and Apple they may be ahead.
Whether that will prove a profitable place to be is another matter.
That is a rise of 21% from the 6.1 million sold in the first quarter.
Nokia's chief executive, Stephen Elop said: "We are very proud of the recent creations by our Lumia team.
"During the third quarter, we expect that our new Lumia products will drive a significant part of our smart devices revenue."

However, that improvement has to be put into perspective, as Apple sold 37 million iPhones in the first three months of the year.

"Despite massive restructuring and a shift in platform, it still feels like Nokia is treading water compared to heavyweight smartphone makers Apple and Samsung who completely dominate the smartphone business," said Ben Wood, an analyst at research firm, CCS Insight.
The other problem for Nokia is that sales of non-smartphones, called feature phones, are also under pressure.

Nokia sold 53.7 million of them in the second quarter down 27% on 2012.
That market is being hit by cheap rival phones powered by Google's Android operating system.
Overall Nokia's losses narrowed to 278m euros, compared with a loss of 1.5bn euros in the same quarter last year.

'Surprisingly strong' Sales also fell at the operation that makes equipment for the mobile phone industry called Nokia Siemens Networks.

It saw a drop in revenue of 17% to 2.78bn euros, partly because Nokia sold some parts of the unit.
But some analysts think this business will provide important support in the future.
"Nokia Siemens Networks (NSN) was surprisingly strong. Looking at NSN's cash flow and results, the business seems to be a decent back-up plan for Nokia," said Hannu Rauhala, an analyst at the Finnish firm, Pohjola Markets.

Samsung shares fall despite increased sales

Samsung's sales may be up, but the mobile phone maker has failed to reach analyst estimates in its latest pre-earnings guidance.

The South Korean firm has predicted sales of 57tn won (£33bn) and operating profits of 5.5tn won for the second quarter of 2013, giving the markets a heads up on its results due on 26 July.

However, despite this showing a rise of over 4tn won in sales from the previous quarter, analysts had predicted operating profits of closer to 10tn won. By missing the mark, Samsung’s share price fell by almost 3% this morning – and around 17% since the beginning of June.

The fear is around its smartphone business, led by the Samsung Galaxy S4. Although sales are still expected to be strong, they are also expected to have slowed, with JPMorgan claiming the figure would be between 20% and 30% lower in 2013 than it had first predicted. This would lead to shipments of 60 million flagship handsets during 2013, rather than the previous 80 million figure that was touted.

This estimate was made in June following the launch of the lower-end, slimmed down version of the S4 – the Galaxy S4 Mini – which Samsung hoped could compete against its rivals, such as Apple, in emerging markets.

Instead, the announcement sent fears through its investors about lower profit margins and led to the firm having to meet with them in an attempt to quell fears.

During its last results call in April, where it announced overall profits were down from 56tn won to 52.87tn won sequentially, Samsung admitted it expected the market to stall.

“Looking ahead, Samsung anticipates smartphone sales to stay flat in the second quarter, but to pick up again in the second half of the year,” read a statement at the time. “As more mid- to low-end mobile devices enter the market and new premium products are rolled out, the race for market share will intensify.

“The company will strive to remain competitive amid difficult conditions by expanding the line-up of smartphones and tablets this year, starting with Galaxy Note 8.0 and the flagship Galaxy S4 smartphone.”

Rosneft may offer to buy out, or convert, TNK-BP shares

MOSCOW - Russian state oil major Rosneft said on Thursday it may offer to buy out minority shareholders in TNK-BP Holding or convert their stock into its own shares, but only at a lower valuation than at which it took over TNK-BP.

"We don't have any obligations. It would be a voluntary offer or, if a decision on a reorganization is taken, a conversion. We will see," Rosneft Vice President Igor Maidannik told reporters.

Maidannik, speaking after TNK-BP Holding's annual shareholders meeting, said he preferred the idea of a share swap, because buyouts "usually don't lead to the desired result".

His comments offered a glimmer of hope that minority shareholders who own about 5 percent of TNK-BP Holding, the listed unit of the Anglo-Russian venture bought by Rosneft for $55 billion, will not end up empty-handed.

Rosneft CEO Igor Sechin, a long-time ally of President Vladimir Putin, had previously rebuffed calls for a buyout or special dividend. Since the deal's announcement last October, TNK-BP Holding's shares have lost 57 percent of their value.

Maidannik, Rosneft's legal counsel, played down expectations that shareholders - which include several leading global emerging markets equity funds - could expect a big payout. TNK-BP shares rose by 3.75 percent Moscow trading.

"It has been obvious since the deal was announced that TNK-BP's capitalization would fall," said Maidannik. "Someone might have dreamed that a buyout could happen at the deal's price, but in my opinion that was a gamble."

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Lydia McLaughlin Shares New Details About Tamra Barney's Wedding

In a rare occurrence, the women of The Real Housewives of Orange County steered clear of the drama when they all got together for Tamra Barney's June 15 wedding to Eddie Judge. Costar Lydia McLaughlin -- who joined the series in its current eighth season -- spoke about the CUT Fitness owners' nuptials when she stopped by Us Weekly's New York City offices on Monday, June 17.

PHOTOS: Real Housewives' biggest fights ever

"It was actually so sweet because we all were there," McLaughlin said of costars Gretchen Rossi, Vicki Gunvalson, Heather Dubrow and even Barney's erstwhile foe, Alexis Bellino. "It was a real bonding moment for us."

'The Real Housewives of Orange County' at Tamra Barney's wedding to Eddie Judge.
Credit: Christine Bentley Photography

Barney, 45, recited her vows in an $8,900 hand-beaded Mark Zunino Haute Couture gown. "She looked like she could just be on top of a cake," McLaughlin said. "It was perfect." The 32-year-old Bravo reality star added, "Tamra had three wedding dresses, and they all were so different and unique."

PHOTOS: Stars' stunning wedding gowns

McLaughlin also praised costar Dubrow, who brought down the house when she sang "Come Rain or Come Shine" for 100 well-wishers at Dana Point, Califiornia's St. Regis Monarch Beach. "She has an amazing voice. It's very kind of sultry and deeper than I expected," she told Us. "She's so good. Way better than I could ever do!"

PHOTOS: Before they were Real Housewives

For more details on Barney's big day -- and for more on what went down during her bachelorette party in Mexico -- watch the video above now. The Real Housewives of Orange County's 100th episode airs Monday, June 24, at 8 p.m. EST on Bravo.

 

U.K. Spy Agency Secretly Taps Over 200 Fiber-Optic Cables, Shares Data With the NSA

The British spy agency GCHQ has secretly tapped more than 200 fiber-optic cables carrying phone and internet traffic and has been sharing data with the U.S. National Security Agency, according to a news report.

 

The spy operation, which included placing intercepts at the landing points of transatlantic undersea cables where they surface in the U.K., has allowed the Government Communications Headquarters (GCHQ) to become the top interceptor of phone and internet data in the world, according to the Guardian newspaper, which broke the story based on documents leaked by former NSA systems administrator Edward Snowden.

 

One part of the operation, codenamed Tempora, has been operating for about 18 months and allows the agency to tap large volumes of data siphoned from the cables and store it for up to 30 days for sifting and analyzing.

 

Each of the cables carries about 10 gigabits of data per second, which the paper likened to sending all of the information in all the books in the British Library through the cables 192 times every 24 hours.

 

Filters allow the agency to reduce the amount of traffic it records — one filter cuts out about 30 percent of traffic just by eliminating peer-to-peer downloads — while still collecting vast amounts of data that get sifted by analysts.

 

Some 850,000 NSA employees and U.S. private contractors with top secret clearance have access to GCHQ databases and as of May last year, at least 750 analysts from the U.K. and NSA were tasked specifically with sifting through the data, using more than 70,000 search terms related to security, terrorist activity and organized crime. Search terms focus on subjects, phone numbers and email addresses of interest.

 

The tapping was conducted in cooperation with commercial companies that own and operate the cables, the paper noted.

 

“There’s an overarching condition of the licensing of the companies that they have to co-operate in this,” an unnamed source told the paper. “Should they decline, we can compel them to do so. They have no choice.”

 

The tapping began as a trial in 2008 and within two years the GCHQ achieved top eavesdropper status among the nations known as the Five Eyes of electronic eavesdropping — U.S., U.K., Canada, Australia and New Zealand. GCHQ reportedly now “produces larger amounts of metadata than NSA” as a result of the program.

 

During a 2008 visit to the GCHQ’s listening station at Menwith Hill NSA Director Gen. Keith Alexander reportedly remarked: “Why can’t we collect all the signals all the time? Sounds like a good summer project for Menwith.”

 

The program has been justified for allowing the agencies to identify new techniques used by terrorists to thwart security checks, to uncover terrorist activities during the planning stages and to track child exploitation networks and aid in cybersecurity defenses against network attacks.