A roundup of some of the North American equities making moves in both directions today
On the rise
Pfizer Inc. (PFE-N) gained after announcing it expects to provide safety data and file for authorization of the COVID-19 vaccine it is developing with German partner BioNTech in late November, delaying any clarity on the vaccine until after the Nov. 3 U.S. presidential election.
The regulatory filing for the vaccine could come as soon as safety data is available in the third week of November, Pfizer said, lifting the company’s shares and the broader U.S. stock market.
The timeline now allows for possible U.S. authorization of a coronavirus vaccine this year, a key step in controlling a pandemic that has killed more than a million and ravaged the global economy.
The U.S. Food and Drug Administration has said it wants at least two months of safety data before authorizing emergency use of any experimental coronavirus vaccine.
Pfizer’s Chief Executive Officer Albert Bourla noted in a letter posted on its website that the filing depended on several factors, including data on effectiveness that may or may not be available by late October.
Boeing Co. (BA-N) rose as a report said Europe’s aviation regulator had declared the U.S. planemaker’s 737 MAX safe to fly again.
The European Union Aviation Safety Agency’s executive director, Patrick Ky, said he is satisfied that changes to the jet have made it safe enough to return to the skies before the end of the year, Bloomberg reported.
He was quoted as saying that “our analysis is showing that this is safe, and the level of safety reached is high enough for us.” Bloomberg reported that Ky said the development of a further sensor will take 20 to 24 months, and the agency had discussed with Boeing “the fact that with the third sensor, we could reach even higher safety levels.”
EASA said that the article was accurate. It said in an emailed response to questions that it is “currently in the process of reviewing the final documents ahead of a proposed Airworthiness Directive for the Boeing 737 Max that is expected to be published next month for public consultation.” After that is concluded, a final airworthiness directive will be published, it said.
Bankrupt car rental company Hertz Global Holdings Inc. (HTZ-N) said on Friday it had lined up US$1.65-billion in debtor-in-possession financing, sending its shares soaring.
Hertz plans to invest up to US$1-billion in vehicle acquisitions in the United States and Canada, and up to US$800-million for working capital and general corporate purposes.
The financing will be provided by some of the company’s creditors, Hertz said. It has filed a motion for approval of the financing by the U.S. Bankruptcy Court for the District of Delaware.
The more than a century old company’s shares jumped on the news.
The company said trading volume increased by approximately 8,000 per cent during the two days following the Oct. 6 announcement of the offering.
“While VIVO is unaware of the reasons for the increased trading activity and downward pressure on our stock price, we have reported last week’s highly unusual trading activity to securities regulators,” said Barry Fishman, CEO of VIVO. “We are hoping that in the short-term, trading activity will stabilize at a level that reflects VIVO’s current business fundamentals, recent achievements and future potential.”
The Calgary-based company said it’s indirectly acquiring an additional 37 per cent of Petrogas' equity for total consideration of approximately $715-million. With the deal, it will own 74 per cent with Idemitsu Kosan Co. Ltd. owning the remaining approximate 26 per cent.
“This acquisition is consistent with our global export strategy, growing Midstream operations, and corporate focus on building a diversified, low-risk, high-growth Utilities and Midstream business that is set to deliver resilient, durable and compounding value for our stakeholders,” said Randy Crawford, AltaGas' President and CEO.
On the decline
Air Canada (AC-T) was down in the wake of announcing chief executive Calin Rovinescu will retire early next year after leading the country’s largest airline for almost 12 eventful years, handing control to deputy CEO and chief financial officer Michael Rousseau.
Montreal-based Air Canada said on Friday that Mr. Rovinescu, aged 65, plans to step down on Feb. 15 after putting the finishing touches on a pandemic recovery plan that has seen the airline lay off half its workforce of 38,000, lock in $6-billion of liquidity and rework the planned acquisition of rival Transat A.T. Inc.
“Calin has ability to be both strategic and a great operator, and he’s created a deep team,” said Air Canada director Annette Verschuren, former president of Home Depot Canada. In an interview, she said: “What we’ve witnessed on his watch is an intense, 30-year undertaking to build this global business.” Ms. Verschuren said Air Canada’s board and executive team agreed to delay succession earlier this year, when the pandemic struck.
- Andrew Willis and Eric Atkins
Barrick Gold Corp. (ABX-T) was lower after Papua New Guinea Prime Minister James Marape said on Thursday that its joint venture with China’s Zijin Mining was set to remain operator of the Porgera gold mine following talks in Port Moresby.
However, Barrick Gold Chief Executive Mark Bristow on Friday said the Canadian miner is a “long way off” from reaching agreement.
“We’re a long way off reaching agreement,” Bristow said at the Financial Times Mining Summit. “We’re very clear about our rights and the importance that Porgera offers to that part of Papua New Guinea.”
In April, Mr. Marape had refused to extend the expired mining lease of operator Barrick Niugini Ltd (BNL), citing environmental and social problems.
That led BNL to mount legal challenges and close down the mine in a year spot gold prices have hit all-time highs.
“We have agreed in principle that Papua New Guinea will take a major share of equity under the new arrangements and BNL will retain operatorship and there will be a fair sharing of the economic benefits,” Mr. Marape said in a statement after talks with Barrick Gold Chief Executive Mark Bristow on reopening the mine.
Barrick and Zijin each hold 47.5 per cent in Porgera, with the remaining 5 per cent held by Mineral Resources Enga, a joint venture of Enga province and local landowners.
Mr. Marape said in a Facebook post on Friday PNG’s equity stake would be a majority. He also mentioned that “subject to final touch ups” he had not made concessions on other major points, including that the mining lease will be held by a state-owned entity and Barrick should “phase out at an agreed time”.
Barrick declined comment and BNL had no immediate response when contacted by email on Friday.
Canadian Pacific Railway Ltd. (CP-T) was down after announcing it has acquired full ownership of the Detroit River Rail Tunnel from OMERS, the defined benefit pension plan for Ontario municipal employees, for approximately US$312-million.
CP had previously owned a 16.5-per-cent stake of the tunnel in partnership with OMERS.
It will continue to operate the 2.6-kilometre tunnel linking Windsor and Detroit and said the acquisition will reduce its operating costs related to movements through the tunnel.
“This is an important corridor for CP and by taking full ownership, we can better operate the asset to the benefit of our customers and the North American supply chain,” said CP President and CEO Keith Creel. “This strategic acquisition combined with our recent purchase of the CMQ will further integrate the eastern part of our network and create value for our shareholders.”
Gilead Sciences Inc. (GILD-Q) slipped as a World Health Organization study concluded its COVID-19 drug remdesivir does not help patients who have been admitted to hospital. Gilead has questioned the findings of the study.
“It’s a reliable result, don’t let anybody tell you otherwise, because they’ll try to,” Richard Peto, an independent statistician hired by the WHO to scrutinize its Solidarity trial results, told reporters. “This is real world evidence.”
In a blow to one of the few drugs being used to treat people with COVID-19, the WHO said on Thursday that remdesivir appeared to have little or no effect on 28-day mortality or length of hospital stays among patients with the respiratory disease.
Gilead, which got the Solidarity data 10 days ago, questioned the findings, telling Reuters they appear “inconsistent with more robust evidence from multiple randomized, controlled studies published in peer-reviewed journals validating the clinical benefit of remdesivir.”
U.S. railroad operator Kansas City Southern (KSU-N) lost ground after it said on Friday its quarterly profit increased 5.3 per cent, boosted by higher shipments in its chemical and petroleum business.
Net income rose to US$190.2-million, or US$2.01 per share, in the third quarter ended Sept.30, from US$180.6-million, or US$1.81 per share, a year earlier.
Revenue fell to US$659.6-million from US$747.7-million.
Top U.S. oilfield services provider Schlumberger NV (SLB-N) slid after it posted its third straight quarterly loss as this year’s prolonged slump in oil prices due to the COVID-19 pandemic compelled its major energy customers to shun drilling.
The company kicked off earnings from hard-hit U.S. oilfield service providers and come as the reintroduction of lockdowns in some parts of the world due to a resurgence in infections threaten a recovery in oil demand.
North America has fared much worse than international services markets, with Schlumberger’s revenue from the region falling to US$1.16-billion, from US$2.85-billion a year earlier.
Total revenue plunged 38 per cent to US$5.26-billion.
Last month, Schlumberger agreed to sell its North American shale fracking business as Chief Executive Officer Olivier Le Peuch bets on asset sales, salary cuts, and job reductions to weather the stubbornly low oil prices.
Schlumberger reported a net loss of US$82-million, or 6 US cents per share, for the third quarter ended Sept. 30. Excluding charges and credits, it earned 16 US cents per share in the quarter, helped by aggressive cost cuts.
With files from staff and wires