A roundup of some of the North American equities that made moves in both directions
On the rise
Aecon Group Inc. (ARE-T) was 3.9 per cent higher in late afternoon trading on Friday after it beat expectations on the Street with its first-quarter results even though its net loss widened as revenues increased 15 per cent.
The Toronto-based construction firm says it lost $11.4-million or 19 cents per diluted share for the period ended March 31. That compared with a loss of $9.8-million or 16 cents per share a year earlier.
In a research note, Desjardins Securities’ Benoit Poirier said: “Bottom line, we are very pleased with ARE’s operational and financial performance in 1Q20 in the context of the COVID-19 outbreak. As previously mentioned, we believe ARE is well-positioned to face this crisis and to emerge a stronger company given its $7-billion backlog, strong balance sheet and market-leading position in the Canadian construction industry. We recommend investors buy the shares."
The decision, which would have extended by 20 years Barrick’s rights, was based on the recommendation of the country’s mining advisory committee, Prime Minister James Marape said on Friday in a statement.
“In the best interests of the state, especially in lieu of the environmental damages, claims and resettlements issues, the Special Mining Lease will not be renewed,” he said.
Barrick had been set to elevate the troubled mine to its top-tier assets, despite landowner and government demands to cede a larger stake and deteriorating security at the joint venture with China’s Zijin Mining.
With a 20-year lease renewal application in the balance, Barrick has faced backlash from Papua New Guinea landowners and residents.
Critics say the Porgera mine has polluted the water supply and created other environmental and social problems, with minimal economic returns for locals.
Mr. Marape said that plans were to bring the mine into state control, without giving any financial details over how much the State might pay for it.
Freeport-McMoRan (FCX-N) was up 9.2 per cent after it reported a quarterly loss on Friday, as production suffered due to the transition to underground mining at the company’s giant Grasberg copper mine in Indonesia and South American operations took a hit from coronavirus-led lockdowns.
Freeport, which had launched an internal review last month to cut costs, announced an US$800-million reduction to its estimated 2020 capital expenditure and said it was temporarily reducing some employee benefits, initiating furloughs and cutting third-party service and other costs.
The hit from coronavius only made things worse for the miner already affected by lower copper prices due to a long-drawn trade spat between the United States and China.
Freeport and peers also face growing uncertainty related to demand and supply-chain disruption, as government-forced mining closures have hit production, and the spread of the coronavirus has intensified fears concerning global economic growth.
Credit card issuer American Express Co. (AXP-N) rose after it posted a 76-per-cent drop in quarterly profit on Friday, as it set aside US$1.7-billion to brace itself against potential non-payments due to a wave of coronavirus-led layoffs.
The pandemic has hammered the global economy, hurting consumers’ ability to make payments on their credit cards. The lockdowns around the world are also hitting transaction volume as people stay at home.
“In light of the current environment, we are aggressively reducing costs across the enterprise,” said Chief Executive Officer Stephen Squeri, adding that the deterioration in the economy due to the virus accelerated in April and has dramatically impacted its volumes.
However, shares of the company were up 0.2 per cent, as it kept a tight lid on costs to weather the impact of the pandemic on its business.
Total expenses were down 5 per cent at US$7.2-billion, due to lower operating expenses in the reported quarter. AmEx spent US$2.39 billion on card member rewards, down 2 per cent from a year earlier.
On the decline
Zoom Video Communications Inc. (ZM-Q) fell 3.7 per cent after Facebook Inc. (FB-Q) introduced a videoconferencing tool and expanded livestreaming features on Friday, capitalizing on a surge in demand for video chats during the coronavirus pandemic while taking its first steps toward a planned integration of messaging products across its apps.
The videoconferencing tool, Messenger Rooms, will enable as many as 50 people to participate in a call, the company said in a statement. It will display a tiled layout of participant videos - up to 16 on desktop and 8 on mobile - resembling the design offered by competitor Zoom.
Earlier, Zoom was rose after Nasdaq announced it will become a component of the NASDAQ-100 Index, the NASDAQ-100 Equal Weighted Index and the NASDAQ-100 Ex-Tech Sector Index prior to market open on April 30.
Zoom will replace Willis Towers Watson (WLTW-Q) which was lower by 0.1 per cent on Friday.
Verizon Communications Inc. (VZ-N) slid 0.4 per cent in reaction to it withdrawing its full-year revenue outlook on Friday as it lost 68,000 phone subscribers who pay a monthly bill in the first quarter amid lockdowns that closed 70 per cent of its stores.
It led to a significant drop in customer activity and device volumes in the quarter, the telecom operator said. Analysts expected Verizon to gain just 100 subscribers in the quarter ended March 31, according to research firm FactSet.
The company also cut its full-year adjusted earnings per share outlook to between a growth of 2 per cent and a fall of 2 per cent. It had earlier expected a growth of 2 per cent to 4 per cent.
In the first quarter, Verizon’s earned US$1.26 per share, above analysts’ average estimate of US$1.22, according to IBES data from Refinitiv.
The company, which plans to stay committed in investing in 5G network, said the virus reduced its earnings by 4 US cents per share in the first quarter.
Hertz Global Holdings Inc. (HTZ-N) was down 1.8 per cent amid reports it is working with debt restructuring advisers to explore options for shoring up its finances after the coronavirus pandemic killed demand for car rentals.
The Estero, Florida-based company, whose largest shareholder is billionaire investor Carl Icahn, is reeling from the impact of the pandemic on global travel. It said this week it would lay off 10,000 people as its revenue dried up. Its workforce totaled 38,000 at the end of 2019.
Hertz has enlisted restructuring experts at law firm White & Case LLP and investment bank Moelis & Co (MC-N) to help it address a cash crunch that has made its US$17-billion debt pile potentially unsustainable, the sources told Reuters.
Hertz and its creditors are also preparing for potential negotiations on reworking the company’s finances, the sources added. No debt restructuring move is imminent, according to the sources.
Ruth’s Hospitality Group Inc. (RUTH-Q), owner of the Ruth’s Chris Steak House chain of restaurants, was down 0.5 per cent after it said late Thursday said it would quickly repay US$20-million of federal rescue loans it received to help maintain payroll through the coronavirus crisis, a program aimed at small businesses.
The announcement came after the U.S. Treasury said a highly valued public company would have a hard time getting a coronavirus relief loan in the next round of funding.
It also came after public pressure, with an online petition garnering more than 260,000 signatures, asking Ruth’s to give back the money.
Intel Corp. (INTC-Q) declined in the wake of forecasting second-quarter earnings below Wall Street views as it cited the cost of readying a new PC chip and said it could not make a forecast for the full year because of economic uncertainty caused by the coronavirus pandemic.
Intel’s shares fell 0.2 per cent, as executives tried to brace investors for the possibility that a short-term bump in demand for its processor chips from cloud computing centers and locked-at-home consumers buying PCs could become a slump if the economy enters recession.
“It’s really hard to think about the second half in terms of how demand is going to look compared to what we ultimately thought when we first gave guidance,” Chief Financial Officer George Davis told investors on a conference call.
Chief Executive Bob Swan said the company had to “temporarily pause” some projects due to local government restrictions at some sites, but said Intel’s factories largely have been able to meet demand.
Intel expects second-quarter adjusted profit of US$1.10 per share, compared to analysts’ average estimate of US$1.19 per share, according to IBES data from Refinitiv.
Boeing Co. (BA-N) slid 5.4 per cent after Bloomberg news reported it is planning to cut 787 Dreamliner output by about half and announce job cuts in its first-quarter earnings report.
Details of the production changes for Boeing’s commercial lineup are still being finalized and will determine the number of jobs to be removed through layoffs and buyouts, the report added.
With files from staff and wires
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.