Winnipeg Free Press

Winnipeg Free Press (Newspaper) - July 22, 2015, Winnipeg, Manitoba C M Y K PAGE B6 BUSINESS CITY EDITOR: SHANE MINKIN 204- 697- 7292 I CITY. DESK@ FREEPRESS. MB. CA I WINNIPEGFREEPRESS. COM WEDNESDAY, JULY 22, 2015 B 6 SAN FRANCISCO - Apple's stock slid sharply Tuesday after the company reported strong iPhone sales but remained coy about the performance of its new smartwatch. While not releasing specific figures for the Apple Watch, Apple reported total results for several products, including the watch, that suggest sales were lower than many Wall Street analysts expected. The company also issued a revenue forecast for the current quarter that suggested sales could fall below analysts' prior estimates. Apple's latest financial report shows the iPhone is still the key engine of the company's success. The California tech giant said it sold more than 47.5 million iPhones during the three months ending in June, or 35 per cent more than a year ago. Top executives stood by their decision not to disclose results for the Apple Watch, saying the information could be used by competitors. Many analysts and investors see the watch as an important indicator of the company's ability to produce successful new products. In one tantalizing clue, Apple reported US$ 2.6 billion in revenue from the segment that includes the watch and several other products, or about US$ 952 million more than the previous quarter, when the watch had not yet gone on sale. That's significantly less than the US$ 1.8 billion in watch sales analysts surveyed by FactSet were expecting. Apple's stock fell nearly six per cent in late trading, indicating investors weren't satisfied with the report. Apple also forecast revenue for the quarter ending in September will fall between US$ 49 billion and US$ 51 billion, indicating total sales could fall below Wall Street estimates of US$ 50.8 billion. Chief financial officer Luca Maestri told The Associated Press revenue from the watch amounted to " well over" that US$ 952- million increase. He said the category also includes revenue from iPods and accessories, whose sales fell in the quarter. " We beat our internal expectations" for the watch, Maestri said, adding the number of watches sold in the first nine weeks was greater than the number of iPhones or iPads the company sold in a comparable period after those products launched. Apple has previously said it sold one million iPhones in the first 74 days, or more than 10 weeks, after sales began in 2007. Apple has said it sold two million iPads in the first 60 days, with iPad sales hitting three million in 80 days after the iPad was launched in 2010. For the latest quarter, Apple said revenue from all sources grew 33 per cent from last year to US$ 49.6 billion in the April- June quarter, with the iPhone contributing US$ 31.4 billion in sales. Net income climbed nearly 38 per cent to US$ 10.7 billion, while earnings amounted to US$ 1.85 per share. That beat the estimates of Wall Street analysts surveyed by FactSet, who were expecting Apple to report earnings of US$ 1.81 per share on sales of US$ 49.25 billion. The iPhone's performance was especially notable because it's been nine months since Apple introduced its latest iPhone 6 and 6 Plus models. Consumer demand for new models usually wanes as time passes, but Apple's sales are continuing to grow faster than they did in a comparable period after the iPhone 5 went on the market in 2012. Apple got a big boost from new markets such as China, which contributed more than a quarter of the company's revenue, or US$ 13.2 billion. China sales more than doubled from a year ago. Analysts say the company is also benefiting from its decision to offer bigger screens with the iPhone 6 and 6 Plus, which is helping to lure consumers away from competing phone makers who started selling bigger- screen devices a few years earlier. - The Associated Press M ANITOBA'S biggest privately held company will never be accused of moving too quickly on Wynward Insurance Group. Ninety- five years after being one of 40 charter members of the Grain Insurance Guarantee Company - the precursor to Wynward - James Richardson & Sons Limited has acquired a 100 per cent stake in the Winnipeg- based firm. After slowly building up its shares in GIGC until it became the majority owner, Dave Finnbogason, vicepresident of corporate development at JRSL, said the time had come to consider going all in. So, it contacted the three other minority partners, Parrish & Heimbecker, Paterson Global Foods and Cargill Ltd., and they all agreed. " When you have four shareholders in there, it's a little blip on everybody's screen. We're already in the financial- services business," he said. GIGC was founded in 1920 as a joint venture of Prairie grain elevator owners who were having a dispute with their Eastern Canadian insurance company about their premiums. Ever the entrepreneurs, they decided to form their own company and selfinsure. The rebranding three years ago included coming up with a name. " Wyn" means " fair and reasonable" in Old English while " ward" means " guardian" or protector. " Our brand was hurting us in the market. People thought we ( sold) crop insurance," said Darryl Levy, its president and CEO. Today, Wynward has carved out a niche as a commercial insurance provider, but it doesn't do automotive or home insurance. " We're very specific and very surgical in our market. We're a business to serve other businesses," Levy said. " That can include a strip mall, a half- billion- dollar grain terminal and large office buildings to churches, pharmacies and well- known business franchises in Canada." " We have a very specialized market niche. We're not the Walmart of insurance. We're a specialist to insure other businesses in Canada." Over the last four years, Wynward has doubled its revenue to become a $ 100- million business, Levy said. " We price risk for a living. When we have someone come to us with an apartment building or shopping centre, we say, ' Here's the premium to pay for us to insure the risk from property damage or stoppage of business,' " he said. Wynward has regional offices in Regina, London and Halifax and 76 employees. It insures more than 34,000 policyholders and more than $ 40 billion in property assets across Canada. Its products are distributed through a network of 500 brokers across the country. " We like what has happened in the last four years. Many people thought it was a company that insured crops," Finnbogason said. " We're pretty excited about it. We can work more closely with ( Levy) and his team and plug them into JRSL. We think there's a lot of potential there." Finnbogason said it has asked Wynward to present both a one- year and longer- term plan - just as it asks every other company under its umbrella - and from there it will determine what kind of investment might be needed to allow the company to reach its maximum growth potential. " There's a lot of heavy lifting that needs to be done. Even without pumping more money into it, ( Wynward) has a nice organic growth trajectory," he said. JRSL has interests in the international grain trade and agri- food business, as well as energy, real estate and financial services. geoff. kirbyson@ freepress. mb. ca Waffling on watch swats Apple Stock declines amid lack of sales details By Brandon Bailey RUTH BONNEVILLE / WINNIPEG FREE PRESS Darryl Levy, president of Wynward, says the firm is an insurance specialist with a unique niche. LOS ANGELES - Microsoft booked a US$ 8.4- billion charge in the fourth quarter, swallowing a bitter pill by writing off the Nokia phone business it bought just over a year ago. It narrowly beat analysts' depressed expectations for a quarter that also saw a steep decline in personal computer sales even as it prepares to launch its latest operating system, Windows 10. The Redmond, Wash.,- based software giant posted a net loss of US$ 3.20 billion, or 40 cents per share, reversing a profit of $ 4.61 billion, or 55 cents per share, a year ago. Adjusted to exclude the charges, the company posted a quarterly profit of 62 cents per share, beating the average estimate of 15 analysts surveyed by Zacks Investment Research of 31 cents per share. The writedown was expected after CEO Satya Nadella announced 7,800 job cuts two weeks ago. The company will continue to make phones on a smaller scale. The difficult quarter comes ahead of the launch of Windows 10 on July 29, a free upgrade for users of Windows 7 or 8 for the next year. The company hopes better integrating its store into the revamped Start button and powering more Internet searches through Bing will compensate for the temporary dip in Windows revenue. In the quarter through June, Windows revenue fell 22 per cent, hurt by a decline in PC shipments researchers at IDC pegged at 11.8 per cent globally. The decline was exacerbated by a temporary bump last year when Microsoft ended support for Windows XP, which resulted in a one- time boost to Windows 7 sales. Offsetting some of the decline was its booming cloud computing business and positive contributions from Xbox, Surface tablets and Bing search ads, which gained more than a percentage point for a U. S. market share of 20.3 per cent. Phone hardware sales were worse than expected. - The Associated Press SAN FRANCISCO - Yahoo is still limping along as the Internet company prepares to shed the financial crutch that has been propping up its stock during the three- year reign of CEO Marissa Mayer. The latest evidence of the challenges facing Mayer emerged Tuesday with the release of Yahoo's second- quarter earnings report. Yahoo posted a loss of nearly $ 22 million, while its net revenue remained unchanged from the previous year at $ 1.04 billion. If not for the costs of employee stock compensation and one- time accounting items, Yahoo said it would have earned 16 cents per share. That figure was two cents per share below the average estimate among analysts polled by Zacks. Yahoo's stock fell 53 cents, or 1.5 per cent, to US$ 39.20 in extended trading after the numbers came out. The lack of net revenue growth is telling because it points to a financial malaise that has been dogging Yahoo for most of the past three years. Even though the volume of Internet advertising has been steadily rising during that stretch, Yahoo's revenue has been backpedalling while rivals such as Google Inc. and Facebook Inc. have been sprinting further ahead in the race for web surfers' attention and marketing dollars. For instance, Google's net revenue climbed by 13 per cent in the second quarter, while analysts anticipate Facebook will report a 37 per cent increase in revenue when it discloses its results next week. Mayer has been promising to engineer a turnaround since Yahoo Inc. hired her away from Google, but has made only grudging progress so far. - The Associated Press 95 years in the making Richardson goes all in on commercial insurance provider By Geoff Kirbyson Yahoo's revenue not growing JEFF CHIU / THE ASSOCIATED PRESS FILES Microsoft's latest quarterly numbers were slightly better than analysts' expectations. Microsoft's Nokia writeoff brings big loss ' We beat our internal expectations' - Apple CFO Luca Maestri on the Apple Watch B_ 06_ Jul- 22- 15_ FP_ 01. indd B6 7/ 21/ 15 8: 47: 23 PM ;