Thursday, August 3, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): Impressive earnings from industry leaders such as Barrick Gold
and Suncor Energy were not quite enough to lift Bay Street today. The Bank
of England unexpectedly raised rates for the first time in a year, sparking
inflation fears, and mixed retail sales reports in the U.S. and a flurry of
profit-taking in metals and energy kept the market flat. While Tropical
Storm Chris weakened and removed one potential problem, the markets still
await major employment stats tomorrow from both sides of the border and the
Fed rate decision next week.
* The S&P/TSX Stock Exchange Composite Index dropped 33.20 points, or
0.28%.
* Nortel Networks recovered money from an investor lawsuit settlement
that helped it post a profit of US $366 million, or US $0.08 per share, up
sharply from a loss of US $33 million, or US $0.01 per share, last year.
Much of the gain was attributed to a shareholder litigation award of US
$510 million. Its revenues also climbed 4.8% to US $2.74 billion in the
quarter, compared to US $2.62 billion last year.
* Barrick Gold, now the world's largest gold producer said its earnings
increased nearly tenfold, on high gold and copper prices and a shrewd
acquisition of rival Placer Dome. After last year's take of US $47 million,
or US $0.09 per share, its second-quarter profits were US $459 million, or
US $0.53 per share. Analysts had forecast US $0.51. Revenues shot up to US
$1.5 billion from US $463 million. Barrick is working on four new mines in
South America, Africa, and Australia, and has also launched bids for
NovaGold and Pioneer Metals Company.
* Suncor Energy credited higher oil sands production, higher prices and
lower Albertan taxes for profits of C $1.22 billion, or C $2.65 per share,
compared to last year's C $83 million, or C $0.18 per share. By 2008, it
plans to increase oil sands production to 350,000 barrels per day with a
third pair of cokers.
* Alcan might buy Falconbridge's aluminum smelters and assets (worth C
$1.3 billion) if Xstrata buys the Canadian metal miner and spins off the
aluminum division. Alcan is exploring its options for expansion,
particularly in China and Europe.
* Gildan Activewear, claiming a growing share of strong international
clothing markets, reported record sales and higher profits of US $42.8
million, or US $0.71 per share for the third quarter, up from US $42.1
million, or US $0.54 a share last year. It also increased its full-year
guidance to US $2.07 per share from US $2.
* Federal Trade Minister David Emerson is calling a meeting of two
dozen forestry CEOs next Wednesday in Toronto to try to salvage the
controversial softwood agreement with the U.S. Informed speculation says
that he will tell the leaders that the agreement is the best possible, and
if they reject it, the Tories will no longer try to help the industry.
* South of the border, U.S. retailers reported solid but very mixed
sales, with companies such as Costco, The Limited, Nordstorm, American
Eagle, and Wet Seal reporting gains while Pacific Sunwear and Starbucks
disappointed.
* Ford Motors revised its figures yesterday to admit it had actually
lost more than double it had previously reported in the second quarter. In
an SEC filing, it reported losses of US $254 million, or US $0.14 per
share, contrasted with the US $123 million, or US $0.07 a share, reported
last week. The recalculation was attributed to a surprise hike in pension
costs. The automaker also said that its luxury car division would probably
not turn a profit this year.
* Tropical Storm Chris weakened and started to disperse, veering away
from the Gulf of Mexico and ending any threat to oil installations.
Relieved, the market for crude edged down by US $0.35 to close at US
$75.46.
* Gold prices reflected the fall in crude, sliding US $7.10 to close at
US $650.50.
-- 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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