Wednesday, April 26, 2006, 4:15 PM EDT (Thomson Financial Corporate
Group): Canadian shares ended mixed, due to weakness in the energy patch,
and as investors digested a mixed batch of corporate reports.
* The S&P/Toronto Stock Exchange Composite Index dipped 8.06 points, or
0.07%.
* On the U.S. economic front, new home sales grew to a rate of 1.213
million in March from a revised 1.066 million in February, above
expectations for 1.115 million. Also, durable goods gained a whopping 6.1%
in March, versus a revised 3.4% the prior month, and compared with
projections for a 1.6% advance. Further, the Federal Reserve's Beige Book
observed "solid" or "moderate" economic growth in most districts in March
and April and that wages continued "to move up." While energy costs are
rising, companies' pricing power appeared limited, added the report.
* Turning to resources, energy shares dipped on weekly U.S. inventory
data showing a significant recovery in U.S. refinery operations and a
smaller-than- anticipated decline in gasoline inventories. Technical
factors, a soft dollar and interest rate concerns continued to prop up
metals, especially gold.
* In company news, EnCana posted a first-quarter profit of US$1.70 a
share, versus a year-ago loss of US$0.05 a share, and raised its dividend.
The firm is also mulling the spin-off of its oil sands unit once it hammers
out a deal with possible partners to process its planned 500,000 barrels a
day of bitumen output. The stock rose.
* In materials, Abitibi fell after its first-quarter loss of C$0.10 a
share was narrower than last year's C$0.13 a share, but wider than
expectations of C$0.07 a share. Separately, Nova Chemicals swung to a net
deficit from a year- ago profit of US$1.06 a share. Excluding items, income
of US$0.26 a share was inferior to projections of US$0.36 a share. Further,
Potash's first-quarter net profits dropped and its second-quarter outlook
was lower than expected. Nova and Potash fell. In the steel group, Ipsco's
first-quarter profits surged to US$3.12 a share from US$3.06 a share, and
its EPS outlook of US$2.60 to US$2.80 for the second quarter compared
favourably with expectations of US$2.67.
* In techs, CGI Group skidded after its second-quarter profits of
C$0.10 a share failed to meet expectations of C$0.12 a share. On a net
basis, the firm's income tanked to C$0.04 a share from last year's C$0.12 a
share. On the upside, Ballard Power's quarterly loss narrowed to US$0.15 a
share from last year's US$0.26 a share, beating estimates for a US$0.17 a
share deficit, due in part to higher sales. In U.S. techs, Sanmina,
Triquint Semiconductor and Corning pleased with their latest results.
* Elsewhere, in industrials, Allen-Vanguard jumped after pre-announcing
that its second-quarter revenue was up over 50% sequentially. In addition,
Toromont Industries' first-quarter profits soared to C$0.18 a share from
last year's C$0.13 a share, surpassing targets of C$0.15 a share. Also,
several analysts upped their views on Com Dev International after the firm
won approval to supply gear to a "major" European satellite manufacturer.
In analyst comments, Research Capital is particularly bullish on WestJet's
upcoming earnings report, citing robust load factors and strong pricing.
* On the downside, in financials, TSX Group slumped after announcing
that the firm is planning to swap its value-based trading fee structure for
a volume- based trading-fee model, a change that some feared would spook
investors. The firm warned that the change could "reduce trading and
related revenue by 12% to 15% on an annual basis if offsetting benefits [in
increased volumes] are not realized." Investors shrugged off news that the
firm's quarterly income swelled by 47% and topped estimates.
* In the consumer group, Maple Leaf Food's first-quarter profits
improved to C$0.14 a share from last year's C$0.10 a share, although sales
dropped 5%. The stock rose.
* In U.S. news of note, Amazon.com's results met forecasts, while
Boeing, Pepsico and Colgate-Palmolive surprised to the upside with their
earnings. Also, Merrill Lynch upped General Motors to "neutral" from
"sell."
-Beatrice.Denis@thomson.com; Thomson Financial Corporate Services
This is Thomson Financial Corporate Services Canadian Commentary, which
is updated twice daily. The information herein is believed to be true and
accurate, we take no responsibility for inaccurate information and reserve
the right to update our reports. For more financial information at your
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SOURCE Thomson Financial Corporate Group
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