Friday, July 21, 2006, 4:15 PM ET (Thomson Financial Corporate
Services): Starting the day having digested the inflation messages from the
Fed, the TSX was flat as it absorbed conflicting and complex earnings
messages from tech giants. Gold dropped and oil inched up as a turbulent
week ended with no peace prospects in the Middle East. Canadian National
and Husky Energy had good news for investors, but it was offset by problems
for Imperial Oil, and only the financial and utilities sectors showed much
improvement in a market seemingly searching for a direction.
* The S&P/TSX Stock Exchange Composite Index fell 47.17 points, or
0.41%.
* The CPI slipped in June to 2.5%, according to Statistics Canada,
after three months of .5% increases and a 2.8% rate in May. Since another
2.8% had been forecast, analysts believe the Bank of Canada is following
the right course in holding interest rates steady. Core inflation rose to
1.7%, compared to May's 2%. The loonie dropped slightly on the news.
* The colossus Microsoft led a parade of American tech companies
announcing earnings today, posting a fall in profit to US$2.8 billion, or
US$0.28 per share, down from US$3.7 billion, or US$0.34 a share, last year.
Sales rose 16% to US$11.8 billion. The firm's earnings beat analyst
expectations, and shares rose on word it will buy US$40 billion worth of
its own shares and reward its investors, rather than concentrate its fight
with upstart Google. Google itself bedazzled investors with a
second-quarter profit of US$721.1 million that more than doubled and also
beat expectations. Another giant, Dell, was not as fortunate; blaming
"aggressive pricing in a slowing commercial market," the company warned in
a pre-earnings report that it expects second-quarter earnings will miss
estimates.
* Closer to home, business software firm Cognos reported a drop in
profits in its first quarter to US$14.5 million, or US$0.16 per share, from
US$20.4 million, or US$0.22 a share, last year. Revenues arrived at US$217
million. Estimates had been for revenues of US$216 million and earnings per
share of US$0.24. A favorable SEC ruling was credited with salvaging the
company after it plunged in May when the audit was announced.
* Xstrata might win Falconbridge after all, as Inco agreed to lift its
poison pill option by next month and Phelps Dodge stopped any support for a
rise of its bid. Teck Cominco's bidding position grew stronger, and Inco
CEO Scott Hand toured the country to try to persuade Falconbridge
shareholders that their future was brighter merging with the fellow
Canadian nickel mogul than taking Xstrata's all-cash offering.
* Imperial Oil shares dropped as it announced the delay of its
Mackenzie Pipeline completion until 2012, a year past its own deadline. The
pipeline would run natural gas from the Mackenzie Delta in Alberta to the
rest of the nation for the first time, but the National Energy Board now
says it is
extending the end of its mandatory review from November until April
2007, delaying the entire project.
* Much better news emerged from Husky Energy, with an announcement that
its Tucker oilsands project in northern Alberta would have its steam
start-up within a few days, and is expected to start pumping oil by the end
of the year. The firm also doubled its dividend.
* Canadian National Railway saw its profits rise 75% from the previous
year in its second quarter to C$729 million, or C$1.35 a share, up from
C$416 million, or C$0.75 per share, in the previous quarter. The increase
was attributed largely to a deferred income tax recovery and a higher fuel
surcharge.
-- Carolyn.Crapo@contractor.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
fingertips, please visit http://www.irchannel.com. If you have any questions
please e-mail James Sang at james.sang@tfn.com or call 646.822.6233. For
more information about Thomson Financial visit us on-line at
http://www.thomsonfinancial.com.
SOURCE Thomson Financial Corporate Group
back to top
