A roundup of some of the North American equities making moves in both directions today
On the rise
After becoming the first major cannabis company to turn a profit, Aphria Inc. (APHA-T) jumped over 40 per cent on Friday.
On Thursday, the company reported fourth-quarter net revenue of $128.6-million, an increase or 969 per cent from $12-million a year earlier. The Street was expecting $107.4-million.
Its quarterly profit of 5 cents per share blew past the consensus analyst projection of a 6-cent loss.
Haywood Securities analyst Neal Gilmer said: "Aphria reported very impressive Q4/19 results, highlighted by strong cannabis sales growth and a return to positive EBITDA for the company. We believe these strong results will help restore some investor confidence based on solid operational execution and visibility towards further growth."
“We remain positive on Aphria and believe the strong Q4 results will reverse the downward trend in the share price and restore investor trust. The shares traded up sharply in the after-market once the results were released and we look for that momentum to build over the course of the next couple of quarters.”
Restaurant Brands International Inc. (QSR-T) rose 5.9 per cent after its quarterly profit beat analysts’ expectations on Friday, as more diners visited its Burger King outlets, and investments made in international expansion paid off.
On an adjusted basis, the company earned 71 cents per share, while analysts on average had estimated 65 cents.
The company reported adjusted EBITDA and earnings per share of $765-million and 66 cents, respectively, exceeding the Street’s projections of $714-million and 56 cents.
Credit Suisse analyst Andrew Kuske said: “On balance, the beats should be viewed positively, however, the Q2 results contain ‘a lot of little things’ that don’t provide a consistent directional view with high conviction for parts of the business. Ultimately, we view PPL’s footprint as being advantaged with enviable and sustainable growth. Given the long cycle nature of our coverage universe, we do not place undue emphasis on quarterly results.”
Redwood manufactures, markets and distributes hemp-derived cannabidiol (CBD) infused skincare and other consumer products in the United States under the Lord Jones brand.
TransAlta Corp. (TA-T; TAC-N) was up 0.8 per cent after it announced agreements with Capital Power Corp (CPX-T) to swap their respective non-operating interests in the Keephills 3 facility and the Genesee 3 facility.
As a result of the transaction, TransAlta will own 100 per cent of the Keephills 3 facility and Capital Power will own 100 per cent of the Genesee 3 facility. “
Capital Power shares slipped 0.9 per cent.
Pinterest Inc. (PINS-N) jumped 18.2 per cent after the online scrapbook company raised its full-year sales forecast and reported second-quarter revenue above estimates.
RBC Dominion Securities analyst Mark Mahaney said he was “clearly impressed,” adding: “Did you know? .. .that every major Net Advertising company (GOOGL, FB, AMZN, SNAP, TWTR, PINS) had accelerating Ad Revenue growth in Q2?! ... Anyway, we see PINS as addressing a very large market opportunity, as a leading player with scale, as providing a strong value proposition to both consumers & advertisers ... as having a clear path to profitability, and as benefitting from several long-term growth drivers. Our investment concerns relate to competition, uncertainty around vertical expansion, but primarily valuation – with PINS currently trading at an intrinsically high 13X EV/Sales on 2020. Accelerating 62-per-cent year-over-year Revenue Growth with 70-per-cent GM’s certainly deserve a very premium multiple … and PINS has one.”
Shares of CannTrust Holdings Inc. (TRST-T) reversed course and rose 4.5 per cent amid news the Ontario Securities Commission has opened an investigation into the company after revelations it was growing cannabis without a licence.
On the decline
Enbridge Inc. (ENB-T) slipped 0.3 per cent after announcing it would invite bids for contracted space on its Mainline system, in the face of opposition from some oil shippers who worry the changes could disadvantage small producers.
Separately, the company said its adjusted earnings rose to $1.35-billion, or 67 cents per share, in the second quarter ended June 30 from $1.09 billion, or 65 cents per share, a year earlier.
Analysts on average were expecting 59 cents per share.
Barrick Gold Corp. (ABX-T) slid 0.5 per cent after it said on Friday the National Court of Papua New Guinea has ruled that the miner can continue to operate the Porgera gold mine, while the country’s government considers an application to extend the lease for the mine.
Imperial Oil Ltd. (IMO-T) lost 3.8 per cent higher despite missing estimates for quarterly profit on Friday, as expenses rose and it refined less crude due to maintenance work at one of its refineries.
Production and manufacturing expenses rose 4.2 per cent, while capital and exploration expenditure surged over 50 per cent.
Excluding items, the company earned 71 cents per share. Analysts’ on average had expected a profit of 79 cents.
Open Text Corp. (OTEX-T) slipped 8.8 per cent on the heels of weaker-than-anticipated quarterly results.
Citi analyst Walter Prichard said the tech company maintained its “steady state” but fell short of “elevated” growth expectations, particularly in license and cloud revenue.
“All profitability metrics maintained best in class status, despite top-line weakness,” he said. “This had support from recurring revenue, which was essentially in-line and helped to drive Q4 adjusted EBITDA that was 38 per cent, in-line with Cons. expectations. Operating CF of $230-million also came in ahead of expectations.”
Fortis Inc. (FTS-T) sat down 0.3 per cent after saying Friday the sale of its share of a B.C. hydroelectric project helped boost its second-quarter profit to $720-million — nearly three times what it had in the same period last year.
However, adjusted earnings and revenue for the Newfoundland-based company were below analysts’ estimates.
Adjusted EBITDA was up 5 per cent to US$11.6 million. Profit came in at US$4-million, which was better than expectations of US$3.3-million and compared to US$4.3-million a year earlier.
After its quarterly results fell short of expectations on the Street, Rogers Sugar Inc.’s (RSI-T) shares fell 5.3per cent.
On Thursday after the bell it reported revenue of $191.4-million for its third quarter ended June 29 versus $199-million a year earlier. Analysts were expecting revenue to come in at $200.8-million in the latest quarter. Adjusted EBITDA was $18.7-million down from $20.3-million a year earlier, the company said.
Desjardins Securities’ Frederic Tremblay said: “3Q FY19 results were below expectations, largely due to increased competition and short-term challenges associated with ongoing footprint optimization initiatives in the maple products business. While the core sugar business looks robust, the maple division has consistently missed our and management’s expectations (the segment’s FY19 adjusted EBITDA guidance was reduced again).”
Exxon Mobil Corp. (XOM-N) dropped 1 per cent after it reported a 21-per-cent drop in quarterly profit on Friday, hit by weaker natural gas prices, lower refining profits and a loss in its U.S. chemicals business.
The largest U.S. oil producer’s net income fell to US$3.13-billion, or 73 US cents per share, in the second quarter, from US$3.95-billion, or 92 US cents per share, last year.
Analysts had expected Exxon to report earnings of 66 US cents per share, according to data from Refinitiv. Analysts sharply lowered their expectations after the company disclosed weaker results last month, and had expected Exxon to earn 97 US cents a share early in July.
Chevron Corp. (CVX-N) slipped 0.1 per cent after it reported a 26.3-per-cent rise in quarterly profit on Friday, as higher production more than offset lower crude oil and natural gas prices and a rise in expenses.
The No. 2 U.S. oil and natural gas producer’s daily production of oil and gas rose 9.1 per cent to 3.08 million barrels.
Horizon North Logistics Inc. (HNL-T) plummeted 16.8 per cent after it reported second-quarter revenue of $104.6-million up from $93.6-million a year ago. Its net loss came in at $10.6-million or 6 cents per share compared with a loss of $3.4-million or 2 cents a year ago.
Analysts were expecting revenue of $113.5-million and a loss of 2 cents per share.
Raymond James analyst Andrew Bradford said: “Horizon North faced a perfect storm of significantly lower activity in Canada’s oil & gas sector combined with the ever common construction project delay. With these factors at play, its 2Q19 results fared far worse than consensus expectations.”
With files from Brenda Bouw, staff and wires