In the three months ended September 30, 2011, Morgan earned $4.3 billion, down 3.5% from $4.4 billion a year earlier. However, earnings per share rose 1.0%, to $1.02 from $1.01, on fewer shares outstanding. If you exclude unusual items, such as costs to settle lawsuits related to subprime mortgages, Morgan would have earned $0.97 a share in the latest quarter.

Revenue fell 0.3%, to $23.76 billion from $23.82 billion. Loan-loss provisions fell 25.2%, to $2.4 billion from $3.2 billion. However, the latest figure is up from $1.8 billion in the second quarter of 2011.

The stock trades at just 7.4 times Morgan’s likely 2011 earnings of $4.59 a share. That low p/e ratio reflects slowing earnings at the company’s securities-trading operations, plus falling advisory fees as business clients focus on managing their current operations instead of pursuing acquisitions. The $1.00 dividend still seems safe, and yields 2.9%.

J.P. Morgan is still a hold.

In the quarter ended September 30, 2011, Wells Fargo earned $4.1 billion, up 21.4% from $3.3 billion a year earlier. Earnings per share rose 20.0%, to $0.72 from $0.60, on more shares outstanding. More clients are repaying their loans on time. As a result, loan-loss provisions fell 47.4%, to $1.8 billion from $3.4 billion. That was the main reason for the earnings increase.

Even so, revenue fell 6.0%, to $19.6 billion from $20.9 billion. That’s largely because Wells Fargo is getting less interest income from borrowers due to today’s low interest rates. As well, it has a smaller investment banking business than J.P. Morgan (see below), so it is more reliant on traditional lending.

Wells Fargo should earn $2.82 a share in 2011. It trades at 9.2 times that estimate. The $0.48 dividend yields 1.8%.

Wells Fargo is still a hold.

Loblaw now plans to open full-service mobile phone shops in up to 200 of its stores by the end of 2012. These shops will sell more sophisticated mobile products, such as smartphones and tablet computers, in addition to the basic phones that Loblaw currently carries. They will also offer mobile service plans from national wireless providers, like Bell and Telus.

The new shops should help Loblaw attract more customers to its supermarkets and increase its sales. The company aims to become Canada’s third-largest mobile phone seller by the end of 2013.

Loblaw is a buy.

The company did not reveal the cost of these upgrades. However, this technology should help Manitoba Telecom sell more smartphones, including the hugely popular Apple iPhone. That’s good news for the company, because it earns higher fees from these devices than regular cellphones.

Manitoba Telecom is a buy.

TRANSCANADA CORP. $41.86 (Toronto symbol TRP; Shares outstanding: 703.0 million; Market cap: $29.4 billion; TSINetwork Rating: Above Average; Dividend yield: 4.0%; www.transcanada.com) earned $0.59 a share in the latest quarter. That’s up 9.3% from $0.54 a share a year earlier.

Revenue rose 12.4%, to $2.4 billion from $2.1 billion, thanks to the start up of new pipelines and power plants. Higher electricity rates in Alberta also contributed to the revenue gain.

TransCanada is a buy.

POWER CORP. $24.49 (Toronto symbol POW; Shares outstanding: 460.7 million; Market cap: $11.3 billion; TSINetwork Rating: Above Average; Dividend yield: 4.7%) is a diversified holding company. It holds its financial assets through 66.1%-owned Power Financial.

Power Corp.’s financial assets include 68.4% of Great-West Lifeco, one of Canada’s largest life insurers, and 56.6% of IGM Financial, one of the country’s leading mutual-fund companies.

IGM reported that on September 30, 2011, it had $116.7 billion of assets under management, down 4.8% from $122.8 billion a year earlier.

The company’s clients sold more investments in response to the recent stock market volatility, and share prices were lower than a year ago; these were main reasons for the drop.

IGM’s fee income rises and falls with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings suffer when the value of these assets falls. Even so, low interest rates will probably spur investors to shift from fixed-income investments to equity-focused mutual funds over the next few months.

Power Corporation is a hold.

Revenue in the quarter rose 8.6%, to $7.6 billion from $7.0 billion, as cardholders increased their spending by 16%.

American Express is still a hold.

CAE continues to apply its simulator expertise to new fields, such as medical training. It recently bought Florida-based Medical Education Technologies, Inc. (METI), which makes medical simulators and other products, including life-like mannequins, for training paramedics and medical students.

Since 1996, METI has sold about 6,000 simulators to medical schools in 40 countries. This purchase will add $60 million U.S. to CAE’s annual revenue of $1.6 billion (Canadian).

CAE paid $130 million U.S. for METI. To finance this purchase, CAE sold $150 million U.S. of new long-term notes. On June 30, 2011, the company’s long-term debt was $533.3 million (Canadian), or 21% of its $2.5-billion market cap, so it has plenty of room to borrow more funds.

The company will probably earn $0.69 a share in its current fiscal year. The stock trades at a reasonable 14.0 times that estimate.

CAE is a buy.

The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels.

Torstar recently received $291.6 million from the sale of its 20% stake in CTVglobemedia to BCE Inc. (Toronto symbol BCE). CTVglobemedia owns CTV Television and other broadcasting businesses.

Torstar used most of this cash to pay off its long-term debt. It still has $137.3 million of loans due within one year. That’s equal to 19% of its market cap. However, it will likely take advantage of today’s low interest rates and convert some of these loans to long-term debt.

Thanks to its lower debt levels, Torstar’s interest costs fell 69.3% in the three months ended June 30, 2011, to $2.0 million from $6.6 million a year earlier. That helped push up its earnings by 25.7%, to $38.2 million, or $0.47 a share (excluding the gain on the CTVglobemedia sale). It earned $30.4 million, or $0.39 a share, a year earlier. The company’s revenue rose 4.2%, to $393.3 million from $377.6 million.

Earnings were flat at Torstar’s media operations, because savings from last year’s restructuring offset slow advertising sales at its newspapers.

Harlequin’s earnings fell 21.4%. However, that’s because this subsidiary is now selling more electronic books than printed books. As a result, retailers are returning more unsold printed books to Harlequin.

Torstar will probably earn $1.65 a share in 2011. The stock trades at just 5.4 times that figure.

Torstar is a buy.

Thomson Reuters recently said it plans to sell its healthcare business, which sells data and software that helps hospitals, clinics and health-care professionals cut costs and reduce fraud. In 2010, this division accounted for $450 million, or 3%, of the company’s revenue of $13.1 billion (all amounts except share price and market cap in U.S. dollars).

Thomson Reuters may use proceeds from the sale to make more acquisitions, particularly in developing markets, where demand for reliable information is growing quickly.

For example, in May 2011 the company bought Mastersaf, a Brazilian firm whose software helps businesses comply with increasingly complex tax and accounting laws. In all, Thomson Reuters spent $733 million buying other related companies in the first half of 2011.

These acquisitions are part of the reason why the company’s revenue rose 7.2% in the quarter ended June 30, 2011, to $3.4 billion from $3.2 billion a year earlier. Earnings rose 26.5%, to $429 million, or $0.51 a share, from $339 million, or $0.41.

These earnings exclude one-time costs related to Thomson Corp.’s 2008 merger with the U.K.-based Reuters news agency. To date, the the merger has let the company cut its annual costs by $1.54 billion, mainly by closing overlapping operations. It expects to reach its goal of $1.7 billion in annual savings when it finishes integrating Reuters by the end of 2011.

Thomson Reuters is in a good position to make more acquisitions. Its long-term debt of $7.0 billion is a manageable 29% of its market cap. It holds cash of $713 million, or $0.85 a share.

Investors are concerned that the European debt crisis and the weak U.S. economy will prompt the company’s biggest clients to cut spending on information products. That fear has hurt the stock, and it now trades at 14.1 times the $2.02 U.S. a share that the company will probably earn in 2011. That’s a reasonable p/e ratio in light of Thomson Reuters’ long-term earnings prospects.

Thomson Reuters is a buy.

Canada Bread’s sales rose from $1.3 billion in 2006 to $1.7 billion in 2008. The gain largely came from bakeries the company bought in the U.K. and U.S. However, sales fell to $1.6 billion in 2010, mainly due to unfavourable exchange rates.

Before unusual items, the company’s earnings per share rose from $3.09 in 2006 to $3.31 in 2007. Its 2008 earnings fell to $2.87 a share, but rebounded to $3.20 in 2009. The lower 2010 sales pushed down its 2010 earnings to $2.85 a share.

A big part of Maple Leaf’s restructuring is Canada Bread’s plan to build a new, $100-million bakery in Hamilton, Ontario. This plant, which opened in September 2011, is Canada’s largest bakery. The new plant also let Canada Bread close three outdated Toronto facilities.

In addition to making Canada Bread more efficient, this new bakery will help it launch new products. For example, it recently started selling a new line of breads, called Dempster’s Country Originals, that have no artificial preservatives, artificial colours, artificial flavours or high-fructose corn syrup. These products will help Canada Bread take advantage of rising demand for healthier food.

Low liquidity a risk factor

The stock trades at 13.0 times the $3.30 a share that Canada Bread will likely earn this year. The $0.80 dividend yields 1.9%. However, Maple Leaf’s large stake in the company hurts its liquidity.

Canada Bread is a hold.

The company also makes fresh and frozen bread, pastries and pasta through its 90.0% stake in Canada Bread Co. Ltd., which supplies 30% of Maple Leaf’s revenue. The remaining 5% comes from its agribusiness division, which raises hogs for the company’s processed-meat operations. This division also recycles animal by-products into other materials, such as soaps and biodiesel fuel.

In 2006, Maple Leaf began to shift its focus to more-profitable processed foods, and cut back its fresh pork production. It also sold its animal-feed business and most of its fresh-meat operations.

Still recovering from listeriosis crisis

As a result of this shift, Maple Leaf’s sales fell from $5.3 billion in 2006 to $5.21 billion in 2007. Sales crept up to $5.24 billion in 2008, despite a listeriosis outbreak at its Toronto meat-processing plant. Thanks to Maple Leaf’s quick response to this crisis, sales fell only slightly in 2009, to $5.22 billion. In 2010, sales fell to $5.0 billion, because it sold a pork-processing plant in Ontario.

Maple Leaf’s losses ballooned from $20 million, or $0.16 a share, in 2006 to $37 million, or $0.29 a share, in 2008, largely due to costs related to the listeriosis outbreak. Maple Leaf earned $52 million, or $0.40 a share, in 2009, but its earnings fell 50.0% to $26 million, or $0.19 a share, in 2010. Excluding unusual items, earnings per share rose 33.3%, from $0.57 in 2009 to $0.76 in 2010.

In addition to building new plants, Maple Leaf’s restructuring involves simplifying its product lines and focusing on its most profitable foods. (Right now it makes over 4,000 types of prepared meats.) This will also cut its packaging costs. As well, the company is installing a new computer system that will give its managers more timely information, and help them make better decisions.

In all, Maple Leaf plans to spend $757 million on its restructuring. However, it expects the plan to increase its gross margin (gross profits as a percentage of sales) from 7.3% in 2010 to 9.5% in 2012. It aims to raise this to 12.5% when it completes its restructuring in 2015.

Maple Leaf is borrowing the money it needs to complete its restructuring. That’s why its long-term debt rose from $389.1 million at the end of 2010 to $746.2 million on June 30, 2011. That’s a high, but still manageable, 47% of its market cap.

The company should earn $1.01 a share in 2011. The stock trades at 10.9 times that estimate. The $0.16 dividend yields 1.5%.

Maple Leaf Foods is a buy.