Thursday, August 10, 2006, 4:15 PM EST (Thomson Financial Corporate
Services): A thwarted terrorist plot to destroy U.S.-bound U.K. planes
rippled through the markets as well as the airports of North America and
Europe today, making oil fall sharply and bringing down almost all other
sectors. The main bright spot was Research In Motion, which floated the
tech sector when it inked a deal with Apple to make its new BlackBerries
compatible with their new operating system's security. Canada's trade
surplus increased while the U.S. trade deficit eased slightly. As earnings
season wound down, two key cyclicals reported a loss, while Biovail
overcame legal troubles to deliver good news.
* The S&P/TSX Stock Exchange Composite Index fell 49.10 points, or
0.41%.
* Biovail reported a stronger second-quarter profit despite the
prospect of generic Wellbutrin on the horizon, earning C $80.6 million, or
C $0.50 per share, compared with C $3.7 million, or C $0.02 per share last
year, (which included some restructuring and other one-time expenses). This
exceeded expectations of C $0.46 per share, and Biovail was upbeat despite
the court decision last week favoring Anchen's sale of generic Wellbutrin.
Its revenue was up 17% to C $252.8 million.
* Turning to industrials, CAE rallied after the firm announced a profit
jump of 57%, posting C $32.7 million, or C $0.13 per share, up from C $20.8
million, or C $0.08 per share last year.
* Research In Motion lifted the tech sector largely by itself as it
made a deal to create BlackBerries compatible with a new Mac CRYPTO-server
6.4 technology. The technology was designed to protect Mac's latest
operating system, the OSX v. 10.4 Tiger.
* Shares of the Bank of Montreal dropped today as it reeled from a C
$110 million class action lawsuit alleging it charged high exchange fees to
convert foreign funds into Canadian dollars, after the change in the Income
Tax Act of 2001 that allowed investors to hold foreign currency without
charge. The suit was filed by a major investor in Ontario Superior Court.
* Soon after inking a major deal with the official Chinese pension
agency, Sun Life Financial President Jim Prieur abruptly resigned from the
insurance company and will be taking a position as CEO of U.S. insurer
Conseco, Inc. His successor has not been appointed.
* In cyclical sector earnings news, IMAX reported profits of C $3.5
million, up from C $1.1 million last year. However, shares plunged
dramatically since it also announced its five-month auction process did not
produce a buyer. The entertainment giant beat analyst estimates of C $0.07
per share with C $0.08 per share, up from C $0.04 last year. A rather
smaller loss was posted by the Four Seasons Hotel chain, which revealed a
slip to C $9.1 million for the second quarter from C $15.8 million a year
earlier. Total revenues were C $67.8 million, down from C $74.5 million
last year.
* The oil market dropped drastically as the plot to destroy U.S.-bound
airlines was uncovered, dragging down many sectors with it, as the travel
industry realized that a decline in plane travel and consumer sentiment
would mean a decline in fuel needed. Hitting its lowest level in nearly two
weeks, oil closed down US $2.35 to US $74.00 a barrel.
* After a brief rally in the morning in response to the terrorist plot,
gold closed down at US $641.90 as South Africa reported a decrease in gold
production by nearly 10%.
* On the economic front, Statistics Canada declared that the trade
surplus was up from C $4.1 billion in May to C $4.7 billion in June, the
second consecutive month of growth. The trade deficit with the U.S. fell
slightly. The forecast had been C $4.4 billion; industrial materials and
energy, as well as the high loonie, were credited.
* South of the border, the Commerce Dept. reported the U.S. trade
deficit fell slightly as record sales of mostly farm products offset
soaring oil prices, dipping 0.3% to US $64.8 billion in June, down from US
$64.97 in May.
-- 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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