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A look at North American equities that made notable moves in both directions

On the rise

Shares of Air Canada (AC-T) jumped over 3 per cent on Friday after it announced it more than doubled its seat sales in a chaotic summer as a rebound in travel allowed Canada’s largest airline to narrow its losses.

For the three months ending on Sept. 30, Air Canada lost $508-million, or $1.42 a share, compared with a loss of $640-million ($1.79) in the same period of 2021, Air Canada said on Friday.

Revenue for the period totaled $5.3-billion, up from $2.1-billion in the third quarter of 2021 and nearly matching the $5.5-billion mark set in the same period in 2019, before the pandemic grounded much of the world’s airlines and sent the industry into crisis.

In a statement accompanying the earnings release, Air Canada said it flew about 11.5 million passengers in the third quarter, and expects strong demand to persist.

“Air Canada’s solid third-quarter results stem from the ongoing restoration of our extensive network, an improved operational performance, our modern and efficient fleet, as well as leading products and services, and an incredible team of employees,” said Michael Rousseau, chief executive officer of Air Canada, in a press release.

- Eric Atkins

Imperial Oil Ltd (IMO-T) soared 9.1 per cent after it reported a jump in third-quarter profit and raised its dividend on Friday, boosted by higher energy prices as a result of tighter global supplies.

Oil companies are posting huge profits as crude supplies worldwide remain tight due to disruption from the war in Ukraine and moves to cut output during the COVID-19 pandemic.

While benchmark oil prices have recently cooled from 14-year peaks touched earlier in 2022, they were still more than 30 per cent higher year-over-year during the quarter.

Imperial, majority-owned by Exxon Mobil Corp, said net earnings rose to $2.03-billion, or $3.24 per share, in the three months ended Sept. 30, from $908-million, or $1.29 per share, a year earlier.

Over the last 18 months Canadian oil companies have focused on channeling bumper profits to shareholders. Imperial continued that theme on Friday, raising its quarterly dividend 29 per cent to 44 cents a share and announcing a $1.5-billion substantial issuer bid to buy back shares from investors.

“As of the end of the third quarter we have delivered record shareholder returns of C$5.1 billion this year, with more to come,” Chief Executive Brad Corson said on an earnings call.

The Calgary-based company also completed the $1.9-billion sale of XTO Energy Canada, which it joint-owned with Exxon, in the third quarter, and said it used the proceeds to reduce debt.

Imperial said its upstream production for the third quarter averaged 430,000 gross oil-equivalent barrels per day (boepd), slightly down from 435,000 boepd in the same quarter a year earlier.

The company also said its downstream quarterly refining throughput averaged 426,000 barrels per day (bpd), with capacity utilization of 100%, its highest in over 40 years.

Cogeco Communications Inc. (CCA-T) increased after reporting its net profit in the fourth quarter rose 9.1 per cent to $104.9 million on a boost in revenue.

The Montreal-based company says profit attributable to shareholders was the equivalent of $2.28 per diluted share, up from $2.03 per share or $96.2-million a year earlier.

Revenue for the three months ended Aug. 31 was up 14.7 per cent at $725.4-million compared to $632.6-million in the same period last year.

American telecommunications revenue increased by 32.2 per cent while Canadian telecommunications revenue was up 1.1 per cent.

Net capital expenditures and capital intensity were $223.5-million and 30.8 per cent, respectively, compared to $175.2-million and 27.7 per cent in the same period of the prior year, following accelerated network expansion activities in the U.S. and Canada.

Cogeco Communications CEO Philippe Jette says overall performance was in line with the company’s financial projections for fiscal 2022, despite the current challenging economic environment.

The company says it expects the combination of inflation, rising interest rates and longer delivery times to continue to put pressure on revenue and on the cost to deliver its services.

In a note, Desjardins Securities analyst Jerome Dubreuil said: “CCA’s 4Q FY22 financial results were slightly above expectations, but subscriber metrics missed the target, especially in the U.S.. This generates serious questions about the increasing competition in U.S. broadband and the specific impact of this trend in CCA’s U.S. footprint, which we believe will be addressed on tomorrow’s call. FY23 guidance was maintained.”

Fortis Inc. (FTS-T) gained as it reported its third-quarter profit rose compared with a year ago as its revenue also grew.

The power utility says its net income attributable to common shareholders totalled $326-million or 68 cents per diluted share for the quarter ended Sept. 30 compared with a profit of $295-million or 62 cents per diluted share a year earlier.

Revenue totalled $2.55-billion, up from nearly $2.2-billion in the third quarter of 2021.

On an adjusted basis, Fortis says it earned 71 cents per share, up from an adjusted profit of 64 cents per share a year ago.

The company also announced a $22.3-billion five-year capital spending plan, which it said is the largest in its history and $2.3-billion larger than its previous five-year plan.

Fortis is targeting annual dividend growth of four to six per cent through 2027.

Canfor Corp. (CFP-T) was higher despite seeing its net income drop by almost 60 per cent in the third quarter of 2022, largely due to a one-time inventory writedown from softening lumber prices.

The Vancouver-based company reported $87.4 million net income attributable to shareholders in the third quarter of 2022, or 71 cents per basic and diluted share, down from $210 million the same quarter last year, or $1.68 per share.

Revenues for the three months ended Sept. 30were $1.67 billion, barely changed from $1.68 billion a year earlier.

The company says the decline in income largely reflects a decline in lumber segment earnings, slightly offset by improved pulp and paper segment results.

Canfor says for the three and nine months ended September 30, 2022, an $89.6 million inventory writedown expense was recognized for the lumber segment.

Canfor Pulp Products Inc. (CFX-T) also rose as it saw sales go up to $308.3 million in the quarter, up from $298.9 million a year earlier, while net income was $16.3 million, up from $12.1 million.

Apple Inc. (AAPL-Q) on Thursday reported revenue and profit that topped Wall Street targets, one of the few bright spots in a tech sector battered by spending cutbacks due to inflation.

The forecast for the holiday quarter was more grim. While not providing specific numbers, Apple said revenue growth would fall below 8 per cent in the December quarter but did not go as far as, whose dire holiday outlook sent its shares down significantly

Apple shares initially dipped in after-hours trading but recovered, jumping over 7.5 per cent on Friday.

Tech wreck shows U.S. megacaps not immune to corrosive Fed tightening

The Cupertino, California-based tech giant was saved by its oldest technology, its laptop computers, while its star, the iPhone, stumbled.

Although iPhone sales were not as strong as some analysts had targeted, they were still a record for the September quarter. Mac sales of US$11.5-billion were far head of analyst estimates of US$9.36-billion.

Apple’s results showed some resilience in the face of a weak economy and strong U.S. dollar that has led to disastrous reports from many tech companies. Like Facebook parent Meta and Snap, Apple is seeing softness in advertising spending. Overall, Apple said quarterly revenue rose 8 per cent to US$90.1-billion, above estimates of US$88.9-billion, and net profit was US$1.29 per share, topping with the average analyst estimate of US$1.27 per share, according to Refinitiv data.

“We did better than we anticipated, in spite of the fact that foreign exchange was a significant negative for us,” said Chief Financial Officer Luca Maestri.

The rising U.S. dollar has hit many companies such as Apple that generate substantial foreign revenue and are getting less cash back when they convert it. For consumers, it increases the price of new devices when bought in countries outside of the United States.

“Like other major tech companies, even Apple is suffering from the negative impact of a worsening macro backdrop and ongoing supply chain woes, though it has done a better job of navigating through the challenging environment,” Jesse Cohen, senior analyst at

In China, which has experienced a sharp economic slowdown, Apple reported fourth-quarter sales of US$15.5-billion. That is a gain from the prior quarter, when Apple logged sales of US$14.6-billion.

Apple said it now has 900 million paying subscribers to its services, up from the previous quarter’s 860 million.

Chipmaker Intel Corp. (INTC-Q) on Thursday cut its full-year profit and revenue forecast and Chief Executive Pat Gelsinger, asked about potential layoffs, told Reuters “people actions” would indeed be part of a cost reduction plan.

Intel shares gained 10.7 per cent on Friday, providing a bright spot on a rough week for the technology sector. They had slumped roughly 47 per cent so far this year, underperforming both the S&P 500 index and the Philadelphia SE Semiconductor index.

In its earnings release Intel said it was focused on driving US$3-billion in cost reductions in 2023. It also cut its capital spending forecast for this fiscal year to US$25-billion from a previous forecast of US$27-billion.

“The amount that we can do with respect to people costs is a minority of our overall cost structure. So driving efficiency in the factory network is way more important to our economics than people cost,” Mr. Gelsinger told Reuters, adding that adjustments of flexible workforces can be “quite immediate.”

The adjustments would start in the fourth quarter, he said, but did not specify how many employees would be affected.

Intel had 110,600 employees in late 2020, right before Mr. Gelsinger took the helm. That ballooned to 131,500 by early October this year.

A slump in PC demand and recession fears have muddied the outlook for the data center market, both big markets for Intel.

Intel’s “PC Client business was the silver lining as sales grew sequentially giving investors some hope that share loss has moderated materially,” said Summit Insights Group analyst Kinngai Chan.

Revenue from the client computing group, which accounts for Intel’s PC sales, rose to US$8.1-billion in the third quarter from US$7.7-billion in the second.

The company now expects 2022 annual revenue of about US$63-billion to US$64-billion, compared with US$65-billion to US$68-billion estimated earlier. Its original forecast was for about US$76-billion. Analysts on average expected annual revenue of US$65.26-billion, according to Refinitiv data.

Intel trimmed its full-year adjusted earnings per share forecast to US$1.95 from US$2.30.

Exxon Mobil Corp. (XOM-N) hit a new record high in premarket trading after it smashed expectations as soaring energy prices fueled a record-breaking quarterly profit, nearly matching that of tech giant Apple.

Its US$19.66-billion third-quarter net profit far exceeded recently raised Wall Street forecasts as sky-rocketing natural gas and high oil prices put its earnings within reach of Apple’s US$20.7-billion net for the same period.

As recently as 2013, Exxon ranked as the largest publicly traded U.S. company by market value - a position now held by Apple.

Oil company profits have soared this year as rising demand and an under-supplied energy market collided with Western sanctions against Russia over its invasion of Ukraine. U.S. exports of gas and oil to Europe have jumped and promise to set all-time profit records for the industry.

The top U.S. oil producer reported a per share profit of US$4.68, exceeding Wall Street’s US$3.89 consensus view, on a huge jump in natural gas earnings, continued high oil prices and strong fuel sales.

Exxon, which led record gains by the five producers known as oil majors in the prior quarter, pulled far ahead of peers Shell and TotalEnergies with third-quarter profits almost twice as big. Its gains were aided by its highly criticized decision to double down on fossil fuels as European competitors shifted to renewables.

“Our investments over the past five years, including through the lows of the pandemic, are really driving our results today,” Chief Financial Officer Kathryn Mikells told Reuters.

Chevron Corp. (CVX-N) was up in the wake of reporting its second-highest ever quarterly profit before the bell, blasting past analysts’ estimates, driven by soaring global demand for its oil and gas and rising production from its U.S. oilfields.

The surge comes as oil companies book mounting profits with prices near record levels and supplies tight on output cuts during the COVID-19 pandemic, as well as market disruption from the war in Ukraine.

Chevron posted a third-quarter net profit of US$11.2-billion, or US$5.78 per share - almost double the US$6.1-billion from the same period last year, and well ahead of Wall Street’s US$4.86 estimate.

The results will back higher project spending and increased oil and gas production next year, Chief Financial Officer Pierre Breber told Reuters. That production was roughly flat last quarter on contract expirations in Asia.

U.S. oil executives have been loath to crow about this year’s earnings gains - surpassing the once-sizzling tech sector - preferring to emphasize investment commitments. But soaring profits are feeding criticism in the United States and Europe as inflation climbs.

The company’s cash flow from operations soared to a record US$15.3-billion, far higher than the previous quarter. Chevron’s return on capital employed - a measure of how much it earns from each dollar invested in the business - jumped to 25 per cent.

“We delivered another quarter of strong financial performance,” Chevron Chief Executive Michael Wirth said in a prepared statement, noting its oil and gas production in the top U.S. shale field reached “another quarterly record.”

Output from the U.S. Permian basin topped 700,000 barrels of oil equivalent per day (boed), up 12 per cent from a year ago and above the second quarter’s 692,000 boed. But global production in the first nine months of the year is down by about 100,000 boed from the 3.093 million boed from the same period last year.

Chevron reaffirmed its goal of pumping 1 million bpd in the top U.S. shale oil field in 2025, and achieve a 3-per-cent annual growth rate compounded between 2023-2026 for its overall output.

On the decline

After a significant overnight decline that erased about US$140-billion in its market capitalization, greater than the entire value of companies such as Morgan Stanley, Netflix and Lockheed Martin, Amazon (AMZN-Q) continued to fall, closing down 7 per cent, as it forecast a slowdown in sales growth for the holiday season, disappointing Wall Street and warning that inflation-wary consumers and businesses had less money to spend.

For months, the world’s biggest online retailer has fought against troubling macroeconomic tides. It hosted not one, but two cornerstone sales events in a year: Prime Day in July, and the Prime Early Access Sale this month.

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For the summer event, it sold more items than ever before to its Prime loyalty shoppers, and, meanwhile, the company sought revenue from higher Prime subscription fees and a surcharge on some merchants.

Net sales were US$127.1-billion in the third quarter that ended Sept. 30, still a little lower than the US$127.5-billion analysts expected, according to IBES data from Refinitiv.

But the macro outlook has not brightened. In a call with reporters, Amazon Chief Financial Officer Brian Olsavsky said the company was bracing for slower economic growth.

“We are seeing signs all around that, again, people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues,” he said. “We are preparing for what could be a slower growth period, like most companies.”

Amazon forecast net sales of between US$140-billion and US$148-billion, or growth as little as 2 per cent from a year earlier. Analysts were expecting $155.2 billion.

Prior holiday quarter sales growth was 9 per cent in 2021 and 38 per cent in 2020.

Results in the tech industry were just as poor this week for cloud-computing rivals Microsoft Corp (MSFT-Q) and Alphabet Inc’s Google (GOOGL-Q), adding to recession fears. U.S. consumer confidence did a U-turn in October.

Tech wreck shows U.S. megacaps not immune to corrosive Fed tightening

“Big tech companies are not impervious to slowdowns in the economy, particularly if they are consumer driven,” said Rick Meckler, partner at Cherry Lane Investments in New Jersey.


With files from staff and wires

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