Top headlines: Toyota Canada reissues urgent ‘do not drive’ warning for 7,300 cars

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Today’s headlines

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Top story

Toyota Canada issues ’do not drive’ warning for 7,300 cars; recall for airbag defects

Toyota Canada Inc. has reissued an urgent “Do not drive” warning for about 7,300 cars as part of a decade-old campaign to remind customers their vehicles may have a defective Takata airbag.

Phillip Crowe, media spokesperson of Toyota Canada, says the recall isn’t new but a repeat of an existing recall for Takata airbags at risk of exploding and hurling shrapnel.

The warning affects the 2003 and 2004 Corolla and Corolla Matrix models as well as 2004 and 2005 RAV4s.

Toyota is hoping the advisory reaches people who didn’t respond to their first recall in 2013, later expanded in 2015, Crowe says.

Owners can check on Toyota’s recall website to see if they’re affected, and contact a Toyota dealership to have their cars fixed for free.

Takata airbag malfunctions led to the largest series of auto recalls in history, with about 100 million vehicles affected worldwide.

The Canadian Press

5:18 p.m.

CPKC forecasts solid earnings in 2024 after big drop in quarterly profits

Canadian Pacific Kansas City Ltd. says it expects its adjusted earnings to grow by double digits this year, following an almost 20 per cent year-over-year drop in net income last quarter.

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The Calgary-based company says net income attributable to controlling shareholders totalled $1.02 billion in the quarter ended Dec. 31, down from $1.27 billion in the same period a year before.

CPKC — the product of Canadian Pacific’s purchase of Kansas City Southern in April — says it boosted revenues to $3.78 billion last quarter from $2.46 billion a year earlier, which was before the purchase.

The railroad operator says its fourth-quarter diluted earnings per share fell 19 per cent to $1.10 versus $1.36 per share the previous year.

Analysts had predicted diluted earnings of $1.13 per share, according to financial markets data firm Refinitiv.

CPKC is planning capital spending of $2.75 billion throughout 2024 and forecasting core adjusted combined diluted earnings per share will grow in the double digits from $3.84 per share in 2023.

The Canadian Press

5:10 p.m.

Alphabet shares fall after search revenue misses estimates

Google parent Alphabet Inc. reported fourth-quarter revenue from its core search advertising business that fell short of analysts’ estimates, overshadowing an otherwise strong end to the year.

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Sales, excluding partner payouts, were US$72.32 billion in the three months ended Dec. 31, the company said Tuesday in a statement. That was better than the US$71 billion analysts had projected, according to data compiled by Bloomberg. Net income was US$1.64 per share, compared with Wall Street’s estimate of US$1.59 per share.

Revenue in Alphabet’s core search business, which is fuelled by advertising, was US$48.02 billion, narrowly missing analysts’ projections for US$48.15 billion.  The shares fell 4.3 per cent in extended trading.

Wall Street had high expectations for Alphabet’s efforts in AI, pushing the stock up almost 60 per cent over the past 12 months, valuing the company at nearly US$2 trillion. But now investors are looking for a sense of when the technology will actually start moving the needle for earnings and revenue.

— Bloomberg

4:50 p.m.

Microsoft posts strongest revenue growth since 2022

Microsoft Corp. posted its strongest revenue growth since 2022, spurred by interest in new artificial intelligence products that in turn are driving renewed spending on cloud computing.

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Revenue in the second quarter, which ended Dec. 31, rose 18 per cent to US$62 billion, while profit was US$2.93 a share, the company said in a statement Tuesday. Analysts polled by Bloomberg on average estimated per-share earnings of US$2.78 on sales of US$61.1 billion.

Azure cloud-services sales gained 30 per cent, compared with 29 per cent growth in the previous quarter. That exceeded the 28 per cent growth analysts projected.

Microsoft’s shares slipped to US$401.50 in late trading. They closed at US$408.59 in New York. The stock rose 19 per cent in the last three months of 2023, compared with an 11 per cent rise for the S&P 500 Index. Optimism for Microsoft’s AI prospects has sent its market capitalization above US$3 trillion, passing Apple Inc. as the world’s most valuable company.

— Bloomberg

4:40 p.m.

Market close: TSX closes up as energy stocks rise, U.S. stock markets mixed

Canada’s main stock index closed modestly up thanks in part to a rise in energy stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index ended up 27.81 points at 21,227.87.

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In New York, the Dow Jones industrial average was up 133.86 points at 38,467.31. The S&P 500 index was down 2.96 points at 4,924.97, while the Nasdaq composite was down 118.15 points at 15,509.90.

The Canadian dollar traded for 74.53 cents U.S. compared with 74.39 cents on Monday.

The March crude oil contract was up US$1.04 at US$77.82 per barrel and the March natural gas contract was up two cents at US$2.08 per mmBTU.

The April gold contract was up US$6.30 at US$2,050.90 an ounce and the March copper contract was up three cents at US$3.91 a pound.

— The Canadian Press

12:36 p.m.

Midday markets: TSX rises, Wall Street mixed

Canada’s main stock index was up in early afternoon trading, boosted by gains in financial, energy and industrial stocks, while stock markets on Wall Street were mixed.

The S&P/TSX composite index was up 0.16 per cent at 21,233.16.

In New York, the Dow Jones industrial average was up 0.12 per cent at 38,378.63. The S&P 500 index was down 0.13 per cent at 4,921.32, while the Nasdaq composite was down 0.74 per cent at 15,509.57.

The Canadian dollar traded for 74.53 cents U.S. compared with 74.39 cents on Monday.

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The March crude oil contract was up 1.51 per cent at US$77.94 per barrel and the March natural gas contract was up three cents at US$2.08 per mmBTU.

The April gold contract was up 0.41 per cent US$2,052.90 an ounce and the March copper contract was up less than a penny at US$3.88 a pound.

— The Canadian Press

12:26 p.m.

Champagne says he’s working phones to court new players for Canadian grocery market

Industry Minister Francois-Philippe Champagne is once again insisting that he is reaching out to international grocers in the hopes they will open up shop in Canada.

The minister says he spoke to one foreign grocer just this morning as part of his efforts to court new players to join the Canadian grocery sector — but he’s not naming any names.

Champagne met with Canadian grocers in the fall about food inflation and demanded they create plans to stabilize grocery prices or face consequences including potential tax measures.

He recently expressed disappointment that the grocers have not been more transparent about their plans, but has stayed mum on whether the federal government plans to punish them for it.

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The minister sent a letter to the commissioner of the Competition Bureau on Monday asking to discuss a follow-up study on the grocery sector, now that the bureau has new powers to subpoena companies for information.

The Competition Bureau published the findings of its previous study in June, saying that grocers’ co-operation varied and was not fulsome.

— The Canadian Press

Read the full story here

11:55 a.m.

Air Canada rolls out new measure to address accessibility shortfalls

Air Canada says it is adopting measures to better serve travellers living with non-visible disabilities.

Dubbed the Hidden Disabilities Sunflower program, the effort allows customers to wear a sunflower lanyard that indicates to staff they may need extra assistance or have specific needs.

The move falls under Air Canada’s three-year accessibility plan, and comes after numerous reports of passenger mistreatment last year, including an incident where a man with spastic cerebral palsy was forced to drag himself off of an airplane due to a lack of help.

In November, chief executive Michael Rousseau apologized for the carrier’s accessibility shortfalls and announced he would speed up its accessibility scheme along with fresh measures to improve the travel experience for hundreds of thousands of passengers living with a disability.

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The airline says the sunflower lanyard will be available at check-in counters at multiple airports across Canada and on board all Air Canada flights.

The carrier says it is working to train employees and build awareness so they can recognize and respond appropriately to participating customers.

— The Canadian Press

11:24 a.m.

Ontario looks to extend life of aging nuclear plant to meet growing electricity demand

Ontario Power Generation is moving ahead with a plan to extend the life of the aging Pickering Nuclear Generating Station near Toronto by decades, as the province tries to secure more electricity supply in the face of increasing demand.

Energy Minister Todd Smith had asked OPG in 2022 to study the feasibility of refurbishing four of the units at the nuclear plant, which have been operating since the 1980s.

Smith is announcing today that the refurbishment will proceed and that OPG plans on spending $2 billion on engineering and design work for the project expected to be completed in the mid-2030s.

Pickering produces about 14 per cent of the province’s electricity but its current licence to operate the four units in question expires at the end of this year.

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OPG has asked the Canadian Nuclear Safety Commission to extend that to 2026, but a public hearing for that application has not yet been scheduled.

The nuclear safety commission would also have to approve the refurbishment.

Read the full story.

— The Canadian Press

10:50 a.m.

GM is bringing back plug-in hybrids

General Motors Co. is bringing back hybrid vehicles in North America.

The automaker plans to reintroduce gas-electric hybrid models, which the company sells in other markets currently, while staying committed to ramping up production of battery-only vehicles, chief executive Mary Barra said Tuesday on an earnings conference call. The company is also keeping its goal of having an all-electric vehicle lineup by 2035.

“Our forward plans include bringing our plug-in hybrid technology to select vehicles in North America,” Barra said, without giving details on plans for specific models.

Plug-ins are gas-engine vehicles that can also run on batteries capable of being recharged externally. GM has sold various types of hybrids in recent years, including plug-ins, but doesn’t currently offer any in its North America lineup. Asian brands such as Toyota Motor Corp. and Honda Motor Co. and Hyundai Motor Co. dominate the market for hybrids in the United States.

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— Bloomberg

10:15 a.m.

Markets open: Wall Street falls ahead of critical Microsoft, Alphabet earnings, TSX down

Stocks on Wall Street fell after closing at another record Monday, with traders awaiting results from two of the tech behemoths that have powered the market rally from the bottom amid the artificial-intelligence excitement.

The stakes are high for Microsoft Corp. and Google’s parent Alphabet Inc. — two of the biggest players in AI-related software — which report results after the closing bell. Recent trading has shown that big tech continued to drive the market, with the heavy concentration being cited by some as a warning flag. The dominance of the 10 biggest stocks is increasingly drawing similarities with the dot-com bubble, raising the risk of a selloff, according to JPMorgan Chase & Co. quantitative strategists.

As the earnings season rolls in, traders are also wading through results from an economic barometer — United Parcel Service Inc. — which tumbled on a disappointing guidance. The courier also plans to cut 12,000 jobs. A batch of economic reports is on schedule ahead of Wednesday’s United States Federal Reserve decision on rates and Jerome Powell’s remarks.

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“Everything will play out in the next three days between the Fed meeting and the US tech results,” said Alexandre Baradez at IG Markets. “The market is waiting for Powell to open the door for a rate cut in March, but it could very well be signaled for the second quarter.”

The S&P 500 was down 0.1 per cent, while the Down Jones industrial average and the Nasdaq composite index fell 0.15 per cent and 0.23 per cent, respectively.

In Canada, the S&P/TSX compoiste index was down 0.23 per cent on broad-based pullbacks.

— Bloomberg

9 a.m.

Metro raises dividend, reports bigger profit

Metro Inc. reported a first-quarter profit of $228.5 million as its sales gained 6.5 per cent and raised its dividend.

The grocery and drugstore retailer said it will pay a quarterly dividend of 33.5 cents per share, up from 30.25 cents per share.

The increased payment to shareholders came as Metro said its profit amounted to 99 cents per diluted share for the quarter ended Dec. 23 compared with a profit of $231.1 million or 97 cents per diluted share a year earlier when the company had more shares outstanding.

Sales for the 12-week period totalled $4.97 billion, up from $4.67 billion in the same quarter a year earlier that ended on Dec. 17, 2022.

Food same-store sales were up 6.1 per cent, helped in part by the timing of the end of the quarter relative to Christmas. Adjusting for the Christmas week shift, Metro said food same-store sales were up 3.4 per cent. Pharmacy same-store sales were up 3.9 per cent.

On an adjusted basis, Metro said it earned $1.02 per diluted share, up from an adjusted profit of $1 per share a year earlier.

— The Canadian Press

Read the full story here.

7:30 a.m.

Elon Musk’s Neuralink implants brain chip in first human patient

Elon Musk said that the first human patient has received a brain implant from his startup Neuralink Corp., a significant step forward for the company that aims to one day let humans control computers with their minds.

In a post on X, formerly Twitter, Musk said that the patient is recovering well, and that initial results of the procedure were promising.

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Neuralink’s brain implant aims to help people with traumatic injuries operate computers using only their thoughts. In May, the company said it had received approval from the United States Food and Drug Administration to conduct its first human trials. And late last year Neuralink said it was recruiting patients with quadriplegia due to cervical spinal cord injury or amyotrophic lateral sclerosis (ALS) for the trial.

On X, Musk wrote that Neuralink’s first product would be called Telepathy. It will enable “control of your phone or computer, and through them almost any device, just by thinking,” he said Monday. Musk added that the product’s initial users will be people who have lost the use of their limbs. “Imagine if Stephen Hawking could communicate faster than a speed typist or auctioneer,” he wrote. “That is the goal.”

Musk said that Neuralink had good results for neuron spike detection — that means the company is getting recordings from the patient’s brain, said Kip Ludwig, co-director of the Wisconsin Institute for Translational Neuroengineering at the University of Wisconsin. Now, Neuralink needs to show it can do more than other leading companies in the area, such as Blackrock Neurotech and Synchron, he said.

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Sarah McBride, Bloomberg

Read the full story here.

7:30 a.m.

Stock markets before the opening bell

U.S. stock futures kept to small ranges as investors looked forward to a rush of major earnings for insights on whether the record-breaking rally in equities can continue.

Futures contracts were steady after the latest record close on Wall Street stretched the S&P 500’s gains this month to 3.3 per cent, while the Nasdaq 100 has surged 4.6 per cent. Tesla Inc. rose as much as 2.5 per cent in premarket as exchange-traded funds managed by Cathie Wood’s Ark Investment Management bought more shares of the EV maker. Europe’s Stoxx 600 index crept to a new two-year high as banks and media stocks led gains.

Earnings grab the limelight later as the busiest week so far of this reporting season moves up a gear. Microsoft Corp. and Alphabet Inc. will offer the first evidence of whether the bullish sentiment around the so-called Magnificent Seven looks sustainable. By the time Apple Inc., Amazon.com Inc. and Meta Platforms Inc. are done reporting Thursday, five tech giants with a combined market value exceeding US$10 trillion will have updated the market.

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The tech rally has been fuelled by expectations that interest-rate cuts from the U.S. Federal Reserve will help fuel earnings growth. While the Fed is expected to hold rates this week, investors are keenly awaiting comments from chair Jerome Powell after Wednesday’s decision for clues on the policy outlook. Traders are assigning roughly even odds to the prospect that the central bank will start lowering borrowing costs at its next meeting in March.

The S&P/TSX composite index closed

— Bloomberg

What to watch today

It’s a big day for tech earnings with Microsoft Corp. and Alphabet Inc. expected to post results. Metro Inc., Canadian Pacific Kansas City Ltd., General Motors Co. and Starbucks Corp. will also release earnings.

The standing committee on Canadian Heritage meets on job cuts announced at CBC/Radio-Canada. Catherine Tate, chief executive of CBC/Radio-Canada, appears as a witness.

Data releases in the United States today include the S&P CoreLogic Case-Shiller home price index for November, the FHFA home price index for November, the Conference Board consumer confidence index for January, and the job openings and labour turnover survey for December.

Need a refresher on yesterday’s top headlines? Get caught up here.

— Additional reporting by The Canadian Press, Associated Press and Bloomberg

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