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TSX Extends Gains Amid Mixed Earnings - Canadian Commentary

2/23/2012 11:36 AM ET

Toronto stocks were hovering in the green Thursday morning as traders shifted their focus to a mixed bag of earnings reports from major Canadian companies.

The S&P/TSX Composite Index added 22.59 points or 0.18 percent to 12,723.85, after gaining nearly 250 points or 2 percent in the past two sessions.

Latest data from the EIA revealed that U.S. crude oil inventories increased by 1.60 million barrels, while gasoline stocks were down by 600,000 barrels in the weekended February 17. Analysts were expecting crude oil inventories to jump 1.35 million barrels and gasoline stocks to add 250,000 barrels last week. Crude for April was down $0.31 to $105.97 a barrel.

In the oil patch, Pacific Rubiales Energy (PRE.TO) gained over 5 percent after announcing 2011 year-end reserves growth of 52 percent.

Oil and gas industry transportation services provider Mullen Group (MTL.TO) gained over 4 percent after reporting that its fourth-quarter net income rose to C$47.49 million from C$33.27 million in the same quarter last year. On a per share basis, net income was C$0.54, up from C$0.40 last year.

Junior oil and gas company Lundin Mining (LUN.TO) shed over 1 percent after reporting a sharp decline in its fourth quarter net income at $42.5 million or $0.07 per share versus $146.1 million or $0.25 per share last year.

The price of gold was extending gains as the U.S. dollar weakened on reports that the Federal Reserve will extend the Operation Twist stimulus program beyond June. Gold for April gained $15.00 to $1,786.30 an ounce.

Allied Nevada Gold (ANV.TO) and Goldcorp. (G.TO) moved up around 1 percent each.

Precious metals company NovaGold Resources Inc. (NG.TO) gained 1 percent after reporting full-year net loss of C$153.2 million or C$0.65 per share, narrower than last year's loss of C$203.5 million or C$0.95 per share.

Global gold miner Yamana Gold (YRI.TO) reported adjusted fourth quarter earnings of $184 million or $0.25 per share compared with $171 million or $0.23 per share in the same quarter of 2010 representing an increase of 8 percent. Analysts were expecting the company to report earnings of $0.24 per share this quarter. The company announced a 10 percent increase in its annual dividend to $0.22 per share and declared the first quarter dividend of $0.055 per share. The stock was up 4 percent.

Silver streaming company Pan American Silver (PAA.TO) moved up nearly 1 percent after it swung to profit in fourth quarter, reporting net earnings of $95.5 million or $0.89 per share versus a loss of $5.84 million or $0.06 per share in the prior-year quarter. On an adjusted basis, net earnings increased to $64.5 million or $0.61 per share from last year's $55.85 million, or $0.52 per share. Analysts were expecting the company to report earnings of $0.51 per share for the quarter. Further, the company declared dividend of $0.0375 per share.

Restaurants operator Tim Hortons Inc. (THI.TO) gained over 3 percent even after reporting a lower fourth quarter net income of C$102.95 million or C$0.65 per share compared to C$377.12 million or C$2.19 per share a year ago. Analysts were expecting the company to report earnings of $0.62 per share for the quarter. Separately, Tim Hortons said it plans to commence a new share repurchase program for up to C$200 million in common shares.

Pharmacy benefit management services, provider SXC Health Solutions (SXC.TO) rose nearly 8 percent after reporting improved fourth quarter net earnings of $26.7 million or $0.42 per share, compared to $ $16.6 million or $0.26 per share a year ago. The company's non-GAAP adjusted earnings per share of $0.48 came in line with the Street estimates.

Real estate investment trust Dundee REIT (D_UN.TO) edged up 0.20 percent after reporting that its adjusted funds from operations for the fourth quarter increased to $41.0 million or $0.62 per unit from $25.2 million or $0.55 per unit in the prior year quarter.

Meanwhile, food stores company Loblaw Companies (L.TO) dived 6 percent after reporting earnings that came in less than Street estimates. The company reported a fourth quarter profit of C$174 million or C$0.60 per share, up from the prior-year's C$165 million or C$0.58 per share. Analysts were expecting the company to report earnings of $0.66 per share for the quarter

Paper products company Cascades Inc. (CAS.TO) reported fourth-quarter profit of C$5 million or C$0.05 per share versus a loss of C$12 million or C$0.12 per share a year ago. Net loss per share excluding specific items was C$0.04 compared to a net earnings per share of C$0.17 in the same period of last year. The stock was down 2 percent.

In economic news from south of the border, the U.S. Labor Department said the seasonally adjusted level of new claims for unemployment came in at 351,000 for the week ended February 18, essentially unchanged from the previous week's revised figure of 351,000. Most economists had forecast an uptick in the low level of new jobless claims, predicting a level of 355,000.

From the euro zone, German business sentiment improved more than expected in February, according to a survey from the Munich-based Ifo institute. The confidence index rose to 109.6 from 108.3 a month ago. Economists had expected the index to climb to 108.8.

by RTT Staff Writer

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