Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Telecoms in earnings spotlight; loonie could find lift from jobs data

TORONTO - Earnings from corporate Canada and the latest reading on job creation will be the prime focus for investors this coming week.

The Toronto stock market finished with a gain of 1.59 per cent last week, boosted by deal-making and positive earnings reports from the energy, industrial and technology sectors. The Dow industrials edged up 0.92 per cent.

This week, traders will look to the telecom sector in particular, with earnings reports out from heavyweights BCE Inc. (TSX:BCE) and Telus Corp. (TSX:T).

Luciano Orengo, portfolio manager at Manulife Asset Management, said he expects earnings from both telcos should be "at least in line with analyst expectations."

But he noted that there are quite a few headwinds facing them.

"There’s more competition, there is at least for Rogers and BCE, losing cable subscribers, people are cutting their cable," he said.

"Then there's government oversight. Ottawa wants to make the telecoms more competitive, they like to have an entrant to keep everybody more honest so between that, and in the case of BCE, losing the NHL playoff broadcasting rights. So you know, valuations got a little stretched."

Analysts surveyed by Thomson Reuters expect earnings per share from Telus at 61 cents and 60 cents ex-items. A year ago, the Vancouver-based company posted earnings per share of 56 cents. Analysts look for BCE to post earnings per share of 76 cents per share, up from 73 cents a year ago.

Investors will also consider earnings during the week from Tim Hortons (TSX:THI), Canadian Tire (TSX:CTC.A), auto parts giant Magna International (TSX:MG), pipeline company Enbridge (TSX:ENB) and oil company Talisman Energy (TSX:TLM).

Meanwhile, the Canadian dollar could find some added lift from the latest reading on employment on Friday and trade data earlier in the week. The loonie gained about half a cent last week amid a generally positive run of economic data and a narrowing in price between Western Canadian Select crude, which is produced from the oilsands, and West Texas Intermediate, a lighter crude used as the U.S. benchmark.

It should be difficult for the Canadian economy to beat the performance in March when 43,000 jobs were cranked out, even as job creation has been volatile and regularly missing economists' expectations.

But Peter Buchanan, senior economist at CIBC World Markets, said he expects job creation to come in at around 18,000 with the jobless rate remaining steady at 6.9 per cent.

"And that’s really what we need to have — a trend basis with two, 2.5 per cent gross domestic product growth and one per cent or so productivity, which we think is what we’re seeing from the Canadian economy at this point," he said.

"The other thing is, we only had 10,000 per month jobs in the last half of the year, so we do think there may be a bit of room for catch-up, a stronger performance on the job side."

Buchanan also said he expected better balance from the April jobs data, noting that job growth in March was largely driven by the public sector.

"I think we will see a bit better quality of jobs than we did in March," he said.

"We’re looking for an increase in the energy sector, resources generally. Transport, warehousing more gains there. And also, longer term, we have seen significant growth in the last year in areas like health-care, hospitality, (all) beneficiaries of a lower dollar."

Merchandise trade data for March comes out on Tuesday and Buchanan also expects improvement in that area after Canada racked up a $290-million trade surplus in February.

"Our forecast is for a $500-million surplus," Buchanan said, with oil playing a big part in the improvement.

"Oil is a positive, energy is up on a trend basis. U.S. production is crowding out exports from OPEC jurisdictions. Our exports have been setting records recently."

It's a relatively light week for economic data in the U.S. The major report for the week is the Institute for Supply Management's report on the health of the non-manufacturing sector.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Sudden Surge: Flood of 2014
Opportunity Magazine — The Bakken
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates