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TSX closes higher, US equity markets lose ground – BNNBloomberg.ca

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4:20 p.m. ET: TSX closes higher, U.S. equity markets lose ground

The S&P/TSX Composite Index extended its rally Tuesday, rising 1.07 per cent while benchmark indices south of the border erased gains to close in the red. The broad market S&P 500 closed 0.52 per cent lower, the Dow Jones Industrial Average fell a modest 0.13 per cent and the tech-heavy Nasdaq Composite Index was the laggard with a 1.40 per cent drop.

It’s shaping up to be a busy week for the Nasdaq, with a slew of tech titans reporting earnings as investors digest the early fallout of the COVID-19 pandemic and economic lockdown.

In Toronto, eight of the eleven TSX subgroups closed in positive territory, led by energy, consumer discretionary and financials. Health care, consumer staples and information technology bucked the trend to end Tuesday’s trading session lower.

In all, 150 of the TSX’s 230 constituents finished in the green.

Lumber stocks were noticeable outperformers, with Canfor Corp., West Fraser Timber Ltd. and Norbord Inc. all notching double-digit gains to rank among the top-performing stocks on the TSX.

Global oil prices remained mixed, with the price for U.S. benchmark West Texas Intermediate for June delivery falling 0.8 per cent to US$12.70 per barrel, while the world benchmark Brent crude held on to a three per cent gain.

WTI has been roiled by a number of technical changes to the methodology of major oil funds, which hold large volumes of the futures contracts for American oil. Those funds have been rebalancing their holdings toward contracts for later delivery in an effort to avoid having their net asset value fall below zero, after contracts for May delivery plunged into negative territory shortly before their expiration last week.

While some of the movement in near-dated crude contracts is a result of technical trading mechanisms interfering with the organic supply and demand dynamics of crude pricing, concerns remain about  global oversupply in the face of demand destruction resulting from the virus outbreak.

The Canadian dollar held near 71.46 cents U.S., up two-tenths of a cent against its American counterpart, though the greenback was broadly weaker against all of its major-market peers.

2:00 p.m. ET: North American equity markets retrace lost ground into mid-afternoon

North American equity markets bounced off the lows into the waning hours of Tuesday’s trade, with the S&P/TSX Composite Index rising 1.2 per cent, the S&P 500 and Dow Jones Industrial Average up a little more than a quarter of a per cent and the Nasdaq Composite Index shedding about half a per cent.

In Toronto, eight of the 11 TSX subgroups were higher, led by energy, consumer discretionary and financials. Health care, information technology and consumer staples remained in negative territory.

154 of the composite’s 230 constituents were in the green, led by Canfor Corp., Teck Resources Ltd. and NFI Group Inc.

Oil prices remained mixed, with U.S. benchmark West Texas Intermediate down about 2.5 per cent to trade at US$12.50 per barrel while the global Brent crude price was up about two per cent. Alberta’s Western Canadian Select was trading lower, down 29 per cent to trade at US$4.62 per barrel.

The Canadian dollar moderated gains, up two-tenths of a cent against its U.S. counterpart to trade at 71.45 cents U.S.

11:00 a.m. ET: North American markets give back early gains into late morning

North American equity markets traded near session lows into the late morning, with the S&P/TSX Composite clinging to a modest 0.3 per cent gain, and benchmark stock indices south of the border sliding into the red. The S&P 500 and Dow Jones Industrial Average both traded modestly lower, while the tech-heavy Nasdaq Composite Index fell about one per cent.

It’s a busy week for Nasdaq-listed stocks, with a slew of earnings from tech titans including Google parent company Alphabet Inc., Facebook Inc., Apple Inc., Amazon.com Inc. and Microsoft Corp. all reporting earnings in the coming days.

In Toronto, seven of the 11 TSX subgroups were trading in positive territory, with energy, consumer discretionary and financials notching the largest percentage gains. Health care, information technology and materials posted the largest losses.

U.S. benchmark oil prices moderated some losses, with WTI trading about four per cent lower at about US$12.25 per barrel.

9:40 a.m. ET: North American equity markets extend rally in risk-on trade

North American equity markets rallied into the opening trade Tuesday, extending Monday’s gains as a risk-on trade saw investors buy into assets like equities. The S&P/TSX Composite Index – now up more than 30 per cent from the March 23 trough – rose about one per cent out of the gate, the S&P 500 and Dow Jones Industrial Average gained about one-and-a-half per cent and the Nasdaq Composite Index was up one per cent.

Toronto’s benchmark index has now recouped about half of its losses from the February 20 peak to that March trough.

Global oil prices were mixed, with international benchmark Brent up nearly five per cent while American West Texas Intermediate for June delivery was essentially unchanged at US$12.75 per barrel. WTI has been notably volatile due to changes in the methodology of some major oil funds, as they shift their holdings away from futures for first-month delivery into longer-dated contracts.

The moves have been made in an effort to prevent the funds from having negative net asset values after last week’s historic plunge in the expiring May contract, which traded at negative US$40 per barrel ahead of expiration.

Alberta’s Western Canadian Select fell nearly 16 per cent to trade at US$5.48 per barrel, though Canadian crude is only priced a handful of times per day.

The Canadian dollar gained four-tenths of a cent against its U.S. counterpart to trade at 71.68 cents U.S. However, the greenback was showing noticeable weakness against all its global peers as investors took a more risk-on tone and sold traditional safe-haven assets.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

Companies in this story: (TSX:T)

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

The Canadian Press. All rights reserved.

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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