Wednesday, August 2, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): The resource-related and technology sectors led the way to a
rise in the TSX. Resources shot up on good results for Alcan and
Breakwater. Many American giants also weighed in with earnings, with mixed
results. On the downside, healthcare was dragged lower by Biovail, which
received an unfavourable court decision in the U.S. The oil markets
nervously watched the Gulf as Tropical Storm Chris strengthened.
* The S&P/TSX Stock Exchange Composite Index rose 62.21 points, or
0.52%.
* The world's second largest aluminum producer, Alcan, posted profits
so large that it was able to raise its quarterly dividend by 33%. Earnings
were C$455 million, or C$1.21 per share, up from last year's C$191 million,
or C$0.52 per share. Operating net income rose to C41.48 a share, and
analysts had been looking for C$1.39 a share. Shareholders will see a
dividend of C$0.20 per share, up from C$0.15 a share.
* Bell Canada's parent company, BCE, saw profits drop in the second
quarter by 15.5%, to C$476 million, or C$0.53 per share, compared to C$563
million, or C$0.61 per share, last year. However, the latest earnings
figure beat analyst expectation, on average. Blame was pinned on employee
benefit and pension plan costs, as well as redemption of debt for its
Aliant sector. Total revenues crept up 1% to C$4.8 billion.
* Canadian Natural Resources profits leapt up by more than a billion,
finishing at C$1.04 billion, or C$0.93 per share, a fivefold increase fed
by record production in North America, an increase in oil and natural gas
prices, and a large tax gain. By comparison, it posted C$219 million, or
C$0.41 a share, last year. The figure beat estimates of C$0.90 per share.
The company expects more proceeds as it completes the Horizon oilsands
project in northern Alberta.
* Another pipeline-based company, Enbridge, reported a jump in profit
of C$157.9 million from C$93.6 million last year. Analysts had forecast
C$0.31 per share, and instead received news of C$0.46 per diluted share.
The company credited higher energy prices, tax rate reductions, and
promises of increased future revenue from new pipelines, such as the
proposed Gateway from Alberta to Texas.
* Aurora Energy Resources gained as Sprott upgraded its price target
from C$5.70 to C$6.70 as the result of promising new discoveries and a
successful team-up with Michelin.
* Phelps Dodge plans to hike the cash portion of its bid for Inco by
C$6.75 billion, pending approval by its board, after rival Teck Cominco
sweetened its bid this week with an injection of C$2.7 in cash. Meanwhile,
Xstrata posted a 42% rise in first-half profits to US$1.13 billion, trying
to show that its C$24 billion bid was the best choice for Falconbridge
stockholders.
* Healthcare shares plummeted today, after Biovail received an
unfavorable U.S. court decision. The court granted that California's Anchen
Pharmaceuticals had not infringed on Biovail's rights in a Wellbutrin XL
patent infringement case. Anchen has obtained tentative approval from the
FDA for its generic version of Wellbutrin XL, which is Biovail's main
source of revenue. While the decision is not definitive, and the case will
move on to a full trial next month, the Canadian pharmaceutical giant is
already re- evaluating its financial outlook for next year.
* Breakwater Resources, a base metals miner, got a huge boost from
higher metal prices, earning C$29.5 million, compared to C$2.4 million at
the same time last year. Gross revenues rose by C$8.8 million to C$101.2
million in the second quarter.
* As the unrest in Lebanon continued, and Tropical Storm Chris verged
on becoming a Gulf hurricane, the U.S. weekly oil inventory showed a drop
of 1.8 million barrels in crude supplies. These worrisome factors riled the
market and helped push oil briefly past US$76, to settle at US$75.81, up
US$0.90.
* Gold went up US$5.30 to close at US$664.10. The yellow metal was
buoyed on high oil prices and also on anticipated earnings from colossal
miner Barrick Gold.
* South of the border, the market absorbed a flurry of earnings reports
from major players: Verizon profits fell 24%, with earnings of US$1.61
billion or US$0.55 per share, down from US$2.11 billion and US$0.75 per
share last year; its acquisition of MCI and resulting labour costs were
blamed. Excluding these factors, Verizon posted US$0.64 per share, beating
forecasts of US$0.62. The world's largest media company, Time Warner, beat
expectations of US$0.19 per share by one cent and posted a profit of US$1
billion, compared to a US$409 million loss last year, helping to lift the
Dow. Finally, Proctor & Gamble reported its fourth-quarter profit grew 36%
due to price increases, with revenues of US$1.9 billion compared to US$1.29
billion last year.
-- Carolyn.Crapo@contractor.Thomson.com; Thomson Financial Corporate
Services
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