Bay Street Witnesses Another Solid Session

Bay Street Witnesses Another Solid Session Wednesday, January 26, 2005, 4:15 PM EST: (Thomson Financial Corporate Group): The Canadian market powered higher, as earnings season gets underway on Bay Street. Tech stocks rallied, aided by some upbeat earnings and forecasts south of the border. In domestic reports, Abitibi-Consolidated, Canadian National Railway, Domtar and Enbridge were amongst those firms posting quarterly results. Gold, industrial and staple stocks surged, while mining issues were notable lower. * The S&P/Toronto Stock Exchange Composite Index jumped 37.26 points, or 0.41%. * Gold shares and the yellow metal posted gains, as the greenback lost ground against the euro. In corporate reports, Barrick Gold Corp. said that it reached its 2004 gold production target and intends to increase output to between 5.4 million and 5.5 million ounces this year at an average total cash cost of US$220 to US$230 an ounce. Barrick also plans to increase output by 40% by 2007. Separately, Linear Gold Corp. tumbled, after that firm announced that it will sell 2.58 million stock-warrant units at C$7.75 each for gross proceeds of C$20 million. Elsewhere, proxy advisory firm Fairvest recommended that Goldcorp shareholders approve that firm's proposed acquisition of Wheaton River Minerals over Glamis Gold's bid. * In forest product and paper reports, Abitibi-Consolidated posted a wider fourth-quarter loss from a year earlier. Excluding a writedown and other non-recurring items, the firm posted a deficit of C$0.13 a share. Analysts expected a loss of C$0.10 a share, on average, as provided by Thomson First Call. Sales for the quarter rose to C$1.48 billion from C$1.37 billion last year. The firm also announced a review of its operations that will help it achieve C$175 million in cost, productivity and sales improvements. Abitibi is permanently closing its idled Sheldon, Texas, and Port-Alfred, Quebec, newsprint mills and examining four other "higher-cost" mills. * Also, Domtar narrowed its fourth-quarter net loss to C$0.11 a share, compared with C$1.01 a share last year. Excluding items, the firm's deficit was C$0.09 a share, below the mean Thomson First Call estimate for a profit of C$0.02 a share. The firm's net loss narrowed in 2004 from a year earlier, but widened in 2004 when unusual items where excluded. * Meanwhile, oil prices finished lower, amid mixed U.S. inventory data. The Energy Department said that crude inventories rose by 3.4 million barrels, while the American Petroleum Institute said that supplies declined. * Elsewhere in materials, Nova Chemicals swung to a fourth-quarter profit of US$1.78 a share, including tax gains and other items, versus last-year's loss of US$0.18 a share. Revenue leapt 47% to US$1.53 billion from US$1.04 billion. Separately, Inmet Mining said that 2005 production will not exceed 2004 levels of 770,000 tonnes, but should begin to improve in 2006. * Enbridge surged, after the firm said its 2005 net earnings target is C$3.20 to C$3.30 a share and free cash flow of C$368 million. The firm's fourth-quarter net income arrived at C$0.63 a share from C$0.16 a share a year earlier. Adjusted operating earnings were C$54.7 million, compared with last year's C$38.9 million. * Staple stocks leapt. CSFB upgraded Cott Inc. to "outperform" from "neutral," as the brokerage expects to see year-over-year gross margin improvement by the third-quarter 2005. * U.S. chip stocks boosted the tech sector. Texas Instruments posted a slightly lower profit from a year ago, but still landed ahead of the average Thomson First Call estimate. Revenue advanced 14% to US$3.15 billion. Also, Flextronics International announced sharply higher third-quarter earnings, as sales rose 3% to US$4.28 billion. Separately, Oracle said that it expects its fiscal 2006 earnings to jump over 20% above 2005 levels to US$0.76 to US$0.80 a share. * Within the industrial group, Canadian National Railway posted a 67% jump in its fourth-quarter earnings to C$1.29 a share from C$0.78 a share last year. The firm credited its acquisitions of Great Lakes Transportation and British Columbia Railway and a strong North American economy for the improved profit. The firm's most recent result also landed well ahead of the mean Thomson First Call estimate of C$1.18 a share. Looking ahead, Canadian National Railway is targeting 10% to 15% earnings growth for 2005. Subsequently, National Bank and Orion upgraded the stock. -- Linda.Shea@thomson.com; Thomson Financial Corporate Group This is Thomson Financial Corporate Group's Canadian Commentary, which is updated twice daily. The information herein is believed to be true and accurate, we take no responsibility for inaccurate information and reserve the right to update our reports. For more financial information at your fingertips, please visit http://www.irchannel.com/. If you have any questions please e-mail James Sang at james.sang@tfn.com or call 646.822.6233 For more information about Thomson Financial visit us on-line at http://www.thomsonfinancial.com/. PRNewswire -- Jan. 26 http://www.irchannel.com Source: Thomson Financial Corporate Group Web site: http://www.thomsonfinancial.com/ ------- Profile: International Entertainment