Canadian Growth Offsets U.S. Writedowns

Article Excerpt

ROYAL BANK OF CANADA $50 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $65.0 billion; SI Rating: Above average) earned $0.92 a share in its third fiscal quarter ended July 31, 2008, down 13.2% from $1.06 a year earlier. The drop is largely due to writedowns of bad loans at its U.S. banking operations, plus securities tied to U.S. subprime mortgages. However, if you disregard all unusual items, Royal earned $1.12 a share in the latest quarter, exceeding the consensus estimate of $1.07. This was mostly due to gains for Royal’s Canadian retail banking, where profit surged 19%. The bank’s wealth management and insurance businesses also reported strong earnings growth. Revenue grew 7.9%, to $5.9 billion from $5.4 billion. Royal Bank is a buy. buy…