Canada Stocks Fall Amid Weak Earnings From Commodity Producers

Canadian stocks fell for a third day as investors weighed earnings from commodity producers including Teck Resources Ltd. and Goldcorp Inc.

Goldcorp, the biggest gold producer by market value, dropped 1.2 percent after taking a $1.96 billion writedown due to falling gold prices. Potash Corp. of Saskatchewan Inc. slumped 2.1 percent as it lowered its 2013 profit forecast. Teck Resources rose 3 percent as its profit beat estimates. Encana Corp. gained 1.7 percent after an analyst with TD Securities Inc. raised his rating for the stock.

The Standard & Poor’s/TSX Composite Index fell 3.16 points, or less than 0.1 percent, to 12,669.14 at 4 p.m. in Toronto. Trading volume was in line with the 30-day average.

“The Canadian numbers have been less than inspiring,” said Michael O’Brien, a fund manager with TD Asset Management Inc. in Toronto. The firm manages C$216 billion ($210 billion). “Expectations for these companies were pretty low coming into the quarter. Everybody knew it was going to be a horrendous quarter so people wanted to see just how bad it is and then pick at the pieces.”

Five of 10 industries in the benchmark index fell, led by a 0.8 percent decline in shares of utilities. Atco Ltd. lost 2 percent to C$44.11 as the electric power distributor fell for the fourth time in five days.

Industrial stocks rose the most, adding 0.4 percent as a group, as Canadian Pacific Railway Ltd. advanced 3 percent to C$131.26 to snap four days of losses.

Fifteen companies in the S&P/TSX report earnings today and tomorrow, including TransCanada Corp. and Canadian Utilities Ltd.

Fertilizer Slump

Potash Corp., the world’s largest fertilizer producer, sank 2.1 percent to C$38.35, the lowest close since November. The Saskatoon, Saskatchewan-based company said it expects profit of $2.45 to $2.70 a share this year, compared with an April forecast of $2.75 to $3.25 and the $2.84 average of 30 estimates compiled by Bloomberg.

Potash Corp. reported second-quarter profit of 73 cents a share, short of the 80 cent analysts’ average. Prices for potash are down because of plentiful producer inventories and historically low import volumes in India.

Goldcorp fell 1.2 percent to C$28.88 after writing down the value of its assets and announcing it will slow down some project spending due to lower gold prices. The Vancouver-based company reported adjusted earnings of 14 cents a share, trailing the 23-cent average of 19 estimates compiled by Bloomberg.

Gold-mining companies have announced at least $13 billion of writedowns in the past two months after the precious metal’s steepest quarterly drop in London trading in more than nine decades.

Teck Resources

Teck Resources, Canada’s largest diversified miner, climbed 3 percent to C$24.41 after reporting adjusted earnings of 34 cents a share, topping analysts’ average forecast of 32 cents.

Teck said output at its Quintette coal mine in British Columbia won’t begin until a recovery in the market for metallurgical coal, and development of its Quebrada Blanca Phase 2 copper project has also been slowed.

Encana added 1.7 percent to C$18.09 after Menno Hulshof, analyst with TD Securities, raised his rating for the company to buy from hold on a positive operations outlook as well as cost-cutting plans. The stock has four buys, 16 holds and 6 sells, according to data compiled by Bloomberg.

Encana yesterday reported second-quarter adjusted earnings of 34 cents a share, topping estimates for 17 cents.

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