Tag: Canada

Canada Post launches in Second Life

Posted by | Nov 2, 2007 | |

On Saturday, Canada Post will launch a virtual city in Second Life, where online shoppers will be able to visit the 3D virtual stores of Canada Post’s retail partners and shop for real gifts and merchandise.

“There are hundreds of thousands of Canadians in Second Life,” said Laurene Cihosky, SVP for Canada Post’s direct marketing division, in a statement.

Maple Grove , the name of the virtual city, is being positioned as a comfortable place for them to visit because of its uniquely Canadian feel, she said.

“The post office is the center of many communities across Canada. That’s why Maple Grove is part of the Second Life community instead of an isolated island,” Cihosky said, referring to the practice of building on a separate island away from the Second Life mainland for which many businesses opt. “Just like your local post office, visitors to Maple Grove can visit Canada Post and send packages or buy stamps, cards and gift cards and send them anywhere in Canada.”

The city will include a collection of stores from Canadian and American retailers who participate in Canada Post’s lookbook catalog. The lookbook highlights a selection of products from participating companies, with Canada Post handling the orders and fulfillment for most. Retailers in Maple Grove will include Toys “R” Us, The Shopping Channel, Brookstone, SkyMall, Red Canoe and Everything Olive.

Maple Grove will be launched on Saturday with a six-hour virtual live music festival. The virtual city will host additional Second Life events throughout the holiday season, including concerts, film screenings and shopping events.

Many retailers are offering incentives for Second Life visitors. The Shopping Channel will broadcast a variety of special offers, Everything Olive is offering an eco-friendly gift tote with purchase and Brookstone will take USD 15 off all purchases of USD100 or more.

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Express Delivery under Pressure to Add More Value as Parcel Service Closes the Gap

Posted by | Oct 31, 2007 | |

Europe’s parcel and express delivery business is expected to continue to grow at a higher rate than in previous years due to an increase in business-to-consumer (B2C) traffic and strong international demand, according to new research by market analyst Datamonitor.

However, the research, “European Express Market Map 2008,” which covers 12 major European markets, says that although currently exhibiting a higher growth rate than parcel services, express services are going to have to demonstrate extra value as customer demand is shifting to using cheaper yet reliable parcel services in key growth areas of international and business-to-consumer (B2C) delivery services.

“Over the next five years, the B2C and C2C (consumer-to-consumer) sectors will experience faster growth than B2B (business-to-business), due to increased e-commerce activity, especially in less mature home delivery markets such as Italy and Spain,” said Erik van Baaren, Datamonitor express analyst and author of the study.

International services are also growing at a higher rate primarily due to the enlargement of the European Union and the trend to centralize operations to fewer countries and outsource manufacturing to low-cost countries, according to van Baaren.

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Canadian Pacific Railway (US) (CP-$70.46-Peer Perform). What a Difference a Year Makes

Posted by | Oct 30, 2007 | |

GWR, Reports before the market, call at 11:00AM, (888) 428-4479

Canadian Pacific Railway (US) (CP-$70.46-Peer Perform)

What a Difference a Year Makes

• UPSIDE REPORT. Yesterday evening, CP reported 3Q continuing EPS of C$1.23, above both Cons. of $1.18 and our $1.17. Rev., EBIT and EPS grew by 3%, 8% and 14%, mostly decelerated from 7%, 9% and 12% growth during 2Q. Results were a bit worse on an operating basis as CP benefited by $0.02 from a lower tax rate and from a 1-time labor settlement gain which was not yet quantified.

• REPORTED YIELDS TURN NEGATIVE. Total yields declined 3.7% y-o-y, well below our +0.3% estimate and down from +2.2% last qtr. Yields were negative at CP for the 1st time since 1Q:04, although we suspect most of this is related to mix and the weaker US dollar. Total vols increased 6.2% and margins improved 110bp y-o-y including the impact from the 1-time labor benefit.

• CP GUIDES TO LOW END OF EPS RANGE. CP now expects C07 EPS at the low end of its unchanged C$4.30-$4.45 range. Despite -2.2% vols in C06, CP grew EPS by 20% last year and beat its original EPS guidance by C$0.10. However, this year with vols tracking up 3% YTD, CP is reducing guidance to the low-end of its initial range and forecasting only 9% EPS growth. Despite stronger vols, CP is suffering with slower yield growth and fewer productivity gains. What a difference a year makes.

• LOWERING OUR EPS ESTIMATES. We are lowering our 4Q:07 estimate by 7% to C$1.21, vs. prior Consensus of C$1.28. Our C07 estimate of C$4.33 is now in-line with CP’s lowered expectations. We are also lowering our C08 estimate by 4% to C$4.90, and we are now below prior Consensus of C$4.94. We expect the weak U.S. dollar to continue to be a drag on reported rev. and EPS.

• INVESTOR WORKSHOP TODAY. CP will host its earnings conf. call later this morning, followed by its analyst day presentations in the afternoon. Earlier this morning, CP guided to C08 EPS of C$4.70-$4.85, which at the midpoint is 3% below prior Consensus and 2%-3% below our downwardly revised estimate from last night. We will revisit our model following today’s meetings.

INVESTMENT CONCLUSION: CP is currently trading at 14.8x and 7.3x our downwardly revised U.S. dollar EPS and EV/EBITDAR estimates. This compares with its 1, 3, and 5-year averages of 15.3x, 14.3x and 13.5x and 8.6x, 7.7x and 7.3x. This is also roughly in-line with our Large Cap Rail Index excluding CP, which is currently trading at 15.0x and 7.3x.

We continue to be impressed with CP’s ability to grow volumes this year when the other rails have not been able to do so. We also remain impressed with management’s continued evolution to a culture of cost improvement. That said, EPS growth has slowed this year despite increased volume growth and into reduced productivity measures (speed, dwell, etc.). We expect continued pressure on CP’s earnings over the intermediate term from 1) the relatively weak U.S. dollar, 2) contractual down y-o-y Elk Valley coal pricing during C08 and early C09, and 3) the likely ramp-up of its build-in to the Powder River Basin at some point towards the end of C08 or C09. At current high end historical valuations and facing these EPS headwinds, we remain on the sidelines with a Peer Perform rating.

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Minister responsible for Canada Post tables an amendment to the Canada Post Corporation act

Posted by | Oct 29, 2007 | |

The Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, today tabled a key amendment to the Canada Post Corporation Act that would permit letter exporters to collect letters in Canada for transmittal and delivery outside Canada. Until now, Canada Post was the only corporation legally entitled to this privilege.

“The Government of Canada is committed to fair, transparent and accountable governance,” said Minister Cannon. “This amendment is intended to facilitate more competitiveness for companies within the mail industry worldwide and further facilitate the growth of the outbound international mail market in Canada.”

The proposed amendment to the Canada Post Corporation Act adds an exception to Canada Post’s exclusive privilege under Section 15 for letters intended for delivery to an addressee outside Canada.

The Canada Post Corporation is a Crown corporation and one of the largest employers in Canada. It serves approximately 33 million Canadians, and more than one million businesses and public institutions. In 2006, Canada Post employees delivered 11.6 billion pieces of mail to more than 14 million addresses in Canada.

The Canada Post Corporation Act, which came into effect in 1981, regulates mail services in Canada.

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Ottawa seeks to end Canada Post's foreign monopoly

Posted by | Oct 29, 2007 | |

The Canadian government on last Monday 29th proposed stripping state-owned Canada Post of its monopoly to collect letters for delivery abroad but there is no guarantee the move would succeed.

The proposal would have to be approved by Parliament, where the ruling Conservatives only control a minority of seats. Debate on the matter is due to start later this week.

Transport Minister Lawrence Cannon, who is responsible for Canada Post, said the proposal was “intended to facilitate more competitiveness for companies within the mail industry worldwide and further facilitate the growth of the outbound international mail market in Canada”.

A spokeswoman for Cannon said she was not aware if there were any problems with Canada Post’s performance. No one from Canada Post was immediately available for comment.

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