A roundup of some of the North American equities making moves in both directions
On the rise
Corus Entertainment Inc. (CJR-B-T) jumped on Friday after it announced a distribution deal with U.S. streaming service Hulu and topped expectations with its second-quarter financial results.
The Toronto-based company — which owns one of Canada’s largest radio groups, the Global television network and dozens of specialty cable channels — said its Corus Studios division has signed a deal to sell more than 200 episodes of programming to Hulu.
Hulu — jointly owned by Disney and NBCUniversal — will acquire the first three seasons of Backyard Builds as well as other renovation and food-related titles such as Family Home Overhaul, $ave My Reno and Big Food Bucket List.
Financial details of the deal weren’t announced, but Corus chief executive Doug Murphy told analysts on a conference call that it was a “breakthrough” multi-year agreement.
Mr. Murphy also said Corus has had very positive momentum with advertisers, the major source of revenue for its television and radio businesses.
“We’re going to be up a lot in Q3. Full stop. The question is, how big,” Mr. Murphy said, referring to the third quarter ending May 31.
Turquoise Hill Resources Ltd. (TRQ-T) was up after reaching a binding agreement with Rio Tinto Ltd over funding for expansion of the massive Oyu Tolgoi copper-gold mine in Mongolia.
Rio and Turquoise Hill will restructure debt payments of up to US$1.4-billion with lenders and look to raise up to US$500-million in supplemental debt under existing financing arrangements.
The agreement will smooth the way for the next phase of development, which has faced cost and timeline blowouts and has caused acrimony between the mining giant and its junior partner.
“It’s just been such a troublesome asset, at least this takes away one of the issues - you have still got the issues with the government and the technical issues,” said Andy Forster, portfolio manager at Argo Investments in Sydney.
“From a financing perspective there has been a fractured relationship there, so I guess this result is positive.”
The Oyu Tolgoi mine expansion has seen costs balloon to US$6.75-billion, about US$1.4-billion higher than Rio’s estimate in 2016, and has led to friction over funding between it and Turquoise Hill.
Westshore Terminals Investment Corp. (WTE-T) was higher with the late Thursday announcement of the approval of its normal course issuer bid to purchase for cancellation up to 3.16 million common shares, representing almost 5 per cent of outstanding shares as of April 7.
Levi Strauss & Co. (LEVI-N) gained ground after raised its half-year revenue growth forecast on Thursday , banking on COVID-19 vaccine rollouts to spur a return to normalcy, after the denim maker beat estimates for quarterly results on a pandemic-led e-commerce boost.
It also raised its quarterly dividend to 6 US cents per share from 4 US cents.
Many apparel sellers, including Nike Inc and Kohl’s Corp, have also expressed similar optimism about store traffic rebounding to normal levels, even as online sales have boomed amid the health crisis in recent months.
“As the vaccine rollout continues and consumer excitement returns, I am more confident than ever that we will emerge from the pandemic a stronger business,” Levi Chief Executive Officer Chip Bergh said.
Levi said more than 40 per cent of its European stores were closed as of Thursday, with the rest operating on reduced hours due to lockdown restrictions.
The jeans maker said it expected its revenue to increase 24 per cent to 25 per cent, up from a prior range of 18 per cent to 20 per cent , for the first half of its fiscal 2021.
Levi also said it expected adjusted per-share profit for the period to be 41 US cents to 42 US cents. Analysts on average expect a profit of 30 US cents per share for the first and second quarter, according to IBES data from Refinitiv.
On the decline
Barrick Gold Corp. (ARX-T) finished flat in the wake of reaching a deal that gives the Papua New Guinea government a majority share in the Porgera gold mine as part of plans to restart operations
The deal will set a benchmark for further resources projects in the region, Prime Minister James Marape said in a statement, and help shape the terms of new developments by the likes of Australian gold miner Newcrest Mining.
Porgera has been shut for a year after a dispute over the terms of benefit-sharing between the operator, landowners and the government, but the new framework pact paves the way to resume operations, though it gave no timeframe.
“We intend to partner with all key stakeholders to make Porgera a world-class, long-life gold mine,” Barrick Chief Executive Mark Bristow said in a statement.
The deal places Porgera ownership in a new joint venture that is 51-per-cent owned by PNG stakeholders and the rest by Barrick Niugini Limited (BNL), Barrick added.
BNL, jointly owned by Barrick and China’s Zijin Mining will remain the operator of the mine. The parties will now work on definitive terms prior to a restart.
Barrick and Zijin have agreed to effectively halve their stakes from 47.5 per cent each previously, with the remaining 5 per cent allotted to Papua New Guinea’s Mineral Resources Enga.
The deal sets a 53:47 split between PNG stakeholders and BNL in economic benefits generated over the life of the mine, with BNL providing the capital to restart.
MTY Food Group Inc. (MTY-T) dipped after it reported a first-quarter profit of $13.4-million, down from $19.0-million a year ago, as it continued to deal with the impact of the pandemic.
The restaurant franchising company says the profit amounted to 54 cents per diluted share for the quarter ended Feb. 28, down from 76 cents per diluted share a year earlier.
Revenue totalled nearly $119-million, down from $150.8-million a year ago.
The company behind more than 80 restaurant brands including Thai Express, Tiki-Ming and Tutti Frutti says system sales in Canada were down 48 per cent, while international system sales were off 32 per cent.
However, MTY reported U.S. system sales for the first quarter were down just four per cent and that, excluding the impact of foreign exchange fluctuations, the U.S. saw a growth in sales for the second quarter in a row.
MTY says 321 locations were still temporarily closed at the end of the quarter because of the pandemic. Those included 195 in Canada, 122 in the U.S. and four international locations.
Boeing Co. (BA-N) was lower after U.S. airlines temporarily grounded more than 60 737 MAX jets on Friday after the U.S. planemaker asked 16 carriers who operate the jet to address an electrical power system issue in the aircraft.
The U.S. Federal Aviation Administration (FAA) said Boeing had notified the agency late Thursday of its recommendation to temporarily remove some planes from service to address a manufacturing issue that could affect the operation of a backup power control unit.
The FAA added it is in contact with the airlines and the manufacturer, and will ensure the issue is addressed.
The 737 MAX returned to service in November after a 20-month safety ban triggered by two fatal crashes that killed 346 people. The plane has continued to face careful scrutiny since it resumed flights.
Southwest Airlines removed 30 MAX airplanes from its schedule Friday, while American Airlines removed 17 of its 41 MAX airplanes and United Airlines removed 16 of its 30 MAX airplanes.
With files from staff and wires
David Leeder