A look at North American equities that moved in both directions
On the rise
On an earnings call with investors, CEO Matt Proud said that the largest cost the company had is people, so it would be “letting people go”.
Dye & Durham has employees spread across four countries, including Ireland, Britain and Australia.
In an interview with The Globe before the earnings announcement, Mr. Proud said he realized, in recent months, that full-time, in-person work was a prerequisite for “building a better business.”
“We tried soft pushes to get people back in. It did not work. Innovation does not take place when people are hiding behind computer screens,” he said. “The reality was, half our office was empty.”
The company reported revenue of $120.2-million for its fiscal first quarter ended Sept. 30, which it said was an increase of 7 per cent, from the same period in the prior year. The expectation was for revenue to come in at $122.7-million, according to S&P Capital IQ.
The company said its net loss of $11.5-million was a decrease of $33.6-million versus a year ago.
The company also said it’s withdrawing its 2023 adjusted EBITDA target for the 12-month period ended June 30, 2023, “given the deteriorating macro-economic trends which are resulting in a lower number of real estate transactions in the markets the company operates.”
On Friday, several analysts on the Street cut their targets for the company’s shares.
- Vanmala Subramaniam and Sean Silcoff
Aurora Cannabis Inc. (ACB-T) jumped 15.8 per cent after its chief executive insisted his company was on track to meet its profitability target even as it recorded a $51.9-million net loss and saw consumer pot net revenue fall 28 per cent from a year ago.
“This will be an incredible achievement, which will also be sustainable,” said Miguel Martin, on a Thursday call with analysts.
“We look forward to demonstrating consistent financial performance in the coming quarters.”
His Edmonton-based cannabis company has said it will reach profitability based on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by Dec. 31.
The company’s adjusted EBITDA loss for its first quarter, the period ended Sept. 30, totalled $8.7-million compared with $11-million a year ago.
Aurora’s path to profitability has involved a restructuring and several rounds of layoffs and facility closures over the last three years as it contended with shifting COVID-19 measures and grappled with aligning supply with demand.
Also making profitability tough is the extreme level of competition in the cannabis market, which has included a soaring number of cannabis stores in Ontario and licensed producers relying on promotions and price reductions to draw in customers.
The average price for cannabis was $11.78 per gram at the start of 2019, shortly after legalization, but fell to $7.50 per gram in 2021, a November report from Deloitte Canada and cannabis research firms Hifyre and BDSA said.
Aurora intends to amp up production at the company by converting one of its previous pot facilities, Aurora Sky, for orchid and vegetable propagation with “minimal capital investment,” Martin said.
His remarks came as Aurora recorded a $51.9-million net loss in its first quarter compared with a net loss of $11.9 million for the same period in the prior year.
Its consumer cannabis net revenue for the period ended Sept. 30 amounted to $13.7-million, up from $12.6-million in its prior quarter, but down 28 per cent from $19.1-million in the first quarter.
Trican Well Service Ltd. (TCW-T) rose after it reported third-quarter revenue of $258.3-million, a 57-per-cent increase compared to the year-ago period. The expectation was for revenue of $260.5-million.
Profit came in at $38.2-million or 16 cents per share, ahead of expectations of 11 cents and compared to a profit of $9.1-million or 4 cents per share a year ago.
Before the bell, ATB Capital Markets analyst Waqar Syed said: “TCW was an outperformer last year, given its market leadership, but it has lagged this year, as last year’s underperformers have caught up. We believe that, owing to TCW’s Q3/22 EBITDA beat and management’s comments about further market improvement in 2023, consensus estimates should be revised higher, which should be a stock catalyst.”
Emera Inc. (EMA-T) increased after saying it is putting capital spending on clean energy projects in Nova Scotia on hold as it works through the consequences of the Nova Scotia government’s imposed rate cap on the parent company of Nova Scotia Power.
In a conference call to discuss the power utility’s latest financial results, Emera chief executive Scott Balfour said Friday that while the company will continue to make investments in safety and reliability of its network, it won’t be able to spend on other projects in the province due to the cap.
“The last capital plan included $500 million in planned investment in the Eastern Clean Energy Initiative, including the Atlantic Loop, to fund new wind generation, transmission, infrastructure upgrades and battery storage to help facilitate the transition away from coal-fired generation,” he said.
“Given the restrictions imposed by Bill 212, these cleaner energy investments have been forced to be put on hold as our capital investments at Nova Scotia Power are now required to only focus on maintaining system reliability.”
The company had applied for a nearly 14-per-cent rate hike over two years with the provincial regulator earlier this year, but the province stepped in and passed legislation to limit the power rate increase to 1.8 per cent over the next two years, excluding increases linked to fuel costs.
The comments by Emera came as it reported a third-quarter profit of $167 million or 63 cents per share compared with a loss of $70 million or 27 cents per share in the same quarter last year.
Operating revenue totalled nearly $1.84 billion for the quarter ended Sept. 30, up from nearly 1.15 billion in the same quarter last year.
On an adjusted basis, Emera said it earned 76 cents per share in its latest quarter, up from an adjusted profit of 68 cents per share in the third quarter of 2021.
Balfour said the growth in the company’s earnings was principally driven by continued strong performance from its utilities in Florida.
Onex Corp. (ONEX-T) closed higher on news founder Gerry Schwartz is handing over control of the alternative asset manager, which announced a plan on Friday to name Bobby Le Blanc as chief executive officer after the company’s next annual meeting.
Mr. Le Blanc is taking over after 23 years at Onex, having served as president since 2020. He joined Onex in 1999 from Berkshire Hathaway Inc.
Mr. Schwartz will stay on as founder and chairman, and “will remain closely involved” with Onex, according to a statement the company released Friday.
He also plans to keep control of the company as sole holder of Onex’s multiple voting shares for five more years. Those shares will need to be amended through a shareholder vote to keep their authority after Mr. Schwarz, 80, leaves the CEO’s job. But the company is proposing to add a five-year sunset provision that would set an expiry date on Mr. Schwarz’s control over it.
The proposal has been approved by Onex’s board, following a recommendation of a special committee. Shareholder approval will be sought at the company’s annual general meeting in 2023.
The succession plans came as Onex, which keeps its books in U.S. dollars, reported a loss of US$180-million or US$2.12 per diluted share for the quarter ended Sept. 30.
The loss compared with a profit of US$602-million or US$6.76 per diluted share in the same quarter last year.
Onex has US$47.2-billion in assets under management, including US$7.6-billion of its own investing capital.
- James Bradshaw
Quebec-based Héroux-Devtek Inc. (HRX-T) was up 6 per cent after releasing better-than-anticipated quarter results before the bell.
The aerospace landing gear manufacturer reported sales of $132.7-million for its second quarter ended Sept. 30, up from $131.3-million a year ago and ahead of expectations of $123.6-million.
Net income of $4.8-million or 14 cents per share compared to $7.5-million or 21 cents a year ago. Adjusted EPS was 10 cents per share in the latest quarter.
In a research note, Desjardins Securities analyst Benoit Poirier said: “HRX reported slightly positive 2Q FY23 results, despite an operating environment that remained unstable given planned shutdowns, summer vacations, COVID-19-related absenteeism, labour shortages in the aerospace industry and increased lead times for the procurement of raw material, as well as high inflation.”
On the decline
Algonquin Power & Utilities Corp. (AQN-T) plummeted 19.3 per cent after it reported a US$195.2-million loss in its latest quarter and cut its financial guidance for the year.
The power utility says it lost 29 US cents per share for the quarter ended Sept. 30 compared with a loss of US$27.9-million or 5 US cents per share in the same quarter last year.
Revenue totalled US$666.7-million, up from US$528.6-million a year earlier.
On an adjusted basis, Algonquin says it earned 11 US cents per share in its latest quarter compared with an adjusted profit of 15 US cents per share in its third quarter of 2021.
In its outlook, the company says it now expects adjusted net earnings per share for 2022 in a range of 66 US cents to 69 US cents compared with earlier expectations for between 72 US cents and 77 US cents.
Algonquin says it updated its guidance due to higher interest rates and inflation, delays in the construction and completion of some of its renewable energy projects, and anticipated delays in connection with certain rate decisions.
Hydro One Ltd. (H-T) was lower after it reported a third-quarter profit of $307-million, up from $300-million in the same quarter last year.
The power utility says the profit amounted to 51 cents per diluted share for the quarter ended Sept. 30.
The result compared with a profit of 50 cents per diluted share in the third quarter of 2021.
Revenue for the quarter totalled $2.03-billion, up from $1.91-billion in the same quarter last year.
Revenue, net of purchased power, was $1.07-billion, up from $980-million a year ago.
Hydro One is Ontario’s largest electricity transmission and distribution provider.
Thomson Reuters Corp. (TRI-T) dipped in afternoon trading after it said on Friday it would buy SurePrep LLC, a U.S.-based provider of tax automation software and services, for US$500-million in cash.
The information company has been partnering since April with 20-year-old SurePrep, whose products and solutions are used by more than 23,000 tax professionals.
SurePrep is projected to generate about US$60-million in revenue in 2022 and is expected to grow more than 20 per cent annually in the next few years.
“This transaction builds on our existing partnership/reseller arrangement to deliver our vision of end-to-end tax automation that solves our customers’ biggest pain points,” said Dave Wyle, Chief Executive of SurePrep.
Thomson Reuters, which is the parent of Reuters News, expects the deal to close in the first quarter of 2023.
Saputo Inc. (SAP-T) fell after seeing its net earnings rise by 48 per cent in its fiscal 2023 second quarter ended Sept. 30.
The Montreal-based company reported net earnings of $145-million or 35 cents per diluted share, up from $98-million or 24 cents per diluted share in the same quarter last year.
Revenues rose to $4.46-billion from $3.69-billion a year earlier, an increase of 21 per cent.
The company says its increased revenue was due to higher prices Saputo implemented across all its sectors, higher average block cheese and butter prices in the U.S., and higher international cheese and dairy ingredient market prices.
The company says it was able to successfully offset the cost of rising inflation through price increases.
Adjusted net earnings were $177-million in the second quarter, up from $116-million a year earlier, while the adjusted net earnings margin rose to four per cent from 3.1 per cent.
With files from staff and wires