A roundup of some of the North American equities making moves in both directions today
On the rise
Maxar Technologies Inc. (MAXR-T) jumped 24.2 per cent on Friday after announcing that its insurance carriers have accepted the company’s US$183-million claim for loss arising from the WorldView-4 satellite on-orbit failure, and have agreed to pay the company that full amount under their insurance policies.
Amazon.com Inc. (AMZN-Q) was up 3.1 per cent after CNBC reported Warren Buffett’s Berkshire Hathaway Inc. (BRK-B-N, BRK-A-N) has bought shares of internet retailing giant for the first time.
“One of the fellows in the office that manage money ... bought some Amazon (shares) so it will show up in the 13F,” said Mr. Buffett said, according to the report.
“Yeah, I’ve been a fan, and I’ve been an idiot for not buying.”
RBC Dominion Securities’ Robert Kwan said: “We believe that many investors took a cautious approach heading into Q1/19 results related to both the quarter and whether Pembina would actually increase 2019 guidance for the IFRS 16 impact (it did), which we think was manifested in the recent share price weakness. With good Q1/19 results (although a lot of moving pieces), a 5.3-per-cent dividend increase to $2.40/share (matches our forecast), and bumped-up guidance (to reflect the IFRS 16 transition), we view the quarterly release as positive for the share price.”
Net earnings were $4.2-million or 2 cents per share compared to a net loss of $8.1-million or 4 cents in the first quarter of 2018. Adjusted earnings were $16.5-million compared to $5.8-million in the first quarter of 2018.
The Vancouver-based company announced that executive chairman and founding shareholder Robert Quartermain will be retiring from the company on Dec. 31, 2019.
Hudbay Minerals Inc. (HBM-T) was up 3 per cent after announcing it will elect 11 nominees of Waterton Global Resource Management Inc., its second largest shareholder, settling a long-drawn out proxy contest.
“Hudbay is pleased to have reached an Agreement with Waterton that is in the best interests of shareholders," said Hudbay chair Alan Hibben in a statement. "On behalf of the Board, we look forward to welcoming our new directors to the Board and thank our departing directors for their valuable service to the Company. We also thank shareholders for their continued support of Hudbay and firmly believe that the best is yet to come."
The private equity firm had been demanded Hudbay replaces its chief executive officer and nominated five directors to the company’s board.
A day after its shares dropped 5.1 per cent, Bombardier Inc. (BBD-B-T) sat 3.2 per cent higher.
On Thursday, the plane and train maker announced it is putting its aircraft component manufacturing factories in Morocco and Northern Ireland up for sale, and suspending financial targets for 2020.
In a research note released Friday, Desjardins Securities analyst Benoit Poirier said: “Bottom line, we maintain our bullish stance on the name as we continue to believe in management’s ability to deliver on its 2020 turnaround plan. The recent refinancing of 2020–21 maturities should provide enough flexibility to overcome the challenges at BT. We continue to see value in BBD’s shares (92-per-cent upside potential to our target price).”
Shares of Tesla Inc. (TSLA-Q) were up 4.5 per cent after the electric car maker raised its equity offering to 3.1 million shares at US$243 per share, and chief executive officer Elon Musk will buy shares worth up to US$25-million.
“Seeing the offering amount raised does not surprise me at all,” Clement Thibault, senior analyst at global financial markets platform Investing.com told Reuters.
“As far as Tesla is concerned, the more money in the bank, the better.”
On Thursday, Tesla said it would raise up to US$2.3-billion in new capital through shares and debt, easing Wall Street concerns about the money-losing company’s ability to overcome a drop in sales and build new product lines.
Sinclair Broadcast Group (SBGI-Q), the largest U.S. broadcast station owner, was up 2.8 per cent after the Wall Street Journal reported late Thursday that it has reached a deal worth more than US$10-billion to buy 21 regional sports networks from Walt Disney Co. (DIS-N).
The deal, which would include sports channels in Los Angeles and Detroit, is expected to be announced as early as Friday, the report said.
SNC-Lavalin Group Inc. (SNC-T) rebounded a day after it reported an unexpected first-quarter loss amid persistent legal and political pressure.
The Montreal company finished up 1.7 per cent.
On Thursday, SNC fell over 13 per cent to its lowest level since 2009.
Desjardins Securities’ Benoit Poirier said: “While we acknowledge that SNC’s valuation is attractive at current levels, we prefer to wait to see operational improvements from the core E&C business before revisiting our investment thesis on the name. In addition, we note that the proceeds from the divestiture of Highway 407 will be mainly directed toward debt reduction, which would limit the potential for share buybacks in the short term.”
Excluding items, the Calgary-based company earned $1.07 per share, beating the analysts’ average estimate of 99 cents per share.
TransCanada’s comparable earnings rose to $987-million, or $1.07 per share from $864-million, or 98 cents per share, during the same period a year ago, while revenue rose to $3.49-billion from $3.42-billion.
"With the demand for our existing assets driving historically high utilization rates and $30 billion of secured growth projects underway, approximately $7 billion of which are expected to be completed by the end of the year, earnings and cash flow are forecast to continue to rise. These projects are supported by regulated or long-term contracted business models that are expected to support annual dividend growth of eight to ten per cent through 2021,” said president and chief executive offer Russ Girling in a statement.
Eldorado Gold Corp. (ELD-T) plummeted 17.8 per cent after its quarterly results, released Thursday after market close, fell well short of expectations on the Street.
Credit Suisse’s Fahad Tariq said: “We expect the market to initially overweight the headline EPS miss, likely followed by a recovery given the miss was driven by the timing of sales pushed from Q1 to Q2/Q3.”
Interfor Corp. (IFP-T) was down 3.6 per cent after it reported lower-than-anticipated first-quarter results after the bell on Thursday.
The Vancouver-based company said adjusted EBITDA came in at $16.3-million, including $11.1-million related to export duties, which fell short of the Street’s $20-million forecast.
Raymond James’ Daryl Swetlishoff said: “We rate Interfor Strong Buy reflecting our constructive lumber market outlook, attractive organic growth opportunities, higher relative exposure to the USA and strong balance sheet.While investor enthusiasm has trended downwards with lumber pricing, recent curtailment announcements by industry participants (including Interfor) has provided life to futures pricing. As we highlighted in our recent note, we continue to expect better end user takeaways to coincide with improved building weather, although given lower than expected demand generation from China (and increasing inventories), we expect it will take time for commodity markets to find a balance. With shares trading at multi year lows we expect value investors to be rewarded during 2H19.”
“Management has done an excellent job in continuing to better position BCE to compete for a larger share of spending in the sector,” said Desjardins Securities’ Maher Yaghi. "Cost reductions and significant capital investments in FTTH and wireless have built a protective layer around the company’s assets, which should last for many years. However, with the recent decline in interest rates, valuations in the sector have shifted in search for yield, tilting the valuation of BCE’s stock to a significant premium vs peers.”
Activision Blizzard Inc. (ATVI-Q) dropped 4.8 per cent after the videogame maker’s current-quarter profit expectation fell below expectations.
The company forecast current-quarter adjusted revenue of US$1.15-billion and profit of 23 US cents per share, missing analysts’ average estimate of US$1.28-billion and 37 US cents per share.
Credit Suisse analyst Stephen Ju said: “2019 is a rebuilding year hence there was a lower likelihood of surprises, especially as Sekiro was already announced having sold in excess of 2mm units. King in particular the Candy franchise continues its revival with MAUs growing once again on the heels of the latest Candy Crush Friends. This was offset by a sequential decline in both Overwatch and Hearthstone due to a weaker content update cycle. That said, the most important takeaway for us was the management commentary around Blizzard’s rich pipeline, with cross platform development initiatives, as well as continual evaluation of monetization models for all games including free-to-play – the combination of these factors translate into higher potential for upside in 2020 and beyond.”
With files from staff and wires