A roundup of some of the North American equities that made moves in both directions
On the rise
Gilead Sciences Inc. (GILD-Q) shares surged 9.7 per cent on Friday following a media report detailing encouraging partial data from trials of the U.S. company’s experimental drug remdesivir in severe COVID-19 patients.
A University of Chicago hospital participating in a study of the antiviral medication said it is seeing rapid recoveries in fever and respiratory symptoms, with nearly all patients discharged from the hospital in less than a week, according to medical news website STAT.
Gilead, in an emailed statement, said “the totality of the data need to be analyzed in order to draw any conclusions from the trial.”
The company expects results from its Phase 3 study in patients with severe COVID-19 infection at the end of this month, and additional data from other studies to become available in May.
The University of Chicago is one of 152 locations participating in Gilead’s trial involving severe COVID-19 patients, which is “single arm” meaning it does not measure the drug against a matched group of patients treated with a placebo. A trial of patients with moderate COVID-19 symptoms has 169 study locations.
STAT reported that University of Chicago Medicine recruited 113 people with severe COVID-19 into Gilead’s trial. It said most of them have been discharged and two patients died.
The “anecdotal data ... looks promising on the surface and continues to support some potential for the drug to be active in certain COVID-19 patients,” RBC Capital Markets analyst Brian Abrahams said in a research note. “Nonetheless, there are major limitations to contextualizing and interpreting this data.”
Massachusetts-based biotechnology company Moderna Inc. (MRNA-Q) jumped 15.4 per cent after it said on Thursday that it received a US$483-million contract from the Biomedical Advanced Research and Development Authority (BARDA) to accelerate the development of its vaccine candidate for the novel coronavirus.
The experimental vaccine is being tested in an early-stage trial conducted by the U.S. National Institutes of Health and Moderna expects to begin mid-stage trial in the second quarter.
Depending on the data from these studies and discussions with regulators, the company said a late-stage study could begin as soon as fall of 2020.
The drug developer said BARDA funding would support the vaccine’s clinical development program, as well as the scale-up manufacture of the vaccine candidate, mRNA-1273, in 2020.
The Stars Group Inc. (TSGI-T) was up higher by 16.8 per cent after announcing it saw record revenues in the first quarter with 27-per-cent year-over-year growth and is “continuing to see strong momentum into April, with strong growth in poker and gaming revenues helping to mitigate the cancellation of sporting events.”
"With these encouraging trends, a well-diversified and cash-generative business, and our strong balance sheet, we believe that we remain well-positioned to navigate further headwinds related to the COVID-19 pandemic in 2020, and remain fully committed to our combination with Flutter, which we now expect to close in the second quarter and are confident will enhance and accelerate our growth strategy,” said CEO Rafi Ashkenazi, Chief Executive Officer of The Stars Group.
Boeing Co. (BA-N) rose 14.6 per cent after it said it will resume commercial airplane production next week in Washington state after suspending operations last month in response to the coronavirus pandemic, and the company’s chief executive told employees the aerospace industry will need financial help from the government.
“Our industry will need the government’s support, which will be critical to ensuring access to credit markets and likely take the form of loans versus outright grants,” Boeing Chief Executive Dave Calhoun told employees in a letter seen by Reuters. “Our team continues to focus on the best ways to keep liquidity flowing through our business and to our supply chain until our customers are buying airplanes again,” it said.
About 27,000 Boeing workers in the Puget Sound area will return to production of the 747, 767, 777 and 787 jet programs.
Employees in the Puget Sound for the 747, 767 and 777 will return starting April 20, while employees on the 787 program will return April 23 or April 24.
Separately, the aircraft leasing subsidiary of General Electric Co, GECAS, said on Friday it was canceling 69 orders for Boeing Co’s grounded 737 MAX jets.
GECAS maintains 29 MAX aircraft in its fleet and 82 on order, the company said.
Uber Technologies Inc. (UBER-N) gained 3.6 per cent after it said on Thursday it expects an impairment charge of up to US$2.2-billion in the first quarter due to the coronavirus outbreak and revenue to decline by US$17-million to US$22-million in the quarter.
Last month, the ride-hailing company promised 10 million free rides and food deliveries to healthcare workers, seniors, and people in need, during the period of lockdowns put in place to stem the spread of the coronavirus.
The company withdrew its 2020 forecast for gross bookings, adjusted net revenue and adjusted EBITDA, and said the initiatives taken in response to the outbreak, including financial assistance for drivers and delivery people, would be accounted into its first- and second-quarter revenue.
It expects GAAP revenue to fall by about US$17-million to US$22-million in the first quarter, and by about US$60-million to US$80-million in the second quarter.
Uber said the impairment charge would be against the carrying value of some of the company’s minority equity investments, due to the impact of the pandemic on the estimated value of those entities.
AMC Entertainment Holdings Inc. (AMC-N), the world’s largest theater operator, was up 31.4 per cent after it said on Friday its current cash balance was enough to withstand a global suspension of operations until a partial reopening in July.
AMC, which closed its theaters last month to help prevent the spread of the new coronavirus, had a cash balance of US$299.8-million as of March 31.
Schlumberger NV (SLB-N) increased 8.8 per cent after it recorded an US$8.5-billion charge in its first quarter and cut its dividend by three-fourths as the world’s top oilfield services provider slashed the value of some of its assets due to the collapse of oil prices.
Schlumberger’s international markets have been a rare bright spot and the business once again posted higher revenue, helping it weather the slump in North America.
“Looking beyond the sequential results for the quarter, our international business showed some resilience with year-on-year growth of 2% against the backdrop of an increasingly difficult operating environment,” Chief Executive Officer Olivier Le Peuch said in a statement on Friday.
The impairment charge led the company to report a net loss of US$7.38-billion, or US$5.32 per share, in the first quarter ended March 31, compared with a profit of US$421-million, or 30 US cents per share, a year earlier.
Excluding charges and credits, the company earned 25 cents US per share, slightly beating analysts’ average estimates of 24 US cents, according to Refinitiv IBES data.
U.S. railroad operator Kansas City Southern (KSU-N) sat 3.3 per cent higher after it withdrew its full-year earnings forecast on Friday on coronavirus concerns, but topped Wall Street estimates for quarterly profit as higher Mexico shipments boosted sales its chemicals and petroleum business.
Adjusted operating ratio, a key metric for Wall Street, fell to 59.7 per cent from 66.2 per cent a year ago. A lower operating ratio signals improved profitability.
Ratings agency Moody’s has warned that freight railroads, parcel delivery companies and truck carriers will face lower demand for freight services, as the pandemic disrupts supply chains and slows down economic activity.
Revenue from the chemicals and petroleum business rose 18 per cent to US$198.6-million, boosted by higher refined fuel products and liquid petroleum gas shipments to Mexico.
Intermodal revenues also rose 11 per cent, driven by strong cross-border shipments.
Marlboro cigarette maker Altria Group Inc. (MO-N) gained 1.1 per cent after it said on Friday Chief Executive Officer Howard Willard, who is recovering from COVID-19, has stepped down after nearly three decades with the company.
Chief Financial Officer Billy Gifford, who was last month named interim CEO when the company disclosed that Mr. Willard had taken a medical leave of absence, will assume the role on a permanent basis.
Under Mr. Willard, 56, who was also the chairman, Altria took a 35-per-cent stake in Juul Labs Inc. The company has since seen the value of that investment dwindle due to several bans on e-cigarettes following a surge in teenage vaping and reported health-linked concerns.
Altria said on Friday it was separating the roles of CEO and chairman and named Thomas Farrell, formerly the board’s independent presiding director, to the role.
Procter & Gamble Co. (PG-N) gained 2.6 per cent after it beat Wall Street expectations for quarterly profit on Friday as consumers stockpiled on everything from diapers and detergent to toilet rolls amid sweeping lockdowns to curb the spread of the coronavirus.
Sales at P&G’s units that make well-known brands such as Bounty paper towels, Tampax tampons, Charmin toilet paper, and Pampers diapers rose between 6 per cent and 8 per cent, boosting the company’s shares/
“The strong results we delivered this quarter are a direct reflection of the integral role our products play in meeting the daily health, hygiene and cleaning needs of consumers around the world,” Chief Executive Officer David Taylor said.
P&G is one of the first consumer products companies to report results for the January-March quarter, during which the coronavirus pandemic spread rapidly across the world and prompted panic buying on fears of stringent lockdowns.
Supermarkets like Kroger and Costco have reported a surge in sales in March, forcing them to limit the number of customers in stores and limiting hours in the morning to senior citizens.
While everyday essentials have been in demand, sales of beauty and grooming products have dwindled as people stay indoors. Sales fell at P&G’s beauty segment, which sells premium skincare products like SK-II, as well as its grooming unit.
On the decline
Apple Inc. (AAPL-Q) was down 1.4 per cent after an equity analyst at Goldman Sachs downgraded its stock, expecting to see iPhone shipments drop 36 per cent during the third quarter due to coronavirus-related lockdowns around the world.
Newmont Corp. (NGT-T) lost 2.8 per cent after chief executive Tom Parker said on Friday it is looking to restart in as soon as days some of the four Canadian and South American gold mines that it shut last month to curb the spread of the new coronavirus.
The world’s biggest gold miner wound down operations at its Yanacocha mine in Peru in mid-March and a week later placed two more mines in Canada and one in Argentina on care and maintenance as it sought to safe-guard the health of its workers and comply with government regulations.
The move, which impacted its Musselwhite operations in northern Ontario, and Eléonore mine in Quebec as well as Cerro Negro in Argentina, came as it withdrew its full-year guidance and said some production could be deferred into 2021.
On April 4 the company said it would scale back operations at its Penasquito gold mine in Mexico.
But as the coronavirus shows signs of peaking, and authorities in Buenos Aires and Quebec City have lifted restrictions around mining which they have deemed as an “essential service,” Newmont is looking to a phased restart, Mr. Parker said.
CES Energy Solutions Corp. (CEU-T) slid 3.1 per cent in the wake of a Thursday post-market announcement that it is suspending its modest monthly cash dividend and pursuing additional cost control initiatives, including a reduction in executive pay, “in response to continually evolving impacts on the oil and gas market as a result of demand weakness from the COVID-19 pandemic and continued uncertainty surrounding production level decisions amongst OPEC+ members.”
Canaccord Genuity analyst John Bereznicki said: “Given that CES recently cut its dividend by 75 per cent, we view this suspension as an indication of further fundamental deterioration over the past few weeks as well as of management’s focus on aggressive balance sheet and liquidity management in the current environment. We continue to believe CES’s asset-light business model and ability to harvest working capital as activity slows leave it well positioned to navigate severe fundamental headwinds. However, we also believe it is too early to deploy capital into the oilfield sector given our commodity price outlook and remain on the sidelines for now.”
Tidewater Midstream and Infrastructure Ltd. (TWM-T) dropped 9.6 per cent after it said it expects first- and second-quarter earnings to be impacted by 10-20 per cent as a result of reduced refined product demand caused by the COVID-19 pandemic.
The company also said it expects “minimal impact to second half 2020 guidance should demand return to moderate levels post the COVID-19 pandemic and continues to monitor market conditions closely.”
With files from staff and wires
David Leeder