A roundup of some of the North American equities making moves in both directions today
On the rise
The Vancouver-based apparel retailer said it has already reopened 150 locations across North America, Europe, Asia, New Zealand and Australia.
“After closing the majority of lululemon stores globally outside of Greater China in mid-March, the company is gradually welcoming guests back to select locations where it is permitted to do so. lululemon’s phased reopening approach incorporates key learnings from its successful reopening in Greater China and is being carried out week-by-week, market-by-market in accordance with local government and public health authority guidelines,” the company said.
Moderna Inc. (MRNA-Q) was 2.9 per cent higher after Anthony Fauci, head of the U.S. National Institute of Allergy and Infectious Diseases, said he was “cautiously optimistic” about its COVID-19 vaccine.
In an interview with NPR on Friday morning, Dr. Fauci said the early data on the company’s mRNA-1273 vaccine candidate is “really quite promising.”
Nvidia Corp. (NVDA-Q) increased 2.7 per cent after it forecast second-quarter revenue above analysts’ estimates, as demand surges for its chips used in the data centers that power the shift to working remotely because of the new coronavirus outbreak.
The company said the forecast includes a contribution from its US$6.9-billion purchase of Israeli chip firm Mellanox Technologies Ltd, which strengthened its data center business.
The chipmaker said it expects current quarter revenue of US$3.65-billion, plus or minus 2 per cent, while analysts on average were expecting US$3.29-billion, according to IBES data from Refinitiv.
Much like rivals Intel Corp and Advanced Micro Devices Inc, Nvidia recorded a jump in demand for data center chips as companies invested to strengthen their IT infrastructure to support employees working remotely. Nvidia also said that sales to cloud computing companies drove its data center results.
General Motors Co. (GM-N) was up 0.7 per cent after it was revealed it is delaying the resumption of second shifts at truck assembly plants in Michigan, Indiana and Mexico because of a lack of parts from Mexico.
The Detroit automaker, which resumed production on Monday after suspending operations in March because of the coronavirus pandemic, will launch a second shift on Monday only at its Lansing Delta Township plant. It will not immediately begin, as it had earlier hoped, second shifts on Monday at its Ft Wayne, Indiana, Flint and Silao, Mexico plants that build full-size trucks, but could resume a second shift as early as later next week, the source said.
GM spokesman Dan Flores said “demand for our full size picks has been very strong so we are certainly exploring ways to add production and will do that when it makes sense.”
Abbott Laboratories (ABT-N) increased 1.2 per cent after it said late Thursday an analysis of data from an ongoing study of its ID NOW rapid test, which is used in the White House and elsewhere to spot COVID-19, shows it is highly accurate when compared with industry-standard tests.
Abbott’s data has so far shown that the test, which can be used at the point of care and produces results in minutes, finds positive cases of COVID-19 nearly 95 per cent of the time when compared with two other tests performed in laboratories.
The results appear to contradict some other studies that raised questions about the test’s accuracy.
The U.S. Food and Drug Administration said last week that Abbott’s speedy coronavirus diagnostic test could potentially be inaccurate. The regulator said early data about the Abbott ID Now test suggested it may sometimes fail to detect the illness.
New York University researchers also said last week that the Abbott test could be missing a third to nearly half of positive cases. An NYU study on the test, however, was not peer-reviewed.
On the decline
The company announced revenue and adjusted earnings per share of 46 cents for the period, topping the consensus forecast of 38 cents. EBIT margin of 19.8 per cent also beat the analysts’ projection (16.8 per cent).
CAE did say it expects the COVID-19 pandemic to have a significant negative impact on short-term operational and financial performance. However, after declines in the first half of the year, the Montreal-based company expects a second-half rebound.
Desjardins Securities analyst Benoit Poirier said: “Overall, while we are pleased with the solid results in 4Q, we note that the outlook for FY21 appears to be weaker than we had initially anticipated.”
China’s Alibaba Group Holding Ltd. (BABA-N) dropped 6 per cent after it reported fourth-quarter revenue and profit that topped market expectations, as the COVID-19 lockdowns drove more people to shop online for essentials.
As people stayed indoors and brick-and-mortar stores remained shut during the health crisis, online orders surged, with the company’s core commerce business rising nearly 19 per cent to 93.87 billion yuan (US$13.16-billion) in the quarter.
Revenue at its cloud computing business surged about 58 per cent.
With China’s economy starting up again much ahead of major economies in Europe and the United States, the e-commerce giant said it expects to generate over 650 billion yuan in revenue in fiscal 2021.
The company has been pushing into new businesses and technologies as online shopping space heats up with competition from smaller rival JD.com Inc and Pinduoduo Inc, which is popular with residents in China’s lower-tier cities.
Deere & Co. (DE-N) on Friday topped quarterly sales and profit estimates and forecast a smaller-than-expected fall in farm equipment sales for the year, signaling a recovery in demand for its harvesters and tractors.
Shares of the company, which withdrew its outlook in March due to an escalating COVID-19 pandemic, slid 1.4 per cent.
Deere’s fresh forecast comes more than a month after President Donald Trump announced a US$19-billion relief program to help U.S. farmers cope with the impact of the health crisis. The company’s sales were likely to benefit from the additional liquidity, analysts have said.
“Deere noted signs of stabilization (in farm equipment sales) despite the week farm sentiment,” said Jefferies analyst Stephen Volkmann, adding that fiscal 2020 North American sales outlook of a decline of 10 per cent was “surprisingly benign”.
The company said it expects farm and turf equipment sales to fall between 10 per cent and 15 per cent this year. According to Jefferies, the midpoint is better than a 14-per-cent drop estimated by analysts.
Deere typically sees a pick-up in sales of farm equipment after January as farmers start planting fields. That likely helped second-quarter demand for farm machinery hold up better than sales of construction equipment.
Hewlett Packard Enterprise Co. (HPE-N) plummeted 11.5 per cent in the wake of unveiling a plan targeting gross savings of at least US$1-billion by 2022 and cut the base salaries of top executives by 25 per cent as the software maker seeks to weather the coronavirus crisis.
“The global economic lockdowns since February significantly impacted our fiscal Q2 financial performance,” Chief Executive Officer Antonio Neri said in a statement.
Beginning on July 1, through the remainder of fiscal year 2020, the base salaries of the CEO and officers at the executive vice president level will be reduced by 25 per cent, HPE said.
The board also cut by 25 per cent the portion of the annual US$100,000 cash retainer entitled by directors for the period beginning on July 1 through the remainder of fiscal 2020.
HP, which in April withdrew its 2020 forecast, posted second-quarter adjusted earnings of 22 US cents per share, missing the average analyst estimates of 29 US cents, according to IBES data from Refinitiv.
With files from staff and wires