Canada Stocks- Tsx Drops As U.s. Gridlock Drags On

rose 1.4 percent after receiving approvals for products in the U.S. and Canada. Agrium Inc. added 0.7 percent after naming a successor for its retiring chief executive officer. The Standard & Poors/TSX Composite Index (SPTSX) fell 103.88 points, or 0.8 percent, to 12,735.12 at 4 p.m. in Toronto, the lowest close since Sept. 13. The index has gained 2.4 percent this year for the second-worst performance among developed markets, ahead of only Singapore . Markets are in a wait-and-see approach to see whats happening in the U.S. and that really determines what happens in Canada, said Anish Chopra, fund manager with TD Asset Management Inc. in Toronto. His firm manages about C$216 billion ($209 billion). In the past theyve been able to get to last-minute deals. In this case it might be more of a comprehensive package that includes the debt ceiling. The problem is the ceiling may not be exactly Oct.

Canada Stocks Fall to a Three-Week Low Amid U.S. Budget Impasse

government shutdown dragged into a third day, offsetting positive economic data from China and weighing on most major sectors. Investors also had an eye on BlackBerry, which is the focus of a $4.7 billion bid from a consortium led by Fairfax Financial. Data showed rising demand caused activity in China’s services sector to expand at the fastest pace in six months in September but failed to lift sentiment. The focus of the market remained the U.S. government shutdown, which highlighted the political gridlock in Washington over the debt crisis and the uncertainty investors are facing as no immediate resolution seemed in sight. “Who knows what’s going to happen or how long it’s going to drag out,” said Sal Masionis, stockbroker at Brant Securities. “You just stay away and do nothing, and have a little cash on the side.” Investor confidence in Canada and the United States has taken a beating, he said, adding that the uncertainty could drag on until the end of the month. Volumes on the benchmark Canadian index were sluggish. About 56 million shares changed hands on Thursday at mid-morning, compared with an average daily volume of 304 million shares in September, according to market operator TMX Group. The Toronto Stock Exchange’s S&P/TSX composite index was down 49.74 points, or 0.39 percent, at 12,789.26. The TSX could lose ground before the end of the year due to the U.S. debt and budget troubles, Masionis said. Eight of the 10 main sectors on the index were in the red on Thursday. Suncor Energy Inc lost 1.1 percent to C$36.40 and had the biggest negative influence on the market.

Air Canada Reports September Load Factor and Updates Guidance

“I am pleased to report solid traffic results for the month of September, led by strong gains of almost six per cent in the Pacific market,” said Calin Rovinescu, President and Chief Executive Officer. “For the third quarter, our load factor of 86.2 per cent is in line with last year’s all-time high for the same period and is a strong indication of the effectiveness of our capacity management strategy given the increase in industry capacity that came into the markets in the quarter. Based on our third quarter load factor, and coupled with the ongoing positive results of our cost transformation and revenue enhancement initiatives, we expect EBITDAR (excluding the impact of benefit plan amendments in 2012) and adjusted net income for the third quarter to be above last year’s level for the same period. “Our achievements in September are the result of our ongoing focus on the execution of our priorities. During the month, we successfully completed the refinancing of our 2010 notes, an important milestone in achieving our priorities as this significantly lowers our cost structure, strengthens our balance sheet and improves our credit profile. We also announced the implementation of an expanded commercial agreement with Air China, our valued Star Alliance partner, for enhanced codeshare and interline services that provide our customers seamless connections on a single itinerary for travel via our respective hubs to new destinations in China and in Canada. This year’s Ipsos Reid Business Traveller Survey released in September confirms that Canada’s frequent business travelers recognize Air Canada as their preferred airline by a growing margin – the widest margin versus our domestic competitors since 2008. This recognition by our most discerning customers reflects Air Canada’s award-winning product and our employees’ focus on taking care of our customers while transporting them safely to their destination,” concluded Mr. Rovinescu. Updated Outlook As a result of the impact of cost reduction initiatives across various expense line categories, including sales and distribution costs, food, beverage and supplies and other operating expenses, Air Canada now expects its third quarter 2013 adjusted CASM to decrease between 3.0 to 3.5 per cent when compared to the third quarter of 2012 (as opposed to the adjusted CASM decrease of 1.5 to 2.5 per cent projected in its August 7, 2013 news release). Taking into account the projected improvement in adjusted CASM for the third quarter of 2013, Air Canada now expects its full year 2013 adjusted CASM to decrease in the range of 1.5 to 2.0 per cent from the full year 2012 (as opposed to the 1.0 to 2.0 per cent decrease projected in its August 7, 2013 news release). Air Canada continues to expect its full year 2013 system and domestic ASM capacity to each increase in the range of 1.5 to 2.5 per cent when compared to the full year 2012. Air Canada expects that the Canadian dollar will trade, on average, at C$1.03 per U.S. dollar for the full year 2013 and that the price of jet fuel will average88 cents per litre for the full year 2013. The following table summarizes Air Canada’s above-mentioned outlook: Aircraft maintenance expense Decrease $40 million All projections referred to in this news release related to EBITDAR and adjusted net income with respect to the third quarter of 2013 are preliminary, have not been reviewed by Air Canada’s auditors and are subject to change as Air Canada’s third quarter 2013 financial results are finalized. The outlook provided constitutes forward-looking statements within the meaning of applicable securities laws and is based on a number of additional assumptions and subject to a number of risks. Please see section below entitled “Caution Regarding Forward-Looking Information.” Non-GAAP Measures Below is a description of certain non-GAAP measures used by Air Canada to provide additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under Canadian GAAP and do not have standardized meanings and may not be comparable to similar measures presented by other public companies. Adjusted net income (loss) is used by Air Canada to assess its performance without the effects of foreign exchange, net financing expense on employee benefits, mark-to-market adjustments on derivatives and other financial instruments recorded at fair value and unusual items. EBITDAR is commonly used in the airline industry and is used by Air Canada to assess earnings before interest, taxes, depreciation, amortization and impairment, and aircraft rent, as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. Adjusted CASM is used by Air Canada to assess the operating performance of its ongoing airline business without the effects of fuel expense, the cost of ground packages at Air Canada Vacations and unusual items, as such expenses may distort the analysis of certain business trends and render comparative analyses to other airlines less meaningful.