Author: Consultant

Bank of Nova Scotia BNS-T -0.61%decrease booked higher reserves for loans that could default even as a rise in first quarter profit beat analyst estimates.

Scotiabank earned $2.2-billion, or $1.68 per share, in the three months that ended Jan. 31. That compared with $1.76-billion, or $1.35 per share, in the same quarter last year.

Adjusted to exclude certain items, the bank said it earned $1.69 per share. That edged out the $1.61 per share analysts expected, according to Refinitiv.

In the quarter, Scotiabank set aside $962-million in provisions for credit losses – the funds banks set aside to cover loans that may default. That was higher than analysts anticipated, and included just $20-million against loans that are still being repaid, based on models that use economic forecasting to predict future losses. In the same quarter last year, Scotiabank set aside $638-millions in provisions.

“The Bank delivered solid earnings this quarter driven by strong revenue growth, margin expansion and expense discipline,” Scotiabank chief executive officer Scott Thomson said in a statement. “I am encouraged by the early progress against our strategic priorities, and the further strengthening of our balance sheet metrics.”

Scotiabank is the first major Canadian bank to report earnings for the fiscal quarter. Bank of Montreal is also releasing its financial results Tuesday morning. Royal Bank of Canada and National Bank of Canada will release their results on Wednesday and Toronto-Dominion Bank and Canadian Imperial Bank of Commerce will close out the week on Thursday.

Total revenue rose 6 per cent in the quarter to $8.4-billion as expenses also climbed 6 per cent to $4.7-billion.

Profit from Canadian banking was $1.1-billion, up 1 per cent from a year earlier as revenue rose on higher net interest margins. But loan balances were down 1 per cent year over year as mortgages slumped 5 per cent.

Profit from the bank’s international division was up 16 per cent to $746-million as a boost in revenue offset higher provisions for credit losses.

The global wealth management division generated $368-million of profit, down 4 per cent on higher mutual fund fees and lower expenses. And capital markets profit fell 15 per cent to $439-million as revenue slumped on lower net interest income.

Fertilizer giant Nutrien Ltd. says it sees promising signs of increased demand for potash in the year ahead.

The Saskatoon-based company says it expects full-year potash shipments of between 68 million to 71 million tonnes, up from the 67 million to 68 million it estimates went out in 2023.

Speaking on a conference call Thursday, company chief executive Ken Seitz says he was encouraged by the increased market stability in the second half of 2023.

He says prices have declined from historically elevated levels in 2022, but that the lower prices have resulted in improved demand in North America.

The company late Wednesday reported earnings of US$176 million for the fourth quarter of 2023, down 84 per cent from US$1.12 billion in the same period of 2022.

The company says its lower 2023 earnings reflect lower selling prices across all of its business segments, including potash prices that were down 55 per cent from a year earlier.

This report by The Canadian Press was first published Feb. 22, 2024.

Monday February 26

(8:30 a.m. ET) Canadian manufacturing sales for January.

(8:30 a.m. ET) Canadian wholesale trade for January.

(10 a.m. ET) U.S. new home sales for January. The Street is forecasting an annualized rate rise of 2.4 per cent.

(10:30 a.m. ET) U.S. Dallas Fed Manufacturing Activity survey for February.

Earnings include: Berkshire Hathaway Inc.; Cargojet Inc.; Emera Inc.; Ivanhoe Mines Ltd.; Secure Energy Services Inc.; Workday Inc.

—

Tuesday February 27

Japan CPI

Euro zone private sector credit

Germany consumer confidence

(8:30 a.m. ET) Canada’s Capital Expenditures Survey for 2024.

(8:30 a.m. ET) U.S. durable orders for January. Consensus is a decline of 4.8 per cent from December.

(8:30 a.m. ET) U.S. core orders for January. Consensus is a rise of 0.1 per cent from the previous month.

(9 a.m. ET) U.S. CoreLogic Case-Shiller Home Price Index (20 city) for December. The Street is estimating a rise of 0.2 per cent from November and up 6.1 per cent year-over-year.

(9 a.m. ET) U.S. FHFA House Price Index for December. Consensus is an increase of 0.3 per cent from November and 6.9 per cent year-over-year.

(10 a.m. ET) U.S. Conference Board Consumer Confidence Index. Consensus is a reading of 114.8, which is flat from January.

Earnings include: Bank of Montreal; Bank of Nova Scotia; Dell Technologies Inc.; Element Fleet Management Corp.; Lowe’s Companies Inc.; Ovintiv Inc.; Parkland Fuel Corp.; Topaz Energy Corp.; Tricon Capital Group Inc.

—

Wednesday February 28

Euro zone economic confidence

(8:30 a.m. ET) Canada’s current account balance for Q4.

(8:30 a.m. ET) U.S. real GDP for Q4. Consensus is an annualized rate rise of 3.2 per cent with the GDP deflator up 1.5 per cent.

(8:30 a.m. ET) U.S. goods trade deficit for January.

(8:30 a.m. ET) U.S. wholesale and retail inventories for January.

Also: G20 finance ministers and central bank governors meet in Sao Paulo, Brazil (through Thursday)

Earnings include: Capital Power Corp.; EQB Inc.; George Weston Ltd.; Granite REIT; Green Thumb Industries Inc.; Kinaxis Inc.; National Bank of Canada; Royal Bank of Canada; Salesforce Inc.; Spin Master Corp.; Stantec Inc.; Tamarack Valley Energy Ltd.; TJX Companies Inc.; Winpak Ltd.; WSP Global Inc.

—

Thursday February 29

Japan retail sales and industrial production

(8:30 a.m. ET) Canadian real GDP for Q4. The Street is forecasting an annualized rate rise of 1.0 per cent.

(8:30 a.m. ET) Canada’s monthly real GDP for December. Consensus is a month-over-month increase of 0.2 per cent.

(8:30 a.m. ET) U.S. initial jobless claims for week of Feb. 24. Estimate is 211,000, up 10,000 from the previous week.

(8:30 a.m. ET) U.S. personal spending and income for January. The Street expects increases of 0.2 per cent and 0.3 per cent, respectively, from December..

(8:30 a.m. ET) U.S. core PCE price index for January. Consensus is a rise of 0.4 per cent from December and 2.8 per cent year-over-year.

(9:45 a.m. ET) U.S. Chicago PMI for February.

(10 a.m. ET) U.S. pending home sales for January.

Also: Alberta and Nova Scotia budgets are released

Earnings include: Atco Ltd.; Athabasca Oil Corp.; Canadian Imperial Bank of Commerce; Canadian Natural Resources Ltd.; Canadian Utilities Ltd.; Crescent Point Energy Corp.; InterRent REIT; Laurentian Bank of Canada; MEG Energy Corp.; NuVista Energy Ltd.; Parex Resources Ltd.; Stella-Jones Inc.; Toronto-Dominion Bank

—

Friday March 1

Japan and China manufacturing PMI

Euro zone CPI and jobless rate

(9:30 a.m. ET) Canada’s S&P Global Manufacturing PMI for February.

(10 a.m. ET) U.S. ISM manufacturing PMI for February.

(10 a.m. ET) U.S. construction spending for January. Consensus is a month-over-month rise of 0.2 per cent.

(10 a.m. ET) U.S. University of Michigan consumer sentiment for February.

Also: Canadian and U.S. auto sales for February; U.S. Fed monetary policy report is expected

Earnings include: Boralex Inc.; Canadian Western Bank; NextGen Energy Ltd.; SNC-Lavalin Group Inc.

Published: 2/23/2024 3:17 PM ET | 

Despite tensions in the Red Sea due to attacks by Houthi militants near Yemen, crude oil futures settled sharply lower on Friday as concerns about the outlook for demand and the recent data showing a jump in U.S. crude inventories weighed on prices.

Data showing a contraction in the German economy and persisting worries about an economic slowdown in China raised concerns about oil demand.

Uncertainty about Federal Reserve’s interest-rate outlook also contributed to the drop in oil prices.

West Texas Intermediate Crude oil futures for April ended down $2.12 or about 2.65% at $76.49 a barrel.

Brent crude futures were down $1.91 or 2.28% at $81.76 a barrel a little while ago.

According to Baker Hughes, the oil rig count in the U.S. rose by six to 503 this week.

Meanwhile, ceasefire talks are underway in Paris, aiming to halt the conflict in Palestine and get Israeli and foreign hostages released.

Enerplus Corporation (“Enerplus”) (TSX:ERF.TO) (NYSE:ERF) today announced that its dividend will increase 8%, to US$0.065 per share, effective with the March 15, 2024 dividend, which is payable to all shareholders of record at the close of business on March 4, 2024. The ex-dividend date for this payment is March 1, 2024.

Read more at newswire.ca

Manulife Financial Corp. says it had a net income attributed to shareholders of $1.66 billion for the quarter ending Dec. 31, up 81 per cent from $915 million in the same quarter last year.

The insurance giant reported core earnings of $1.77 billion, or 0.92 cents per share in the quarter, up from $1.54 billion or 0.77 cents per share last year.

Manulife says core earnings exclude the impact of market swings and some other factors to give a better indication of the long-term potential of the business.

Results saw its Asia core earnings up 14 per cent to $414 million, Canada core earnings up 19 per cent to $352 million, and U.S. earnings up 16 per cent to US$349 million.

Global wealth and asset management had a 29 per cent increase in core earnings to $353 million, though unadjusted net income was down nine per cent to $365 million.

Earnings from the 2022 quarter are based on adjusted results following the shift to a new accounting standard.

This report by The Canadian Press was first published Feb. 14, 2024.

March Nymex natural gas (NGH24) on Friday closed -0.129 (-7.45%).

Nat-gas prices on Friday closed sharply lower as a shift in U.S. weather forecasts to warmer sent nat-gas prices tumbling.  The Commodity Weather Group said “strong warmth” is expected for the mid-western to the eastern parts of the U.S. from March 4-8, reducing heating demand for nat-gas and keeping supplies elevated.   U.S. nat-gas prices also had some negative carryover from a fall in European nat-gas prices Friday to a 2-3/4 year low.

Nat-gas prices have collapsed this year and posted a 3-1/2 year nearest-futures low on Tuesday as an unusually mild winter curbed heating consumption for nat-gas and pushed inventories well above average.

Nat-gas prices are also under pressure from the announcement by the Freeport LNG nat-gas export terminal in Texas on January 26 that it was forced to shut down one of its three production units for a month for repairs after extreme cold in Texas damaged equipment.  The closure of the unit will limit U.S. nat-gas exports and increase U.S. nat-gas inventories.

On Wednesday, nat-gas prices surged to a 1-week high after Chesapeake Energy Corp said it would cut its nat-gas production by about 20% this year due to market conditions.  Last month, Chesapeake Energy merged with Southwestern Energy to become the top U.S. nat-gas producer.

Lower-48 state dry gas production Friday was 102.4 bcf/day (+2.5% y/y), according to BNEF.  Lower-48 state gas demand Friday was 81.9 bcf/day (-11.9% y/y), according to BNEF.  LNG net flows to U.S. LNG export terminals Friday were 13.5 bcf/day (-3.6% w/w), according to BNEF.

The U.S. Climate Prediction Center said there is a greater than 55% chance the current El Nino weather pattern will remain strong in the Northern Hemisphere through March, keeping temperatures above average and weighing on nat-gas prices.  AccuWeather said El Nino will limit snowfall across Canada this season in addition to causing above-normal temperatures across North America.

An increase in U.S. electricity output is positive for nat-gas demand from utility providers.  The Edison Electric Institute reported Thursday that total U.S. electricity output in the week ended February 17 rose +1.8% y/y to 76,416 GWh (gigawatt hours), although cumulative U.S. electricity output in the 52-week period ending February 17 fell -0.2% y/y to 4,100,727 GWh.

Thursday’s weekly EIA report was bearish for nat-gas prices as nat-gas inventories for the week ended February 16 fell -60 bcf, close to expectations of -59 bcf but a much smaller draw than the five-year average for this time of year at -168 bcf.  As of February 16, nat-gas inventories were up +12.5% y/y and were +22.3% above their 5-year seasonal average, signaling ample nat-gas supplies.  In Europe, gas storage was 65% full as of February 19, above the 5-year seasonal average of 49% full for this time of year.

Baker Hughes reported Friday that the number of active U.S. nat-gas drilling rigs in the week ending February 23 fell by -1 rig to 120 rigs, moderately above the 2-year low of 113 rigs posted September 8.  Active rigs have fallen back since climbing to a 4-1/2 year high of 166 rigs in Sep 2022 from the pandemic-era record low of 68 rigs posted in July 2020 (data since 1987).

Commenting on the results, Eric J. Guerin, Chief Financial Officer, said, “We capped off the year with strong financial performance and a notable reduction in leverage, a testament to the Company’s sound strategy and execution.”

Fourth Quarter Financial Highlights¹²³:

• GTV increased 160% year-over-year to $4.0 billion, which includes $2.2 billion from the impact of the acquisition of IAA, Inc. (“IAA”).
• Total revenue increased 134% year-over-year to $1.0 billion, which includes $559.2 million from the impact of the acquisition of IAA.
  • Service revenue increased 197% year-over-year to $809.1 million, which includes $488.0 million from the impact of the acquisition of IAA.
  • Inventory sales revenue increased 35% year-over-year to $231.8 million, which includes $71.2 million from the impact of the acquisition of IAA.
• Net income available to common stockholders increased 65% year-over-year to $74.8 million.
• Diluted earnings per share available to common stockholders increased 2% to $0.41 per share.
• Diluted adjusted earnings per share available to common stockholders increased 21% year-over-year to $0.82 per share.
• Adjusted EBITDA increased 153% year-over-year to $307.5 million.

https://www.newswire.ca/news-releases/rb-global-reports-fourth-quarter-and-full-year-2023-results-894173204.html

TransAlta Corp.TA-T +3.83%increase reported a loss attributable to common shareholders of $84 million compared with a loss of $163 million a year earlier.

The power utility says the loss amounted to 27 cents per diluted share for the quarter ended Dec. 31 compared with a loss of 61 cents per diluted share a year earlier.

Free cash flow per share for the quarter amounted to 39 cents, down from $1.17 in the fourth quarter of 2022.

Revenue totalled $624 million, down from $854 million in the last three months of 2022.

Production for the quarter was 5,783 gigawatt hours compared with 6,005 gigawatt hours a year earlier.

In its outlook for 2024, TransAlta says it expects adjusted earnings before interest, taxes, depreciation and amortization of $1.15 billion to $1.30 billion for the year and free cash flow of $1.47 to $1.96 per share.