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A roundup of some of the North American equities making moves in both directions today

On the rise

Shares of Coca-Cola Co. (KO-N) rose 1.9 per cent on Friday after the drinks giant posted better-than-expected sales in the most recent quarter as customers took to smaller-sized cans of its sodas, including Coca-Cola Zero Sugar, prompting the beverage maker to give an upbeat forecast for 2019.

Faltering demand for sugary drinks has forced the world’s two largest beverage makers, Coca-Cola and PepsiCo Inc., to roll out low-sugar drinks, while diversifying into coffee, tea and bottled waters to boost sales.

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Volume in sparkling soft drinks rose 2 per cent in the quarter, driven by double-digit percentage growth in Coca-Cola Zero Sugar and Sprite in North America.

Strong growth was also seen in its smaller package drinks, led by double-digit growth in 7.5-ounce mini-cans.

Organic revenue, that excludes the impact of currency fluctuations, acquisitions and divestitures, climbed 5 per cent during the quarter, above the average analyst estimate of 4.3 per cent, according to five analysts polled by Refinitiv.

“We were very impressed with Coca-Cola’s better-than-expected topline,” Wells Fargo analyst Bonnie Herzog said.

Railroad operator Kansas City Southern (KSU-N) jumped 7.3 per cent after reporting a better-than-expected quarterly profit, helped by an increase in refined fuel shipments to Mexico and ongoing cost cuts.

“We have a positive outlook for the rest of the year,” Chief Executive Officer Patrick Ottensmeyer said on a conference call with analysts.

The results come as the railroad industry is seeing volumes fall amid competition from low-priced, long-haul truckers and U.S. President Donald Trump’s tariff spats with key trade partners like China and Mexico.

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On the decline

Gildan Activewear Inc. (GIL-T) shares dropped over 25 per cent after it cut its 2019 forecast after warning of lower third-quarter results on weaker demand for imprintable apparel in North America and abroad.

Gildan said it expects earnings will decrease about 7 per cent to 51 US cents a share share for the three-months ended Sept. 29 and about 53 cents on an adjusted basis. Sales are expected to fall 2 per cent to about US$740-million.

For the year, Gildan is now expecting 2019 sales to be down low single digits from 2018 and diluted earnings per share to be US$1.50 to US$1.55 and adjusted EPS of between US$1.65 and US$1.70 per share.

In reaction to the announcement after market close on Thursday, several equity analysts downgraded their ratings for Gildan shares.

Corus Entertainment Inc. (CJR.B-T) dropped 10.1 per cent after it reported fourth-quarter revenue of $377.5-million which was below expectations of $379.2-million and compared to $379.1-million last year.

Net income was $22.9-million or 11 cents per share down from $33.7-million or 16 cents per share last year. Adjusted net income came in at $27.9-million or 13 cents per share versus adjusted net income of $39.5-million or 19 cents per share a year ago. Analysts were expected adjusted EPS of 12 cents in the latest quarter.

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Shares of Johnson & Johnson (JNJ-N) slid 6.2 per cent after it said on it would recall a single lot of its baby powder in the United States after the Food and Drug Administration found trace amounts of asbestos in samples taken from a bottle purchased online. The recall is limited to one lot of Johnson’s Baby Powder produced and shipped in the United States in 2018, the company said.

J&J also said it has started an investigation and is working with health regulators to determine the integrity of the tested sample as well as the validity of test results.

The FDA test indicated the presence of no greater than 0.00002 per cent of chrysotile asbestos in the tested sample, the company said.

American Express Co. (AXP-N) was down 2 per cent despite the credit-card issuer reporting a 6-per-cent rise in third-quarter profit, as more people used cards to shop, pay bills and make big ticket purchases.

Net income rose to US$1.76-billion, or $2.08 US per share, in the quarter ended Sept. 30, from US$1.65-billion, or US$1.88 per share, a year earlier, the company said. Total revenue, excluding interest expense, rose 8 per cent to US$11-billion.

With files from Terry Weber, Brenda Bouw and wires

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