Everything You Need to Know on Friday: Air Canada Reports $2.04B Q3 Profit, Operating Revenue Down from Year Ago

Good morning mooers! Here are things you need to know about today's market:

● S&P/TSX 60 Index Standard Futures are trading at 1,454.90, up 0.53% from previous close

● Economy stalled in August, Q3 growth looks to fall short of Bank of Canada estimates

● Air Canada reports $2.04B Q3 profit, operating revenue down from year ago

● Brookfield Shifts Head Office to New York to Qualify for Indexes

Today, the Canadian dollar is trading at 71.87 US cents, a slight decrease from the previous close.

The Canadian economy was flat in August as high interest rates continued to weigh on consumers and businesses, while a preliminary estimate suggests it grew at an annualized rate of one per cent in the third quarter.

Statistics Canada’s gross domestic product report Thursday says growth in services-producing industries in August were offset by declines in goods-producing industries. A preliminary estimate for September suggests real gross domestic product grew by 0.3 per cent.

Andrew DiCapua, a senior economist with the Canadian Chamber of Commerce, said economic momentum at the start of the summer doesn’t seem to be holding.

“There are signs that September growth is going to be positive, but if you look at a variety of different indicators, like hours worked being down, or even retail sales when you take out automotive vehicles, those are all pointing towards downward trends,” DiCapua said.

The manufacturing sector was the largest drag on the economy in August, followed by utilities, wholesale and trade and transportation and warehousing.

The airline says its profit amounted to $5.38 per diluted share for the quarter ended Sept. 30, up from $3.08 per diluted share a year earlier.

Operating revenue for the quarter totalled $6.11 billion, down from $6.34 billion in the same quarter last year.

On an adjusted basis, Air Canada says it earned $2.57 per diluted share, down from an adjusted profit of $3.41 per diluted share a year earlier.

In its outlook, the airline says it now expects its capacity measured by available seat miles for 2024 to be up about five per cent from 2023 compared with earlier expectations for growth of 5.5 to 6.5 per cent.

It also says it now expects its adjusted cost per available seat mile to be up about two per cent from 2023, compared with earlier expectations for growth of 2.5 to 3.5 per cent. Air Canada’s adjusted earnings before interest, taxes, depreciation and amortization for 2024 is expected to total about $3.5 billion, up from earlier guidance for between $3.1 billion and $3.4 billion.

The shift aims to increase “BAM’s visibility among a much broader universe of active public investors who benchmark against these indices,” the Canadian alternative asset manager said in a statement late Thursday.

The move “makes sense” because the US accounts for the biggest share of Brookfield Asset’s employees and revenue, Chief Financial Officer Hadley Peer Marshall told investors in September, adding that Brookfield would remain incorporated in Canada. The move won’t result in any changes to operations, strategic plans, or dividend tax treatment, according to Thursday’s statement.

The size of Brookfield Corp.’s economic stake in BAM won’t change, but the switch would simplify Brookfield Asset’s structure and ensure the publicly traded entity reflects its value — a market capitalization of about $85 billion based on the current stock price, compared with about $23 billion today, the company said.