A roundup of some of the North American equities making moves in both directions today
On the rise
Transat A.T. Inc. (TRZ-T) was up 6.1 per cent on Friday after Quebec billionaire Pierre Karl Péladeau confirmed he’s joining several other local buyers expressing interest in the struggling holiday travel company.
Mr. Péladeau, chief executive and controlling shareholder of Quebecor Inc. (QBR-B-T), confirmed on Thursday that he has hired an investment banker to advise him on a potential offer.
TMX Group Ltd. (X-T) was up 7.6 per cent after reporting a quarterly profit that topped expectations on Thursday after market close.
At the same time, the company announced that subsidiary Trayport Ltd would acquire Vienna-based VisoTech, a European short-term energy trading solutions provider.
“The addition of VisoTech to TMX Group fits squarely within our growth strategy, enabling us to augment our global energy business with new innovative products and client solutions, while continuing to increase the portion of our revenue derived from recurring sources,” Chief Executive Lou Eccleston said in a press release.
On Thursday after the bell, the Vancouver-based company announced revenues increased by $9.4 million to $73.2-million, or 15 per cent over the same period last year. Analysts had expected $65.4-million.
Its net loss from continuing operations was $3-million or 2 cents per share versus a loss of $12.6-million or 10 cents a year earlier. The consensus forecast was a 4-cent loss.
H.C. Wainwright analyst Amit Dayal said: “Westport’s revenue and margin strength for the quarter was a positive surprise after we had to temper our 2019 expectations post the 4Q18 results. We believe the company is now seeing stronger momentum with HPDI 2.0 sales, which partly supported the stronger results for the quarter. The company also benefited from stronger-than-expected contribution from CWI in the quarter. Though we believe this momentum could be sustained into the remainder of the year,management remained, in our opinion, conservative with its guidance,maintaining it at prior levels, for annual revenues to range between $265M and $295M."
BMO Nesbitt Burns analyst Thanos Moschopoulos said: “We believe SaaS [software as a service] revenue is the key metric most investors are focused on. While FY2019 SaaS revenue guidance is coming down by $1.9-million, we note that $0.7-million of the incremental term licence revenue guidance would likely have been recognized in FY2019 as pure subscription revenue under Kinaxis’ prior accounting — implying the SaaS revenue guidance reduction is, effectively, more modest than it might appear. Nonetheless, the fact that Kinaxis is trimming SaaS revenue guidance this early in the year likely won’t be helpful in allowing the stock to close its current roughly 2-point CY2020E EV/sales valuation discount to the SaaS group.”
Sierra Wireless, Inc. (SW-T) sat 8 per cent higher after its first-quarter revenue exceeded expectations.
Raymond James analyst Steven Li said: “SWIR is pivoting towards a stronger business model (more recurring services, higher margin). This fiscal year is a substantial investment year for them (Ready-to-Connect solutions roll-out, Services investment) but unfortunately those investments do not do anything for F2019. 1Q19 was in-line to slightly better and our forecasts are moving up slightly as a result. We find valuation still inexpensive given the recent Telit transaction.”
Adjusted earnings rose to $1.64-billion in the first quarter ended March 31, from $1.38-billion in the year-ago quarter.
On an adjusted per share basis, the company earned 81 cents. Analysts’ on average had expected 72 cents.
“We’re very pleased with our strong start to 2019,” said president and CEO Al Monaco in a statement. "Operationally, all of our systems are running well and near capacity. In fact, we hit record throughput levels this quarter on the Liquids Mainline System. In addition, our gas transmission systems were in high demand given the colder weather we experienced in our franchises this winter, and the Ontario gas utility business hit record dispatch days in January and February. We also benefited from strong margins in our Energy Services business this quarter.
“This strong operating performance, in combination with new projects that came into service this past year, drove record EBITDA in the first quarter, although the Line 3 in-service delay to 2020, relative to our full year 2019 budget, will offset this first quarter strength. Our 2019 DCF guidance range is unchanged at $4.30 to $4.60 per share.”
Nutrien Ltd. (NTR-T) was up 2.8 per cent despite its first-quarter results, released Thursday after the bell, fell short of the Street’s expectations.
The Saskatoon-based fertilizer company reported adjusted earnings per share of 20 US cents, which fell short of the analysts’ 25 US cent projection.
Credit Suisse analyst Christopher Parkinson said: “We view this release as neutral as 1Q weakness was well expected by investors, and NTR’s full-year outlook / capital allocation stories are unchanged.”
On the decline
It could lead to the Montreal-based transportation giant being blacklisted from projects funded by the international financial institution.
Credit Suisse analyst Andrew Kuske said: “Needless to write, that outcome should be viewed as extremely disappointing and, in our view, evidence that sufficient bids for the totality of KML were not made in the view of the board. In our view, KML now faces two overhangs: (1) inferred from the lack of a transaction is the bids were too low that exerts likely downward pressure on the stock; and, (2) KML potential use of the pristine balance sheet to acquire something (other than KML shares) is another aspect of uncertainty. With these issues, we downgrade the stock.”
“Looking ahead to the rest of the year, we expect gradual easing of supply constraints as the year progresses while recognizing that we remain in a high demand environment for equipment with high utilization rates, a reflection of the resurgent U.S. economy,” said CEO Ravi Saligram. “We remain positive about delivering strong earnings growth in the remainder of 2019.”
With files from staff and wires