Category: Uncategorized

 Published: 10/26/2023 12:32 PM ET

Canadian stocks are turning in a mixed performance on Thursday with investors largely making cautious moves, digesting the latest batch of Canadian and U.S. economic data, and a slew of earnings updates.

Investors are also reacting to the European Central Bank’s interest rate decision, and its outlook for future monetary policy path.

The benchmark S&P/TSX Composite Index is down 98.77 points or 0.52% at 18,849.08 nearly half an hour past noon.

Technology and materials shares are weak. Utilities, financials and a few stocks from the real estate sector are faring well.

Celestica Inc (CLS.TO) is plunging 12.7%. Shopify Inc (SHOP.TO) is down by about 3%. Constellation Software (CSU.TO), Opex Text Corp (OTEX.TO), BlackBerry (BB.TO) and Docebo Inc (DCBO.TO) are down 1.4 to 3%.

Materials shares K92 Mining Inc (KNT.TO), Endeavour Silver Corp (EDR.TO), Seabridge Gold (SEA.TO), Oceanagold (OGC.TO), Agnico Eagle Mines (AEM.TO) and First Quantum Minerals (FM.TO) are down 3 to 4%. Eldorado Gold (ELD.TO) and Franco-Nevada (FNV.TO) are also sharply lower.

Utilities shares Boralex Inc (BLX.TO), Hydro One (H.TO), Transalta Corp (TA.TO), Fortis Inc (FTS.TO) and Algonquin Power and Utilities Corp (AQN.TO) are gaining 1.3 to 2.4%.

Canadian Utilities (CU.TO) is up more than 2%. The company reported third quarter 2023 adjusted earnings of $87 million ($0.32 per share), compared to $120 million ($0.45 per share) in the third quarter of 2022.

In the financials sector, Fairfax Financial Holdings (FFH.TO) is up 2%. Onex Corp (ONEX.TO), CDN Western Bank (CWB.TO), Bank of Montreal (BMO.TO) and Royal Bank of Canada (RY.TO) are up 1 to 1.6%.

FirstService Corporation (FSV.TO) reported consolidated revenues of $1.12 billion for the third-quarter, up 16% compared to the year-ago quarter. The stock is up 0.6%.

ATCO Ltd. (ATO.X.TO) reported third quarter 2023 adjusted earnings of $81 million ($0.71 per share), compared to $87 million ($0.76 per share) in the year-ago quarter. The stock is gaining about 1.3%.

Precision Drilling Corporation (PD.TO) reported third-quarter net earnings of $20 million or $1.45 per share compared to $31 million or $2.26 per share in the corresponding quarter last year. The stock is down by about 4%.

On the economic front, a report from the Canadian Federation of Independent Business showed Canada’s CFIB Business Barometer long-term optimism index fell for the second straight month to 47.2 in October 2023 from 48.7 in the prior month. It was the lowest reading since April 2020.

Data from Statistics Canada showed average weekly earnings of non-farm payroll employees in Canada remained unchanged at 4.2% year-on-year to $1,218 in August of 2023, after the July reading was revised down from 4.3%.

The Bank of Canada (BoC) may not have to raise its key overnight rate further if inflation cools in line with the central bank’s expectations, Governor Tiff Macklem said in an interview with the Canadian Broadcasting Corp.

“The economy is not overheated anymore and … we do think there’s more inflation relief in the pipeline, and if that comes through, we won’t have to raise rates further,” Macklem said in a CBC Radio interview aired on Thursday.

The BoC on Wednesday held its key overnight rate at a 22-year high of 5.0 per cent but left the door open to more hikes, saying price risks were on the rise and inflation could exceed its target for another two years.

The bank increased rates 10 times between March 2022 and this July, with inflation peaking at more than 8 per cent last year.

Most analysts do not expect another rate increase in this cycle, and money markets see only a 14 per cent chance of one when the BoC makes its next policy announcement on Dec. 6.

A Reuters poll of economists published on Friday showed that the majority do not see rates going higher, but they do see them staying at the current level for at least six months.

Macklem said the BoC would be looking for “clear evidence” inflation is heading toward the bank’s 2 per cent target before it would cut interest rates.

“If we can get inflation down, interest rates can come down from where they are. They’re probably not going back to where they were pre-COVID,” Macklem said on the CBC’s “The Current” morning radio show.

The BoC’s key overnight rate was 1.75 per cent at the start of 2020, before being rapidly slashed to 0.25 per cent when the pandemic hit.

West Fraser Timber Co. Ltd. says it earned US$159 million in the third quarter, compared with US$216 million a year earlier.

The Vancouver-based company says sales were US$1.7 billion, down from US$2.1 billion during the third quarter last year.

Earnings per diluted share were US$1.81, down from US$2.50 last year.

President and CEO Ray Ferris says the third quarter saw a continuation of challenging demand, especially in lumber.

As a result, Ferris says the company executed curtailments at several locations.

He says the company continues to focus on what it can control, such as improving flexibility and lowering costs.

This report by The Canadian Press was first published Oct. 25, 2023.

Companies in this story: (TSX:WFG)

Agnico Eagle Mines Ltd. (AEM) on Wednesday reported third-quarter earnings of $178.6 million.

On a per-share basis, the Toronto-based company said it had profit of 36 cents. Earnings, adjusted for non-recurring costs, were 44 cents per share.

The results exceeded Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of 43 cents per share.

The gold mining company posted revenue of $1.64 billion in the period.

Agnico shares have decreased 6% since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $48.81, a rise of 13% in the last 12 months.

Canadian Pacific Kansas City (TSX:CP.TO) (NYSE:CP) (CPKC) today announced its third-quarter results, including revenues of $3.3 billion, diluted earnings per share (“EPS”) of $0.84 and core adjusted combined diluted EPS^{1, 2} of $0.92.

Read more at newswire.ca

Teck Resources Ltd. raised the cost estimates for its QB2 copper project in Chile as it reported its latest quarterly results and lowered its production guidance for copper, molybdenum and steelmaking coal for the year.

The mining company says it now expects the QB2 project to cost between US$8.6 billion and $8.8 billion, up from earlier guidance for between US$8.0 billion and US$8.2 billion.

The update came as Teck says it earned a profit attributable to shareholders of C$276 million or 52 cents per diluted share for the quarter end Sept. 30 compared with a loss of C$195 million or 37 cents per share a year earlier.

Revenue totalled C$3.60 billion, down from C$4.26 billion in the same quarter last year.

On an adjusted basis, Teck says it earned 76 cents per diluted share, down from an adjusted profit of C$1.74 per diluted share a year earlier.

In its guidance, Teck lowered its annual copper production forecast to 320,000 to 365,000 tonnes from 330,000 to 375,000 tonnes for this year and cut its annual molybdenum production guidance to 3.0 million to 3.8 million pounds from 4.5 million to 6.8 million pounds. It also said it expects steelmaking coal production this year to be between 23.0 million and 23.5 million tonnes, down from earlier expectations for 24.0 million to 26.0 million tonnes.

This report by The Canadian Press was first published Oct. 24, 2023.

First Quantum Minerals Ltd. reported US$325 million in net earnings attributable to shareholders for the third quarter, up from US$113 million a year earlier.

Sales revenues totalled US$2.0 billion, up from US$1.7 billion.

Diluted earnings per share for the Toronto-based company were 47 cents US, up from 37 cents US a year earlier.

CEO Tristan Pascall says production continued to improve during the third quarter at each of the company’s three main copper operations.

Earlier in the year, First Quantum’s production took a hit amid a dispute with the Panama government over its Cobre Panamá copper mine.

On Monday, the company announced that the bill enacting its mining concession contract for the mine became law, after reaching a deal with the government in March.

This report by The Canadian Press was first published Oct. 24, 2023.

Canadian National Railway Co. is reporting a nearly one-quarter drop in profits for the three months ended Sept. 30.

Canada’s largest railway says falling consumer demand and fallout from the B.C. port workers’ strike dented its cargo volumes and revenue last quarter, alongside lower fuel surcharges.

The Montreal-based company says net income in its third quarter fell 24 per cent to $1.11 billion from $1.46 billion in the same period a year earlier.

CN says revenues decreased 12 per cent to $3.99 billion from $4.51 billion the year before.

On an adjusted basis, diluted earnings were down 21 per cent at $1.69 per share from $2.13 per share last year, slightly below analyst expectations of $1.72 per share, according to financial data firm Refinitiv.

CN says it continues to expect flat to slightly negative adjusted earnings this year, adding that it forecasts growth of between 10 per cent and 15 per cent between 2024 and 2026.

This report by The Canadian Press was first published Oct. 24, 202