Tuesday, August 1, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): As Wall Street wilted in the heat of a sizzling summer and in
the face of renewed inflation fears, the TSX stayed up, as favourable
earnings reports and higher prices for the yellow metal and crude lifted
the resources indices. Algoma Steel and Rogers Communications exceeded
expectations, while investors were disappointed by Molson Coors and Domtar.
* The S&P/TSX Stock Exchange Composite Index leapt 76.69 points, or
0.65%.
* Teck Cominco sweetened its bid for Falconbridge-less Inco to C$16.7
billion in cash and stock, still about C$3 lower per share than Phelps
Dodge's bid but with a larger percentage in cash, as the consolidation of
the Canadian mining sector continued. Teck Cominco CEO Don Lindsay
remarked, 'I don't think there's anything like this going on in the
world...and it's getting more complicated.''
* Canadian Oil Sands Trust extended its C$13.10 per share bid for
Canada Southern from a deadline of today until August 18th. Hostile bidder
Canadian Superior upped its cash-and-stock bid to include a royalty trust
for Canada Southern for its Arctic holdings.
* Algoma Steel reported a second-quarter profit of C$79.2 million, up
from C$64.7 million last year, crediting lowered income taxes and increased
commodity prices. Its net income amounted to C$2.06 per share, smashing
analysts' forecasts of C$1.14.
* Molson Coors, hit by higher commodity and energy costs, enjoyed a
healthy profit but missed its forecasts, posting earnings of US$1.42 per
share, nine cents less than estimates. Net earnings were US$156.2 million,
or US$1.81 per share, up from US$38.5 million, or US$0.45 per share a year
earlier. Its Carling brand sold well in Europe during the World Cup.
* Forest products company Domtar dropped, with a second-quarter loss of
C$9 million, or C$0.04 a share, compared to a profit of C$2 million last
year, or C$0.01 a share, last year and below expectations of C$0.03. Sales
fell to C$1.16 billion from C$1.27 billion. Like much of the lumber
industry, the company blames the new softwood lumber negotiations and the
strong loonie for its problems.
* Rogers Communications' shares leapt up as they announced
second-quarter profits of C$277.5 million, or C$0.88 per share, with
revenues of C$2.24 billion, exceeding forecasts of C$0.29 per share and
C$2.19 billion. Canada's largest cable company attributed the favorable
news largely to the recent acquisition of telephone company Call-Net
Enterprises.
* Building on yesterday's flat GDP report, Statistics Canada released
regional growth figures revealing that while it expects the overall economy
to grow about 3.1%, the resource-rich Western provinces and Newfoundland
will see exceptional growth, perhaps of 6.6% and 4.6% (by 2007)
respectively. However, assuming oil remains above US$65 a barrel, the
Alberta boom will continue when the Newfoundland one has started to run
down.
* In the U.S., the Commerce Department said the core personal
consumption expenditure price index increased 0.2% for the third straight
month in June, and has risen 2.4% in the past 12 months. Personal incomes
rose 0.6% in June, outpacing a 0.4% increase in consumer spending. Both
figures were in line with analysts' forecasts. Meanwhile, the Institute of
Supply Management said factory activity increased unexpectedly in July. The
headline manufacturing index last month stood at 54.7%, up from 53.8% in
June. Economists were expecting a reading of just 53.6%. In addition, the
Commerce Department said construction spending rose 0.3% in June. The
expectation had been for a gain of 0.1%.
* UAL, the parent of United Airlines, America's second largest carrier,
announced its first profit in six years. After coming out of bankruptcy in
February, the airline saw its revenue grow 16% in the second-quarter,
rising to US$5.11 billion and US$0.93 per share from $4.42 billion a year
ago, despite a 31% hike in fuel costs. The revenues also beat analyst
expectations.
* Gold shot up US$12 to close at US$658.80, as Israel resumed
incursions into Lebanon.
* Crude oil went up US$0.51 to close at US$74.91, as a major oil
pipeline was sabotaged in northern Iraq.
-- 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
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SOURCE Thomson Financial Corporate Group
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