Skip to main content

The Globe and Mail

At midday: TSX down, Apple rally picks up steam

A customer enters an Apple store on its opening day at Covent Garden in London in August, 2010. An Apple subsidiary in Ireland, a holding company that includes Apple’s retail stores throughout Europe, has not paid any corporate income tax in the last five years. The subsidiary, which has a Cork, Ireland, mailing address, received $29.9-billion in dividends from lower-tiered offshore Apple affiliates from 2009 to 2012, comprising 30 per cent of Apple’s total worldwide net profits, the report said.


The Toronto stock market was lower Wednesday, weighed down by some earnings misses while mining stocks fell amid data that showed a deepening slowdown in China's manufacturing sector.

The S&P/TSX composite index was down 19.07 points to 12,726.31.

The Canadian dollar shed early gains and dipped 0.03 of a cent to 97.2 cents US.

Story continues below advertisement

U.S. indexes were mixed in the wake of strong earnings reports from the likes of Apple Inc. and Ford Motor Co.

But a weak report from heavy equipment maker Caterpillar helped push the Dow Jones industrials down 39.14 points to 15,528.6, the Nasdaq ran up 10.68 points to 3,589.96 and the S&P 500 index was off 3.94 points to 1,688.45.

Cenovus Energy Inc. (TSX:CVE) had $255 million or 34 cents per share in operating earnings and a $179-million net profit in the second quarter. The operating earnings were 14 cents below a consensus estimate of 48 cents and Cenovus also said its 2013 oilsands operating costs this year will be higher than forecast in its previous guidance. Its shares fell $1.28 to $30.97.

Canadian Pacific Railway (TSX:CP) posted net income for the second-quarter of $252 million, or $1.43 per diluted share, versus $103 million, or 60 cents per share, a year earlier. The earnings missed estimates by six cents a share and its stock dipped $1.86 to $128.32.

But CP's operating ratio, which is a key measure of how efficiently railways operate, improved to 71.9 per cent in the second quarter, an all-time record for the railroad.

"(CEO) Hunter Harrison has actually delivered," said Chris King, portfolio manager at Morgan, Meighen and Associates. "For him to move it down to that level, man that tells you he is the god of railways."

On a more positive note, Rogers Communications Inc. (TSX:RCI.B) shares were ahead $1.31 to $42.54 as the company reported $497 million in quarterly adjusted net income, a four per cent increase from last year and better than analysts' consensus estimate of $491.95 million.

Story continues below advertisement

Loblaw Companies Ltd. (TSX:L) made $178 million in net earnings in the second quarter, up from $156 million in the same period a year ago. The grocer's basic net earnings per common share rose 14.5 per cent in the quarter to 63 cents, about five cents per share better than a consensus estimate compiled by Thomson Reuters and its shares advanced $1.10 to $49.04.

In the U.S., quarterly earnings at Caterpillar fell 43 per cent $960 million, or $1.45 per share as dealers cut inventories more than the company expected. The company also cut its profit and revenue outlook for the year. Analysts had expected a profit of $1.69 per share and its shares dropped $1.69 to $83.83.

After the close Tuesday, Apple Inc. posted quarterly earnings of $6.9 billion, or $7.47 per share, in its fiscal third quarter, a 22 per cent drop from a year ago. The earnings topped the average analyst estimate of $7.31 per share and its shares were ahead $24.74 or 5.9 per cent to $443.73.

Revenue totalled $35.3 billion versus $35 billion a year ago. Analysts had projected that revenue would be unchanged from a year ago.

The results mark the second straight quarter that Apple's earnings have fallen from the previous year after a decade of steadily rising profits. Its shares were up five per cent in pre-market trading in New York.

The TSX base metals sector fell two per cent amid weak Chinese manufacturing data while metal prices advanced with September copper up one cent to US$3.21 a pound. An HSBC survey showed China's manufacturing at an 11-month low this month. HSBC said the preliminary version of its monthly purchasing managers index declined to 47.7 this month from June's 48.2 on a 100-point scale on which numbers below 50 show a contraction in activity.

Story continues below advertisement

Teck Resources (TSX:TCK.B) fell 50 cents to C$23.87.

The gold sector was down about 2.8 per cent while August bullion declined $2.50 to US$1,332.20 an ounce. Goldcorp Inc. (TSX:G) faded 73 cents to C$29.96.

The energy sector dropped 0.85 per cent and the September crude contract on the New York Mercantile Exchange was down 66 cents to US$106.57 a barrel amid a slightly bigger than expected drop in U.S. crude inventories. Energy Department data showed supplies dropped by 2.8 million barrels last week, against the 2.6 million barrel drop that had been expected. Inventories have headed sharply lower over the past four weeks, supporting a 10-per cent rise in prices this month.

Other economic news showed that Americans snapped up new homes in June at the fastest pace in five years. The Commerce Department says sales rose 8.3 per cent to a seasonally adjusted pace of 497,000. That's up from 459,000 in May, which was revised lower.

In other corporate developments, Bombardier Aerospace says the first flight of its new CSeries commercial jet will occur in the coming weeks, without giving a specific date. The Montreal-based company had been aiming for the first flight by the end of July and Bombardier Inc. (TSX:BBD.B) shares lost four cents to $5.03.

European bourses advanced after financial information company Markit said its monthly purchasing managers' index for the 17-country eurozone rose to 50.4 points in July from 48.7 the previous month. Anything above 50 indicates an expansion.

London's FTSE 100 index was up 0.23 per cent, Frankfurt's DAX gained 0.39 per cent and the Paris CAC 40 was ahead 0.8 per cent.

Report an error
As of December 20, 2017, we have temporarily removed commenting from our articles. We hope to have this resolved by the end of January 2018. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to