bombardier
Toronto symbols BBD.A and BBD.B, is the world’s third-largest maker of passenger aircraft, after Boeing and Airbus. It also makes passenger railcars.
ENCANA CORP., $28.26, Toronto symbol ECA, fell 7% this week after the company reported lower-than-expected earnings. In the three months ended September 30, 2010, Encana earned $98 million, or $0.13 a share (all amounts except share price in U.S. dollars). These figures exclude a $331-million gain on hedging contracts that the company uses to lock in selling prices for its natural gas, and a $140-million foreign-exchange gain. On this basis, the latest earnings fell well short of the consensus estimate of $0.19 a share. They were also down 74.1% from the company’s year-earlier earnings of $378 million, or $0.50 a share. Cash flow per share fell 9.4%, to $1.54 from $1.70. (Note: The year-earlier figures assume that the breakup of the old EnCana Corp. into the new Encana and Cenovus Energy Inc. took place at the start of 2009 instead of December 1, 2009.)...
BOMBARDIER INC. (Toronto symbols BBD.A $5.16 and BBD.B $5.18; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $8.8 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; SI Rating: Extra Risk) will launch a new, bigger version of its Global Express business jet in October 2010. This new plane will help it compete with rival Gulfstream, which has released a business jet that is 20% larger than Bombardier’s current model. The company will probably build a stretched version of its current plane, instead of designing a whole new model. That will keep its development costs down. Bombardier is a buy. The subordinate-voting “B” shares are the better choice, because of their slightly better liquidity and higher dividend yield....
POTASH CORP. OF SASKATCHEWAN, $145.00, Toronto symbol POT, has moved down from its recent peak of $160.65. That’s mostly because the Canadian government appears more likely to block or impose conditions on BHP Billiton Ltd.’s (New York symbol BHP) $130.00 U.S.-a-share takeover of Potash Corp. As well, Potash Corp. has launched a lawsuit to stop the takeover. The suit accuses BHP of making misleading statements about the potash industry to depress Potash Corp.’s share price prior to making its offer. Potash Corp. is still a hold....
BANK OF NOVA SCOTIA, $52.94, Toronto symbol BNS, earned $1.1 billion in the three months ended July 31, 2010. That’s up 14.1% from $931 million a year earlier. Earnings per share rose 12.6%, to $0.98 from $0.87, on more shares outstanding. Despite the gain, the latest earnings fell short of the consensus estimate of $1.00 a share. The bank set aside less money to cover bad loans because of the improving economy; that was the main reason for the higher earnings. In the latest quarter, loan-loss provisions fell 50.2%, to $276 million from $554 million a year earlier. Earnings at Bank of Nova Scotia’s Canadian banking division rose 21%, to a record $604 million, due to stronger demand for loans and wealth-management services. Earnings at the international-banking business rose just 2%, to $317 million, mostly because the higher Canadian dollar hurt their contribution. Without the negative impact of exchange rates, earnings at this business would have risen 11%. Earnings at the capital-markets division fell 35% to $305 million, as volatile stock markets and concerns over European sovereign debt hurt trading volumes....
PENGROWTH ENERGY TRUST, $9.76, Toronto symbol PGF.UN, has agreed to buy the 82% of Monterey Exploration Ltd. (Toronto symbol MXL) that it doesn’t already own. The deal should close in September 2010. Monterey produces oil and natural gas at properties in Alberta and British Columbia. Pengrowth is particularly interested in Monterey’s unconventional gas holdings in northeastern B.C. Monterey lacks the financial resources to develop these assets. That’s why it accepted Pengrowth’s offer. The trust will pay $366 million in units to take full control of Monterey. That includes $30 million of Monterey’s debt, which Pengrowth will assume....
BANK OF NOVA SCOTIA, $49.23, Toronto symbol BNS, rose 3% this week after the bank reported higher earnings and revenue in its latest quarter. In the three months ended April 30, 2010, Bank of Nova Scotia earned a record $1.1 billion, or $1.02 a share. That’s up 25.8% from $872 million, or $0.81 a share, a year earlier. The latest earnings also beat the consensus estimate of $0.91 a share. Revenue rose 7.7%, to $3.9 billion from $3.7 billion. Most of the earnings increase came from the Canadian retail-banking division, which supplies 45% of the bank’s total earnings. This division’s profits jumped 42.4%, mainly because low interest rates spurred demand for mortgages and personal loans....
CANADIAN TIRE CORP., $57.22, Toronto symbol CTC.A, rose 8% this week after the company reported better-than-expected earnings. In the three months ended April 3, 2010, Canadian Tire earned $49.4 million, or $0.61 a share. That’s down 0.6% from $49.7 million, or $0.61 a share, a year earlier. If you exclude unusual items, such as losses on property sales, earnings per share would have risen 3.3%, to $0.63 from $0.61. On that basis, the latest earnings beat the consensus estimate of $0.55 a share. Sales rose 4.1%, to $1.83 billion from $1.76 billion. Overall sales rose 2.1% at the company’s main retail division, which consists of its Canadian Tire stores and the PartSource auto-parts chain. The division’s same-store sales rose 1.7%. Warmer-than-normal spring weather pushed up demand for seasonal items, such as bicycles and patio furniture. That helped offset lower sales of winter merchandise, like snow blowers....
BOMBARDIER INC. (Toronto symbols BBD.A $5.40 and BBD.B $5.39, Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $9.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; SI Rating: Extra Risk) is the world’s third-largest commercial-aircraft maker, behind Boeing and Airbus. Its aerospace division supplies roughly half of its revenue. The other half comes from its transportation division, which is the world’s largest maker of passenger railcars and commuter trains. Bombardier’s revenue rose 33.4%, from $14.8 billion in 2006 (its fiscal year ends January 31) to $19.7 billion in 2009 (all amounts except share price and market cap in U.S. dollars). However, its 2010 revenue fell 1.8% to $19.4 billion. That’s because it received fewer aircraft orders. This decline more than offset stronger railcar sales....
BOMBARDIER INC., Toronto symbols BBD.A $5.87 and BBD.B $5.88, continues to win orders for new passenger railcars. This week, the company received an order for 49 additional railcars from France’s regional public-transit authority. That’s in addition to the transit authority’s previous order for 80 railcars. In all, the 129-car order is worth $1.6 billion (all amounts except share price in U.S. dollars). That’s equal to 8% of Bombardier’s annual revenue of $19.7 billion. The company will deliver these trains from June 2013 to mid-2016. As well, Bombardier has started building a new plant in China that will make fuselages for its new CSeries regional jets. The company is also building a new plant in Northern Ireland that will make the wings, and Bombardier will assemble the planes in Montreal. So far, Bombardier has 90 orders for the new plane, worth a total of roughly $7 billion. It will begin delivering the CSeries in 2013....
BANK OF NOVA SCOTIA, $49.49, Toronto symbol BNS, fell 2% this week, even though it reported better-than-expected quarterly earnings. In its first quarter, which ended January 31, 2010, the bank earned $988 million. That’s up 17.3% from $842 million a year earlier. Earnings per share rose 13.8%, to $0.91 from $0.80, on more shares outstanding. That beat the consensus earnings estimate of $0.88 a share. Most of the gains came from the bank’s Canadian retail-banking operations, where earnings rose 27.9%. That’s mainly because low interest rates continue to fuel strong demand for home mortgages and personal loans. As well, improving financial markets have made it easier for companies to issue new shares and debt securities. That pushed up earnings at the bank’s capital-markets division by 27.0%....