Nexen earnings fall 86% October 28, 2009
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Calgary-based oil and gas producer Nexen Inc. reported an 86 per cent drop in third-quarter profit Wednesday.
It attributed the drop to lower production, downtime for maintenance and reduced sales volume.
Maintenance downtime cut into production from Nexen’s Long Lake oil sands project.(CBC)
Net income came in at $122 million or 23 cents a share for the three months ending in September. That compared with $886 million or $1.68 a share in the same period a year earlier.
Nexen operates an oilsands project called Long Lake and explores, and produces oil in the North Sea, the Gulf of Mexico, Yemen and West Africa.
Nexen shares closed down 59 cents, or more than two per cent, at $23.40 on the Toronto Stock Exchange Wednesday.
U.S. durable goods orders fall unexpectedly September 27, 2009
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Orders for U.S. durable goods dropped unexpectedly in August from the month earlier.
The Commerce Department said Friday that orders for durable goods fell 2.4 per cent, after increasing by 4.8 per cent in July, mostly because of a drop in demand for commercial aircraft.
It was the worst number since January and raised concerns that the recovery in American manufacturing will be longer than hoped. Weaker demand for air travel has forced airlines to delay ordering new planes.
Durable goods orders fell in August, mainly on decreased demand for commercial aircraft.(The Boeing Co.)
However, when the more volatile category of transportation goods was excluded, the rate was flat.
Millan Mulraine, economics strategist with TD Securities, said in a commentary that he was “somewhat encouraged by the more modest decline in core goods orders” and that the three-month annualized trend in core orders remains “quite encouraging” as it has risen from 14.7 per cent to 19.2 per cent.
Mulraine was encouraged by growth in three categories: orders for primary metals rose 1.9 per cent from July, machinery was up 0.7 per cent and fabricated metals orders gained 0.8 per cent.
“These are the basic building blocks for an eventual economic recovery,” Mulraine said.
Durable goods are ones that are expected to last at least three years. They are more expensive and the rate of purchases is watched closely as a sign of consumer and business confidence.
With files from The Associated Press (more…)
Potash Corp. shares fall on lower profit outlook September 22, 2009
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Shares in Potash Corp. fell Monday after the Saskatoon, Sask.-based company lowered its profit forecast for 2009.
The company, the world’s largest potash producer, said late on Sept. 18 that it expected demand from farmers for its fertilizer to slow, lowering earnings to between $3.25 to $3.75 US a share. Potash Corp. reports in U.S. dollars.
World demand for fertilizer is expected to fall this year.(CBC)
The company’s previous forecast had been for a profit of $4 to $5 a share. The company also reduced its forecast for global potash industry sales in 2010 to a range of between 50 and 55 million metric tonnes. It had predicted 55 to 60 million in July.
The company’s shares fell $4.05 ? or 4.2 per cent ? to $93.09 US on the New York Stock Exchange, although it regained a little of that in after-hours trading. The price of Potash stock has gained 27 per cent this year.
Potash Corp., 3-month chart
Shares of Mosaic Co., North America?s second-largest fertilizer producer, lost $2.84 US, or 5.2 per cent, to close at $51.41 in New York. Calgary-based Agrium Inc., the third-largest in North America, dropped $1.57 Canadian, or 2.7 per cent, to $55.67 in Toronto trading.
Industrial product prices fall 0.5% in July August 28, 2009
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Falling oil and coal prices drove Canada’s Industrial Product Price Index down 0.5 per cent in July, reversing the 0.5 per cent increase registered in June, Statistics Canada reported Friday.
The index is down seven per cent from the peak reached in August 2008.
Lower oil prices also dragged the Raw Materials Price Index down by 3.8 per cent in July following increases of 6.2 per cent in June and 2.2 per cent in May.
Oil and coal prices fell 5.2 per cent in July after three consecutive monthly increases, including a jump of 10.8 per cent in June.
The Industrial Product Price Index reflects the prices that producers in Canada receive as their goods leave the plant gate and does not include costs such as indirect taxes and transportation. The Raw Materials Price Index reflects the prices paid by manufacturers for key raw materials, many of which are set on world markets, and includes goods that are not produced in Canada.
Excluding oil and coal, the industrial price index was unchanged after declining for three consecutive months. Lower prices for fruit, vegetables, feed products, motor vehicles and other transport equipment were offset by higher prices for lumber and other wood products, as well as primary metal products.
The materials price index has fallen 34.4 per cent since July 2008, the largest year-over-year decline since the index was created in 1977. The decline is mainly attributable to a 49 per cent drop in the price of mineral fuels.
Asian markets fall as investors leery of recovery prospects May 24, 2009
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Asian stocks wilted Friday as the possibility of credit rating downgrades for major economies and bleak unemployment figures in the U.S. added to fears the recent massive rally was built on shifting sands.
After piling into battered markets over the past two months, running up gains of 30 per cent or more from Asia to the U.S., investors are increasingly hard pressed to justify hopes that a global economic recovery is around the corner.
In the U.S. and Europe overnight, markets were unnerved by a credit agency’s warning about the British government’s debt ratings. The threat of a downgrade could signal similar problems for the United States and other big economies staggering under a growing mountain of debt as they try to spend their way out of recession.
An employment report from the world’s biggest economy was equally dispiriting. Though the number of newly laid-off workers seeking unemployment benefits in the U.S. fell 12,000 to 631,000 last week, continuing claims rose to 6.7 million — hitting a new record for the 16th consecutive week in data going back to 1967.
‘No consensus’
The unrelenting bad news and recent losses on Wall Street were leading many investors to reassess their expectations about the economy and the recent rally, analysts said.
“It seems the markets are at a crossroads. What were seeing today is a lot of confusion,” said Kirby Daley, senior strategist at Newedge Group in Hong Kong. “The markets here are trying to digest what is truly happening in the U.S. and trying to balance that with Asia.”
“There is no consensus view right now, and that’s leaving investors confused,” he said.
In Tokyo, Japan’s Nikkei 225 stock average gave up early gains to drop 38.84 points, or 0.4 per cent, to 9,225.81, while Hong Kong’s Hang Seng index was off 241.83, or 1.4 per cent, at 16,957.74. Elsewhere, South Korea’s Kospi slipped 1.3 per cent and Australia’s benchmark was down 1.4 per cent.
Among the few gainers, Taiwan rose 0.3 per cent and Malaysia’s index rose 0.5 per cent.
Stocks in Tokyo were also pressured by a strong yen, which hurts profits of the country’s brand name exporters.
Toyota Motor Corp., the world’s No. 1 automaker, dropped 2.2 per cent, Sony Corp. shed 2.0 per cent and Japan’s top chipmaker Toshiba Corp. fell 1.2 per cent.
British rating cut?
The far-reaching consequences of the global recession were underlined Thursday by Standard & Poor’s warning that Britain’s credit rating may be cut because of rising debt. That would raise the cost of borrowing for the British government, which is taking a big role in bailing out that country’s stricken banks, and could mean similar warnings for other debt-laden governments.
Analysts said the S&P warning shows there are limits to how much debt governments can take on even when it’s part of efforts to revive staggering economies. And even after governments pumping hundreds of billions of dollars into economies around the world there are still questions about how soon a rebound might take hold.
Those fears and weak data reined in Wall Street on Thursday.
The Dow fell 129.91, or 1.5 per cent, to 8,292.13, after earlier falling as much as 201 points. The Standard & Poor’s 500 index fell 15.14, or 1.7 per cent, to 888.33, and the Nasdaq composite index fell 32.59, or 1.9 per cent, to 1,695.25.
Stock futures pointed to modest gains Friday in the U.S. Dow futures rose 20, or 0.2 per cent, to 8,315 and S&P futures were steady at 888.70.
In oil, crude stayed above $61 US a barrel in Asia. Benchmark crude for July delivery was up 48 cents to $61.53 a barrel midday in Singapore in electronic trading on the New York Mercantile Exchange.
Trade surplus tops $1B in March, but imports, exports fall May 12, 2009
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A drop in imports that exceeded the decline in Canada’s exports pushed the country’s overall trade surplus to $1.1 billion in March, Statistics Canada said Tuesday.
The surplus grew from $262 million in February.
Imports in March fell 4.4 per cent to $31.4 billion, with energy products showing the largest decline, followed by machinery and equipment.
Imports have fallen by more than $8 billion since hitting a peak in July 2008, mainly because of declines in energy and automotive products.
Exports declined by 1.8 per cent to $32.5 billion, as shipments to the United States fell.
TD Bank economist James Marple said that with so much of the Canadian economy dependent on trade, the March trade data paints a bleak picture of the state of the economy at the beginning of this year.
“The decline in imports, particularly of machinery and equipment, [which were off 42.6 per cent on an annualized basis in the first quarter], points to a steep fall in capital and inventory investment in the quarter,” he said.
“While nascent signs of life are starting to emerge in the U.S., it could be several more quarters before we see a return to positive growth in the Canadian economy,” Marple said.
Canada’s trade surplus with the United States remained at $3.6 billion in March, virtually unchanged from February.
Ont. Teachers’ Pension Plan sees assets fall more than $21B April 3, 2009
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The Ontario Teachers’ Pension Plan saw its assets retreat to $87.4 billion at the end of 2008 from $108.5 billion a year earlier as the fund was battered by losses on equities and fixed income.
OTPP said its investment return for 2008 was ?18 per cent, and underperformed the fund’s benchmark return of ?9.6 per cent.
“Our investment team fought hard against the downward pressure of the global credit freeze and subsequent stock, bond and real estate market crashes throughout the year; but market forces retained the upper hand at year-end,” said Jim Leech, the fund’s president and CEO.
“It is small consolation to us that our results are consistent with the average of other large Canadian pension plans,” he said.
Last year, the fund lost $12.5 billion on its equity investments, largely due to the slide in global stock market.
In fixed income, the fund dropped $6.7 billion in losses on credit products and hedge funds.
OTPP did turn a positive return of $200 million on infrastructure assets and real-return bonds.
New home permits fall 17 per cent in January March 8, 2009
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The value of home building permits in Canada fell close to 20 per cent in January, according to figures released Thursday, the worst showing in the residential sector since the global credit crunch began in late August.
Statistics Canada said residential contractors only took out $2.2-billion worth of permits to build new single and multi-unit residential dwellings. That amount ? which is an early indicator of activity in the sector ? represented a drop of 17.5 per cent, or approximately $400 million, compared with December 2008.
“Ontario accounted for most of the decline at the national level, although seven provinces reported a decrease. Saskatchewan, Nova Scotia and British Columbia were the only provinces showing increases,” said Statistics Canada in a news release.
January’s double-digit decline also was a precipitous drop in home building interest compared to the previous five months.
Residential building permits have declined since August when the worldwide financial crisis really accelerated, but only at an average of 6.3 per cent.
Residential building permits % increase
January ‘09 -17.5
December ‘08 -3.2
November ‘08 -9.0
October ‘08 -7.8
Source: Statistics Canada
Worse still, you need to go back to July to find the last month in which builders actually increased the value of permit requests in Canada’s residential sector.
Home owners in Canada and the United States have been less interested in buying new homes as the economy in both countries soured.
A report by CIBC Economics released earlier this week calculated that mortgage credit in Canada is now growing at about 50 per cent of the pace it did in the middle of 2008.
“There are clear signs that the household credit market is slowing at an accelerating pace,” said CIBC economist Benjamin Tal in the study.
Overall drop
In overall terms, the value of new buildings permits, which also includes business and institutional construction, fell by 4.6 per cent in January across Canada.
But on the non-residential side, permit valuations rose by 12.3 per cent to $2.3 billion.
Interestingly, Ontario led the increase in January with non-residential building permits up 75 per cent to $1.2 billion. That showing represented the first increase since September when the province’s business and institutional construction permits cracked the $1-billion level.
Because the value of a single building in this sector can run into the millions of dollars, however, permit swings in the business and institutional sector are common.
Oil prices rise, then fall on global tension January 5, 2009
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Oil prices rose and then fell in morning trading Monday as analysts shifted views on which global hot spot would affect commodity markets more in the coming months.
Oil prices popped by $1.15 US a barrel to $47.45 in early market action as commodity watchers assessed the Israel-Gaza conflict, the Ukrainian natural gas dispute with Russia and recent tension in Nigeria as factors that would reduce crude supplies.
Quickly, however, the U.S. dollar began to rise Monday as traders viewed the same factors as reasons to dump the ruble and other non-North American currencies, and buy the American greenback.
That sentiment eventually drove down oil prices by $1.66. Thus, by mid-morning, a barrel of oil for February delivery had lost 51 cents, slipping to $45.83.
Still, analysts feel that swirling international tension will result in a short-term rise in the commodity’s price.
“With Israeli troops going into Gaza, that just heightens fears of the possibility of a wider Middle East conflict,” said Ken Hasegawa, an energy analyst with broker Newedge in Tokyo.
“Prices will likely continue to rise in the short term.”
Political instability boosts prices
Three international situations have prompted analysts to take the view that oil prices will rise in the coming weeks.
In the Middle East, Israel’s December military action against the Hamas organization in the Gaza strip has analysts speculating about further tension between other Middle Eastern governments, many of whom produce oil, and the Israeli government.
In addition, a contract dispute has led to the government-owned energy company in Russia cutting gas supplies to Ukraine. Those reductions in turn have resulted in less natural gas flowing to the Czech Republic and Turkey with the possibility of other countries getting caught in the Russian-Ukrainian crossfire.
Finally, a separatist group in Nigeria has threatened to bomb that country’s main pipelines, a move that could limit oil supplies from the region.
U.S. dollar safe haven?
The same international disputes, however, also have experts believing that the American dollar is a better safe haven than the euro, British pound or some other currency.
The U.S. dollar rose more than two per cent against the euro in Monday trading.
Since oil is priced in U.S. dollars, a rising greenback means you can buy the same barrel of black gold for fewer American dollars, essentially cutting oil prices.
In addition, investors often sell oil, gold or another commodity if they believe the value of the U.S. currency is set to rise. Many analysts believe the currency should rise against the overvalued euro in coming months.
With files from the Canadian Press (more…)
