A roundup of some of the North American equities making moves in both directions today
On the rise
The media company saw an 11-per-cent rise in advertising revenue for its television business in the second quarter, leading to a 5-per-cent jump in revenue for the segment (to $353.5-million).
“Corus delivered another strong quarter, with double-digit Television advertising revenue growth exceeding our expectations,” said president and CEO Doug Murphy. “The benefits of our ongoing progress in advanced advertising and data initiatives, our client centric approach and robust advertising demand are reflected in these positive results, partially offset by softness in our Radio segment and timing-related variability in our content business. Notably, the strength of our free cash flow in the quarter is accelerating our progress towards our leverage targets and supporting the advancement of our strategic priorities as we continue to build for the future.”
Net income attributable to shareholders fell to $6.3 million, or 3 cents per share, from $40-million, or 19 Canadian cents per share, during the same period a year earlier.
Excluding items, the company earned 7 cents per share, beating analysts’ average estimate of 5 cents.
Marijuana producers Aurora Cannabis Inc. (ACB-T) and Aphria Inc. (APHA-T) were up 2.8 per cent and 1.1 per cent, respectively, after being selected two of the three winners in the public tender to cultivate and distribute medical cannabis in Germany by its Federal Institute for Drugs and Medical Devices.
Aurora said it was awarded the maximum number of 5 of the 13 lots in the tender over a period of four years with a minimum supply of 4000 kilograms total. The cannabis produced will be sold to the government and supplied to wholesalers for distribution to pharmacies.
“The tender saw 79 companies participating, with the winners able to establish production in Germany upon the completion of the contract associated with the tender,” the company said in a release. “The selection process was based on the submission of a concept for domestic cannabis production, delivery and pricing. Aurora's concept, judged on criteria such as facility design, quality, security and logistics, received the highest ranking out of all concepts submitted, validating the Company's leadership in integrated cultivation, production and delivery.”
Aphria said it was granted 5 lots with a minimum annual capacity of 200 kilograms.
“Aphria is proud to have been selected as a successful applicant in the German tender process, a testament to our high production quality standards,” said Hendrik Knopp, Managing Director of Aphria Germany. “The decision from BfArM is a validation of our strategic approach to supporting the German medical cannabis market, including with high-quality, domestic production to secure vital supply for patients. We are very pleased with our continued business momentum in Germany.”
Bed Bath & Beyond Inc. (BBBY-Q) rose 4.3 per cent after Morgan Stanley upgraded its shares to “equal-weight” from “underweight,” saying that the emergence of activist investors will create upside for the stock in the near term.
“We still question BBBY’s long-term prospects. For now, the potential for sweeping mgmt. change including a new well regarded CEO creates possible upside and may untether stock perf. from underlying results in the near term,” the firm said.
On March 26, an investor group comprising Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC disclosed a combined stake of about 5 per cent in the company and also said it was seeking a review of options, including a sale, for all of the home furnishing retailer’s non-core brands
High Arctic Energy Services Inc. (HWO-T) was up 0.8 per cent after it announced it will acquire the assets of Precision Drilling Corp.'s (PD-T) snubbing services equipment in Canada for $8.25-million.
Precision Drilling jumped 4.2 per cent.
Shopify Inc. (SHOP-T) rose 1.3 per cent after Baird analyst Colin Sebastian raised his target for its stock (to US$208 from US$188), believing the Canadian e-commerce software maker’s competitive position “remains strong.”
“Our latest checks suggest Shopify continues to consolidate share, despite intensifying competitive concerns (i.e., Adobe, Facebook/Instagram, Microsoft, Salesforce, Square), and believe it will take years and significant investment for others to catch up,” he said. “While we would not dismiss the risks/opportunities for any of these companies, we note that Shopify’s platform required more than $1-billion in R&D and marketing investment just over the past four years, and remains differentiated from current alternatives.”
On the decline
SNC-Lavalin Inc. (SNC-T) fell 1.6 per cent after announcing an agreement to sell a 10.01-per-cent stake in 407 International Inc. to The Ontario Municipal Employees Retirement System (OMERS) for up to $3.25-billion.
The Montreal-based company said $3.0-billion will be payed at the closing date, which is expected to be in two months, and $250-million over a period of 10 years, “conditional to certain financial thresholds related to the ongoing performance of Highway 407 ETR. “
With the deal, SNC and Caisse de dépôt et placement du Québec (CDPQ) have re-negotiated the terms of the $1-billion CDPQ loan agreement entered into 2017, which is supported by Highway 407 ETR shares.
Proceeds from this 407 transaction will be used for the payment of approximately $600-million under the CDPQ loan agreement and “for the execution of the Company's deleveraging plans.”
SNC will retain a 6.76-per-cent stake in the highway with the remainder owned by Cintra Global S.E., a wholly owned subsidiary of Ferrovial S.A., (43.23 per cent) and indirectly owned subsidiaries of Canada Pension Plan Investment Board (40 per cent).
Shares of Kirkland Lake Gold Ltd. (KL-T) fell 0.7 per cent with the release of its first-quarter production results.
The Toronto-based miner announced total production for the quarter of 231,879 ounces, an increase of 57 per cent year-over-year (from 147,644 ounces), which they attributed to record quarterly production at both its Fosterville and Macassa facilities.
“The Company ended Q1 2019 well positioned to achieve its improved full-year 2019 production guidance of 920,000 – 1,000,000 ounces of gold, with production at Fosterville expected to be weighted to the second half of 2019 as development advances to depth into the high-grade Swan Zone,” it said in a statement.
With files from staff and wires