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Canadian Stocks Decline to One-Month Low Amid Weaker Earnings

Feb. 21 (Bloomberg) -- Canadian stocks fell to the lowest level in more than a month as energy shares slid amid a drop in crude and weaker-than-estimated earnings from Bombardier Inc. and Tim Hortons Inc.

Bombardier plunged 9.1 percent after pushing back initial deliveries of one of its business jets to 2014 and reporting earnings that missed analysts’ estimates. Tim Hortons dropped 3 percent after announcing 2013 guidance and fourth-quarter earnings below forecasts. Suncor Energy Inc., Canada’s largest energy company, and Canadian Natural Resources Ltd. lost at least 1.6 percent as crude fell the most in three months.

The Standard & Poor’s/TSX Composite Index fell 74.08 points, or 0.6 percent, to 12,639.97, the lowest level since Jan. 16. The S&P/TSX has risen 1.7 percent this year.

“After the drubbing we’ve taken in the resource sectors, we’ve had a bit of shellshock,” said Bob Decker, a fund manager with Aurion Capital Management, who helps manage about C$6 billion ($5.89 billion), from Toronto. “Tim Hortons, with their soft guidance and share buyback, is giving the message of slow growth to the market.”

Energy and bank shares contributed the most to losses in the S&P/TSX as six of 10 industries retreated. Trading volume was 29 percent above the 30-day average.

Royal Bank of Canada, the nation’s largest lender, lost 0.8 percent to C$63.96, retreating from an all-time high yesterday.

Suncor, Bombardier

Suncor dropped 1.6 percent to C$31.49, the lowest in five months, while Canadian Natural Resources sank 1.9 percent to C$29.99. Crude for April delivery tumbled 2.5 percent to $92.84 a barrel in New York, the lowest settlement this year. A U.S. government report showed crude stockpiles climbed 4.14 million barrels last week to 376.4 million, the highest since July.

Bombardier, based in Montreal, fell 39 Canadian cents to C$3.89 after pushing back initial deliveries of its Learjet 85 business aircraft and saying its train unit wouldn’t meet a 2013 profit target.

The company reported adjusted fourth-quarter earnings of 10 cents a share, short of the 12-cent average analyst estimate. Bombardier said its total backlog at the end of 2013 rose to a record $66.6 billion from $55.8 billion a year earlier.

Tim Hortons, the biggest coffee and doughnuts chain in Canada, sank C$1.50 to C$49.30. The Oakville, Ontario-based company reported fourth-quarter adjusted earnings of 70 Canadian cents, compared with estimates of 71 cents.

The company forecast 2013 earnings of C$2.87 to C$2.97, below analysts’ expectations of C$3. It anticipates weaker comparable sales in the first quarter due to economic concerns, a competitive environment and unfavorable weather.

Yamana Gold Inc. climbed 5 percent to C$15.43 after the gold producer reported fourth-quarter adjusted earnings of 26 cents, exceeding analysts’ forecasts of 25 cents.

Chief Executive Officer Peter Marrone said in an interview with Bloomberg that he doesn’t have the appetite for an acquisition and will focus on putting three mines into commercial production this year.

To contact the reporter on this story: Eric Lam in Toronto at elam87@bloomberg.net

To contact the editor responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net

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