A roundup of some of the North American equities making moves in both directions today
On the rise
Hudbay Minerals Inc. (HBM-T) was higher after saying late Thursday that it has resumed operations at its Lalor mine, where production was halted due to a fatality last week.
Hoisting activities resumed on June 23 and production has returned to normal levels at the mine, located in the town of Snow Lake in Manitoba, the company said in a statement.
The fatality at Lalor mine occurred when a worker employed by a service provider was fatally injured from a fall while working at a height
Edmonton-based Alcanna Inc. (CLIQ-T) rose on the premarket announcement of its intent to commence a normal course issuer bid to repurchase 2.76 million shares, or 10 per cent of the public float as of June 25.
“Management of the Company believes that the market price of its common shares may not reflect their underlying value and that the purchase of the common shares for cancellation will increase the proportionate interest of, and will be advantageous to, all remaining shareholders. As a result, depending upon future price movements and other factors, Alcanna believes that the purchase of the common shares would be an appropriate allocation of capital and in the best interests of the Company and its shareholders. Furthermore, the purchases are expected to benefit all persons who continue to hold common shares by increasing their equity interest in Alcanna when the repurchased shares are cancelled,” it said.
Nike Inc. (NKE-N) jumped as it forecast fiscal full-year sales ahead of Wall Street estimates, betting on its online business, higher demand as lockdowns ease, and its tried-and-tested strategy of limiting stock for popular products.
The sneaker maker’s shares rose as the company also posted better-than-expected quarterly earnings and revenue.
After staying at home for more than a year and limiting themselves to leisure-wear and comfortable pajamas, consumers are back to buying sneakers for running and hiking as they return to their routines, thanks to rapid vaccinations.
There were definite reasons for optimism and confidence, like the return to sport, Chief Financial Officer Matthew Friend said on an earnings call, adding that Nike has already begun to see an acceleration in its sport performance business.
Beaverton, Oregon-based Nike said fiscal 2022 revenue is estimated to grow by low double-digits and surpass US$50-billion. Analysts had expected revenue of US$48.46-billion for fiscal 2022, according to Refinitiv.
First-half growth is expected to be slightly higher than second half growth, Mr. Friend said.
In Nike’s biggest market, North America, fourth-quarter revenue more than doubled to US$5.38-billion and beat the average analysts’ estimate of US$4.31-billion.
Total gross margin rose 8.5 percentage points to 45.8 per cent versus last year, boosted in part by the company’s direct to consumer business and fewer charges related to factory cancellations. Analysts expected gross margin of 43.96 per cent, according to Refinitiv.
In China, a fast-growing market for the company, revenue of US$1.93-billion missed expectations of US$2.22-billion.
Net income came in at US$1.51-billion, or 93 US cents per share, for the quarter ended May 31, compared with a loss of US$790-million, or 51 US cents per share, a year earlier.
Total revenue nearly doubled to US$12.34-billion from a year ago, when the pandemic was at its peak. Analysts were expecting revenue of US$11.01-billion and earnings of 51 US cents per share, according to IBES data from Refinitiv.
Billionaire Richard Branson’s spaceship company Virgin Galactic (SPCE-N) soared after it said on Friday it received approval from the U.S. aviation safety regulator to fly people to space, turning up the pressure on rivals in the nascent and expensive space tourism sector.
The approval from the Federal Aviation Administration (FAA) comes at a critical time for Mr. Branson as his space venture faces off against Amazon founder Jeff Bezos’ Blue Origin and Tesla Inc boss Elon Musk’s SpaceX.
Mr. Branson, Mr. Bezos and Mr. Musk have been investing billions of dollars on their rocket startups.
Mr. Branson, who is reportedly flying to space himself in a bid to beat rival billionaire Bezos to the final frontier, received the green light just a month after a successful test flight.
Virgin Galactic last month completed its first manned space flight from its new home port in New Mexico in May, as its SpaceShipTwo craft with a capacity of six passengers glided to a landing on a runway safely with its two pilots.
“Today’s approval by the FAA ... gives us confidence as we proceed toward our first fully crewed test flight this summer,” Virgin Galactic Chief Executive Officer Michael Colglazier said in a statement.
On the decline
Waterloo, Ont.-based security software supplier Blackberry Ltd. (BB-T) was lower despite beating the Streets estimates for quarterly revenue, lifted by a rebound in demand for its QNX operating software and cybersecurity products.
Revenue fell to US$174-million in the first quarter ended May 31 from US$206-million a year earlier, but beat analysts’ average estimate of US$171.25-million, according to Refinitiv-IBES data.
Demand for cybersecurity services have been on the rise as businesses increasingly migrate to cloud-based computing to support remote work during the COVID-19 pandemic.
A boom in electric-vehicle sales has also bolstered demand for BlackBerry’s QNX software, primarily used in cars.
Net loss in the quarter narrowed to US$62-million, or 11 US cents per share, from US$636-million, or US$1.14 cents per share, a year earlier.
The company was also one of the “meme stocks” that received major attention from investors after a social-media driven retail short-squeeze frenzy. BlackBerry’s shares are up over 90 per cent so far this year.
Dye & Durham Ltd. (DND-T) slipped after it said late Thursday a special committee of its board has appointed JPMorgan and Scotiabank as its financial advisers for a strategic review in response to a buyout offer worth about $3.4-billion.
The special committee is still reviewing the proposal of the management-led shareholder group, the Canadian cloud-based software maker said, adding that it has not made decisions on specific strategic alternatives as yet.
Last month, Dye & Durham had said a newly formed special committee of independent directors would explore and evaluate potential strategic alternatives, including a merger, the sale of the company or its parts, and the sale of some of its assets.
“There can be no assurance that the exploration of strategic alternatives will result in a transaction,” it said in a statement.
The special committee has engaged Osler, Hoskin & Harcourt LLP, and Norton Rose Fulbright Canada LLP as legal advisers in connection with the review.
Led by Chief Executive Matthew Proud, Dye & Durham makes technology products for legal and business professionals, providing them access to government registry data, and simplifying the document search process, its website shows. It has operations in Canada, the United Kingdom, Ireland and Australia.
Shares in U.S. delivery firm FedEx Corp. (FDX-N) fell after hiring difficulties tempered its 2022 earnings forecast that missed Wall Street expectations.
FedEx founder and CEO Fred Smith told analysts that operations at the Memphis-based company are being crimped by an inability to find enough workers.
Widespread labour shortages are hitting FedEx in the form of “higher wage rates and lower productivity, particularly in the (current fiscal) first quarter, and this is reflected in our overall outlook for the year,” Chief Financial Officer Mike Lenz said.
FedEx expects 2022 earnings, excluding some items, of US$18.90 to US$19.90 per share - less than analysts’ average estimate of US$20.37, according to Refinitiv data. That sent its shares down.
Data from Convey Inc shows FedEx lags both UPS (UPS-N) and the U.S. Postal Service when it comes to on-time deliveries.
Staffing challenges “contributed to recent service levels that do not meet our own high expectations,” Chief Operating Officer Raj Subramaniam said.
For example, failure to recruit package handlers sends overtime costs up and requires parcels to be routed away from regions with inadequate labor, Subramaniam said.
The firm recently suspended freight shipping for roughly 1,400 customers to help relieve pressure on its network - which has been running at near full tilt for much of the pandemic.
FedEx expects the labour situation to improve over the next two or three months as it starts preparing for the peak holiday shipping season, CFO Lentz said.
FedEx also reported a slightly higher than expected increase in profit and revenue for the fourth quarter that ended May 31.
Adjusted net income nearly doubled to US$1.36-billion, or US$5.01 per share, from the year-earlier quarter. Revenue increased 30 per cent to US$22.6-billion.
Analysts had expected fourth-quarter earnings of US$4.99 per share and revenue of US$21.5-billion, according to Refinitiv.
FedEx shares finished Thursday’s trading session up roughly 150 per cent from March 1, 2020 - some two weeks before U.S. states and jurisdictions began closing businesses to curb the spread of the coronavirus.
The sale comes as the bicycles-to-hair dryers conglomerate is seeking to reduce its dependence on Tesla and raise cash for investments.
Panasonic’s battery business is dominated by Elon Musk’s Tesla, but the two firms have had a tense relationship at times with executives trading barbs publicly.
Panasonic bought 1.4 million Tesla shares at US$21.15 each in 2010 for about US$30-million. That stake was worth US$730-million at the end of March 2020. The shares have gained almost seven fold since then and closed up 3.5 per cent on Thursday.
“The impact of crypto assets may have pushed Tesla’s share price above its intrinsic value, making it a good time to sell,” said Hideki Yasuda, an analyst at Ace Research Institute.
Mr. Musk said in February his firm bought bitcoin and would take payment in the cryptocurrency, a decision he later reversed, and his comments on Twitter drive swings in the price of such assets.
While Panasonic gave financial backing to Tesla when it was smaller, the automaker’s expansion means there’s no need for capital ties, Yasuda added. Panasonic’s shares closed up 4.9 per cent on Friday.
The stake sale will not affect the partnership with Tesla, the Panasonic spokesperson said, and was made as part of a review of shareholdings in line with corporate governance guidelines.
With files from staff and wires