CANADA STOCKS-Energy shares lift TSX onto firmer ground

Thu Apr 26, 2012 4:42pm EDT
 
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* TSX ends up 34.79 points, or 0.3 percent, at 12,145.85
    * Weak earnings from Goldcorp, Potash weigh

    By Claire Sibonney	
    TORONTO, April 26 (Reuters) - Toronto's main stock index
ended moderately higher o n T hursday as stronger energy prices
lifted oil and natural gas companies, though gains were capped
by weak materials shares, hit by disappointing earnings.	
    The powerhouse energy sector climbed 1.5 percent, despite
the first stream of earnings in the group mostly missing
expectations. 	
    Encana Corp advanced nearly 6 percent to C$19.44 a
day after reporting a rise in first-quarter profits. It
benefited from its hedging program as gas prices slumped to
10-year lows, while its price target was upgraded on Thursday.
 	
    MEG Energy, a Canadian oil sands developer, surged
8.6 percent to C$41.97 after reporting an 18 percent rise in
first-quarter profits on lower costs and higher price
realizations. 	
    "You have oil up ... natural gas has popped 10 percent in
the past week or so, so outside influences are more of an impact
than the specific company reports unless in the case of Potash
Corp for instance where it's a significant miss," said Levente
Mady, market strategist at Union Securities, in Vancouver. 	
    Potash Corp of Saskatchewan, the world's largest
fertilizer maker, was in fact one of the heaviest decliners on
the index. It dropped 3.2 percent to C$42.25 after reporting a
33 percent profit drop due to lower sales and production, which
in turn led to higher costs. 	
    Goldcorp, which reported late on Wednesday, led the
key names on the downside.	
    Canada's No.2 gold miner plunged 6 percent to C$38.05 after
announced a slim increase in operating profit as its most
prolific mine was hit by operational problems that reduced
output and offset most of the gains from a surge in bullion
prices. 	
    "Obviously the materials and natural resources have been
struggling mightily, especially on a relative basis," added
Mady, citing the TSX's poor performance compared with rallying
U.S. markets.	
    The Toronto Stock Exchange's S&P/TSX composite index
 ended up 34.79 points, or 0.29 percent, at 12,145.85.	
    Paul Taylor, chief investment officer at BMO Harris Private
Banking and BMO Asset Management, was modestly optimistic about
the Canadian earnings picture and its impact on the market,
expecting earnings over the next 12 months to be up in the high
single digits.	
    "If your view is as ours is, that we get a little bit of
firming on the commodity front, the banks are doing the right
thing in terms of expense management, I think that that
trajectory of six to eight percent earnings growth year over
year is very doable," said Taylor.	
    In other earnings and individual company news, Shoppers Drug
Mart Corp lost 0.8 percent to C$42 after Canada's
biggest pharmacy chain reported lackluster profit and sales
growth, feeling the squeeze from government reforms that have
cut prescription drug margins. 	
    Precision Drilling Corp's, Canada's top oil and gas
driller, dropped 2.6 percent to C$9.37 after reporting quarterly
profit that narrowly missed analysts' expectations.
 	
    On the upside, Research in Motion was up 3.6
percent to C$13.90 after value investor Prem Watsa said that the
BlackBerry maker is a good buy at current levels, though it may
take four to five years to turn around.