Business Blog Posts

The Canadian company, facing rising competition for its smartphones and under pressure after a botched launch of its PlayBook tablet computer, shipped 13.2 million BlackBerrys in the three months to May 28.

It shipped 500,000 PlayBook tablets in the six weeks after the launch, exceeding the average analyst forecast of 366,000.

But it said the tough conditions that pushed it to warn on profits in April were likely to persist.

"Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter." co-Chief Executive Jim Balsillie said in the earnings statement.

RIM said it expects earnings in the current quarter of between 75 cents and $1.05, sharply lower than the already pessimistic average view of $1.40, on revenue between $4.2 billion and $4.8 billion.

It slashed its earnings outlook for the fiscal year to late March to between $4.25 and $6 a share, from $7.50 previously.

The Waterloo, Ontario-based company made a net profit of $695 million, or $1.33 a share, on revenue of $4.9 billion. Analysts had expected profit of $1.32 a share on revenue of $5.1 billion.

A year ago RIM earned $1.38 a share on revenue of $4.24 billion.

Shares of RIM -- which reported after the bell -- hit an almost five-year low in the session after the company said a senior executive had taken medical leave.

RIM shares fell more than 15 percent to $29.84 in trade after the closing bell in the United States.

(Reporting by Alastair Sharp)

The Commerce Department said housing starts rose 3.5 percent to a seasonally adjusted annual rate of 560,000 units, retracing almost half of April's steep decline. April's starts were revised up to a 541,000 unit pace, which was previously reported as a 523,000 unit rate.

Economists polled by Reuters had forecast housing starts rising to a 540,000-unit rate. Compared to May last year, residential construction was down 3.4 percent.

An oversupply of previously owned houses, especially foreclosed properties which sell well below their value, is dampening new home construction. A survey on Wednesday showed sentiment among home builders at its lowest in nine months in June.

Last month, there was an increase in groundbreaking for both multi and single family homes. Starts in the West were the highest since August.

Multi-family home starts rose 2.9 percent. The increase in the construction of multi-family units reflects a growing demand for rentals as relentless declines in house prices encourage Americans to delay home purchases and even give up properties whose mortgages are far higher than their values.

Single-family home construction, which accounts for a large portion of the market, rose 3.7 percent.

New building permits unexpectedly rebounded 8.7 percent to a 612,000-unit pace last month, the highest level since December. Economists had expected overall building permits in May to fall to a 558,000-unit pace.

Permits were boosted by a 23.2 percent surge in the multi-family segment. Permits to build single-family homes rose 2.5 percent. New home completions climbed 0.4 percent to 544,000 units in May. (Reporting by Lucia Mutikani, Editing by Andrea Ricci)

* Investors had their eyes on U.S. weekly jobless claims expected at 8:30 a.m. EDT. Economists expected claims to fall to 420,000 from 427,000 in the previous week.

* Housing starts and permits and the Philadelphia Federal Reserve Bank's business activity survey were also on tap.

* A day after the S&P 500 fell 1.74 percent, S&P 500 futures dropped 0.70 point and were flat in terms of fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures fell 14 points and Nasdaq 100 futures lost 2.50 points.

* A string of parliamentary resignations threw Greek Prime Minister George Papandreou's plan to reshuffle his cabinet and seek support for a crucial austerity package into disarray. The government risks bankruptcy if it fails to pass a highly unpopular five-year austerity plan.

* Chinese units of HSBC Holdings (HSBA.L)(HBC.N) and Citigroup Inc (C.N) won initial approval to underwrite corporate debt in China, sources said. The deals would make them the first foreign banks to win the coveted licenses.

* Research In Motion Ltd (RIM.TO)(RIMM.O) will have to struggle to give investors good news when it reports results after markets close on Thursday. Details on when new BlackBerry devices will hit shelves might help.

* U.S. stocks tumbled on Wednesday, driven lower by escalating worries over Greece, while troubling U.S. data pointed to further losses ahead.

* The CBOE Volatility Index .VIX jumped 16.8 percent to 21.32, its highest since March 18.

(Reporting by Rodrigo Campos; editing by Jeffrey Benkoe)

A total of 360,083 North American Citigroup credit card accounts were affected by the breach, the third-largest U.S. bank by assets said in a statement released late on Wednesday.

Of those affected, some 217,657 customers were reissued with new cards along with a notification letter, while the remaining accounts were either inactive or had already received new cards earlier, the bank added.

Citigroup had earlier said that about 1 percent of its North American accounts were affected. The bank's annual report puts the total number of its customers at 21 million.

"It is mainly due to the actual number of accounts being more than what's in the 2010 annual report as well as variances such as some of the accounts being closed," United States-based Citi spokesman Sean Kevelighan said in an emailed response.

Customers had their names, account numbers and contact information accessed, but Citi said that "data critical to commit fraud was not compromised" and that other consumer banking online systems were not accessed.

Citigroup also said it identified "the majority" of accounts compromised within seven days, adding that the information was accessed on the accounts by May 24 but that it only started notifying customers of the breach on June 3.

"What Citi should have done upon finding out is to call for a press conference to announce the news, reassure customers that they take this in utmost seriousness, and to personally reach out the affected accounts," said Li-May Chew, associate research director at IDC Financial Insights.

LUCRATIVE TARGETS

The bank is the latest in a growing list of companies to face cyber attacks in recent months, with Sony, Google Inc and Lockheed Martin all having suffered under hackers this year.

In response to the latest bout of attacks, many banks have stepped up their security effort, with two Australia-based banks -- ANZ and Westpac -- replacing their customers' "SecurID" electronic keys earlier this month.

"Cyber hackers are no longer interested in just stealing money directly," said Edison Yu, industry manager at consultancy Frost and Sullivan.

"They are more interested in stealing peripheral information such as contact details and ID numbers that can be sold on the black market later," Yu said, adding that the global black market for email addresses and national ID numbers is now worth about $5 billion, making it a lucrative area for hackers looking to steal contact information.

Regulators in many countries have also been preparing new measures on data security, with the head of the Federal Deposit Insurance Corp in the United States saying last week she may "ask some banks to strengthen their authentication when a customer logs onto online accounts."

The Hong Kong Monetary Authority also said it requires banks to have risk management systems to ensure the adequacy of their security systems.

"Banks are expected to continue to review their security measures in place to enhance the controls, where appropriate, on an ongoing basis," said an HKMA spokeswoman.

(Editing by Lincoln Feast and Muralikumar Anantharaman)

Greek Prime Minister George Papandreou said he will form a new cabinet on Thursday and seek a vote of confidence from his fractious Socialist party to push through a harsh austerity bill, as riot police battled tens of thousands of protesters in the heart of Athens.

Greece must pass the new campaign of tax rises and spending cuts to receive a new EU/IMF bailout and a 12 billion euro aid tranche that Athens needs to pay back debt that matures in August.

Euro zone officials, meanwhile, said a new three-year financing program for Greece may be delayed until next month due to differences over how to involve private investors.

The euro fell to $1.4154, lows not seen since May 27, before recovering a bit of ground to $1.4190, little changed from late Thursday levels, and finding support around its 100-day moving average.

A further test of the euro zone will come later in the day by way of a government bond auction in Spain, another country struggling with budget deficits, unemployment and social unrest.

Escalating tensions in the euro zone and data showing the U.S. economy is facing a troubling mix of weaker growth and higher prices triggered heavy selling on Wall Street, adding to pressure on Asian equity markets and other riskier assets on Thursday. .N

"We have got used to fairly disappointing data from the U.S., so I think today's fall is mostly prompted mostly by euro zone problems," said Takashi Ohba, a senior strategist at Okasan Securities.

In Japan, the Nikkei .N225 fell 1.1 0.9 percent, with growth-sensitive shares such Canon (7751.T) and Mazda Motor (7261.T) underperforming.

Other Asian markets also retreated, with the MSCI Asia ex-Japan index .MIAPJ0000PUS down 1.7 percent. Shares of materials and technology companies were among the weakest performers on fears of faltering global growth.

Hong Kong's Hang Seng Index .HSI fell through a key chart support at its March low, slumping 1.5 percent to its lowest level this year.

Foreign bearishness about Chinese equities, partly over corporate governance issues, have made investors increasingly cagey about the outlook for the Hang Seng with short-selling seeing a pick-up to levels last seen eight months ago.

In commodities markets, oil prices recovered in Asian trade after a more than 4 percent slide in the U.S. session as the rising dollar and signs of further economic weakness fed demand worries.

August Brent crude futures jumped $1.56, topping $114 a barrel, in the wake of a slightly recovering euro and a larger-than-expected draw in U.S. crude stocks.

Gold lost its footing on dollar strength.

Spot gold fell $3.32 an ounce to $1,526.5 an ounce after rising for a second straight session to around $1,533 on Wednesday as equity markets tumbled. Gold is well below a lifetime high around $1,575 touched in early May.

U.S. data later in the day includes housing starts, jobless claims and the Federal Reserve Bank of Philadelphia business outlook survey.

After a week of being pressured over its delayed disclosure of the data breach, the third largest U.S. bank by assets revealed more details in a statement late on Wednesday.

The breach, which Citigroup first made public on June 8, was initially detected on May 10.

A total of 360,083 North American Citigroup credit card accounts were affected by the breach, the bank said.

The bank said about 1 percent of North American card customers had been affected, reiterating comments made last week.

But the bank's annual report says that number of customers totals 21 million, which initially indicated that about 200,000, rather than over 360,000, customers had been affected.

Citigroup said it had reissued credit cards to 217,657 accounts along with a notification letter, Citi said.

(Reporting by Maria Aspan in New York; Editing by Lincoln Feast)