Market awaits RIM results

Analysts are keeping their expectations low for Research In Motion's quarterly earnings this afternoon, noting RIM's international sales have been slowing and it will likely be months before consumers can get the new breed of BlackBerry.

RIM will release its fourth-quarter earnings after markets close at 4 p.m. ET with new CEO Thorsten Heins delivering the financial report, his first as the chief executive of the company based in Waterloo, Ont.

Heins took over from co-CEOs Jim Balsillie and Mike Lazaridis in late January amid shareholder unrest over the company's weak stock price and strategic direction.

Once a global leader in smartphone technology, RIM has been losing marketshare to Apple's iPhone and to smartphones with Google's Android operating system, especially Samsung phones.

The Canadian tech company isn't expected to release its BlackBerry 10 — the next-generation with a new operating system based on what's in RIM's PlayBook tablet computer — until later this year.

UBS analyst Phillip Huang says he expects another tough quarter for RIM, estimating the will have shipped 11.5 million smartphones and 375,000 PlayBook tablets in its fiscal fourth quarter.

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Cooling housing market forecast by Royal LePage

One of Canada's largest real estate companies expects home prices to increase by less than the inflation rate in 2012.

In its quarterly forecast, Royal LePage says it expects the average home price in Canada to increase by 2.8 per cent by the end of 2012.

That's less than Canada's current inflation rate, which came in at 2.9 per cent in November, the most recent month for which Statistics Canada data is available.

The company says home prices increased by between 3.6 and 6.1 per cent in the fourth quarter of 2011 compared with a year ago.

The latest data from the Canadian Real Estate Association shows the average price of a home sold in November across the country was $360,396, a 4.6 per cent increase over the same month a year earlier. Though a strong rise historically, it pales in comparison to some of the gains seen in recent years.

In the immediate aftermath of the recession in 2008-09, Canadian home prices rose by double digit percentages in most markets. But over the last five years, Royal LePage noted on Thursday, average home prices have grown by only 3.5 per cent compounded annually, well below the long-term average rate of appreciation.

Predictions of a housing market correction became more prevalent through 2011, but the market proved resilient as low interest rates and a comparatively stable economy spurred demand for all housing types. Royal LePage said it doesn't expect a national price correction until 2013 at the earliest

"In the recovery period following the 2008-09 recession, I found myself repeatedly speaking of 'irrational exuberance' in the Canadian housing market," Royal LePage president Phil Soper said. "Expectations were too high and the pace of expansion unsupportable."

"With this report, I find myself in exactly the opposite position. Widespread calls for a major real estate correction in 2012 simply can’t be justified," he said.

The report says Royal LePage expects to see cities with commodity-based economies, such as Calgary, Regina and Winnipeg, out-perform larger urban centres such as Toronto and Vancouver this year.

Calgary’s average house prices are forecast to climb 3.6 per cent in 2012. In 2011, the largest average price increase occurred in Regina, where average prices for standard two-storey homes rose 19.5 per cent year over year.

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RIM denies leaving tablet market

Shares in BlackBerry maker Research In Motion slumped Thursday, despite the firm's denial of a report that it had halted production of its PlayBook tablet computer and cancelled additional tablet projects.

"Any suggestion that the BlackBerry PlayBook is being discontinued is pure fiction," RIM spokesperson Marisa Conway told CBC News.

"RIM remains highly committed to the tablet market."

RIM shares closed down 70 cents, or 3.1 per cent, at $21.97 on the Toronto Stock Exchange.

RIM described any suggestion that it was discontinuing its BlackBerry PlayBook as ‘pure fiction.’ Mike Cassese/Reuters

They have lost 69 per cent of their value since reaching their 52-week high in February.

"We believe RIM has stopped production of its PlayBook and is actively considering exiting the tablet market," John Vihn, an analyst with Collins Stewart, wrote in a commentary.

Vihn’s report came a week after Quanta Computer, a Taiwanese contract manufacturer for RIM, laid off about 1,000 workers at a factory that produces the PlayBook, among other products. It did not comment on whether the cuts came at the RIM production line.

It followed by one day Amazon's announcement of new competition for the PlayBook, unveiling its new Fire tablet, and amid continuing stiff competition from Apple's iPad and iPad2.

RIM shipped only about 200,000 PlayBooks in its most recent quarter, about half of what analysts had been expecting and below RIM's own expectations.

But the company's senior executives told analysts that RIM was preparing to roll out a major new version of the PlayBook's operating system, with details to be revealed at a developer conference in mid-October.

Some Canadian retailers have slashed the prices of the PlayBook as the company is expected to bring out a new version of the tablet computer's operating system.

Best Buy, Future Shop and Staples cut the price of all three versions of the PlayBook by $100.

It started retailing in April with list prices at $499, $599 and $699 depending on the model, which had between 16 GB and 64 GB of memory.

At the same time, RIM announced another of its executives is resigning.

Tyler Lessard, the senior vice-president for global alliances and developer relations, "is moving on to pursue other interests," RIM said in a statement.

A director of developer relations, Mike Kirkup, resigned in August and RIM's marketing chief, Keith Pardy, departed in March, followed later by two others in the marketing area. Chief operating officer Don Morrison left in July after taking a medical leave.

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CMHC results show changing housing market

New mortgage rules implemented this past spring have stemmed the flow of new buyers and put a chill on refinancing activity, the agency that insures Canada's housing market says.

The Canada Mortgage and Housing Corporation issued its second quarter results on Monday, and the numbers paint a picture of a housing market in flux.

In March, Finance Minister Jim Flaherty unveiled the latest round of tweaks to Canadian mortgage rules designed to make it harder for Canadians to bite off more debt than they can withstand.

Lenders typically require mortgage insurance for loans made to anyone who wants to buy a home with a down payment of less than 20 per cent of the purchase price. And the Canadian Bank Act prohibits most federally regulated lending institutions from insuring more than 80 per cent of the value of a home. Some do, but the CMHC is the ultimate backstopper of most highly-leveraged home loans.

The two main rule changes implemented in March were a reduction of the maximum amortization time to 30 years from 35, and a reduction in the maximum amount a homeowner is allowed to refinance — to 85 per cent of the value of the home, down from 90.

By the end of June, the impacts of those rules were already being felt, with the CMHC seeing an instant 10 per cent reduction in the number of mortgage insurance applications. That figure rebounded somewhat, but by the end of June, it was still five per cent below the level it was prior to the changes.

The move to 30-year amortizations was expected to somewhat reduce the number of new buyers. But the refinancing change has had a much more significant impact.

At the end of June, refinancings were down by 40 per cent, CMHC said Monday.

The agency has only recently started posting its quarterly results, because of changes to Ottawa's Financial Administration Act, which were laid out at the same time as the new mortgage rules came into play.

Despite the slowdown in new applicants, the total value of CMHC's loan portfolio was $536 billion at the end of June, a 9 per cent increase from $490 billion at the same point last year.

The CMHC has made it almost impossible to get a mortgage of more than 30 years, but it's interesting to note that the average amortization period actually crept slightly higher in the first six months of the year. The average CMHC-insured mortgage had an amortization period of 24.6 years at the end of June; it was 23.9 during the same period in 2010.

And the average outstanding loan amount on a Canadian mortgage was $158,894 at the end of June, CMHC says.

The agency saw little change in the number of people falling behind on their mortgage payments. CMHC views any home loan more than 90 days late on payment as being in arrears, and the mortgage arrears rate was steady at 0.4 per cent of all homeowners at the end of June.

That figure has remained steady since May 2010, the CMHC said.

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