A roundup of some of the North American equities making moves in both directions today
On the rise
Ensign Energy Services Inc. (ESI-T) was up 9.8 per cent on Monday after it suspended its quarterly dividend as it reported a loss of $29.3-million in its latest quarter.
The drilling company says it stopped its regular payment of six cents per share due to the COVID-19 pandemic and the plunge in oil prices that has dried up demand for its services.
The move to stop its payment to shareholders follows a decision in March to reduce its capital spending plan for the 2020 to $60-million compared with an original plan for $100-million and cut the pay of its top executives in a move to reduce costs.
Ensign says the loss attributed to common shareholders amounted to 18 cents per share for the quarter ended March 31, compared with a loss of $22.2-million or 14 cents per share a year ago.
Revenue fell to $383.9-million, compared with $445.3-million in the first quarter of 2019.
U.S. drug distributor Cardinal Health Inc. (CAH-N) jumped 6.8 per cent as the pandemic drove a surge in third-quarter sales, which topped market estimates.
Before the bell, the Ohio-based company reported revenue of US$39.2-billion, exceeding the consensus estimate of US$36.95-billion.Earnings per share of US$1.62 topped the expectation of US$1.43.
“While both [the Pharmaceutical and Medical segments] experienced a modest net positive impact in the third quarter from increased volume related to the COVID-19 pandemic, the company expects a significant net negative impact to fourth quarter financial results in both segments,” it said. “This is driven most meaningfully by a decrease in volume related to the cancellation or deferral of elective medical procedures.”
General Mills Inc. (GIS-N) rose 1.8 per cent after it said on Monday it expects to surpass its own expectations for fiscal 2020 organic sales, as people stock their pantries with breakfast cereals and other long-lasting packaged food amid lockdowns.
The company, which makes everything from Cheerios cereal and Blue Buffalo pet foods, also said it expects fourth-quarter organic net sales to increase by double-digits percentage, powered by strong growth in its North America retail and pet segments in March and April.
General Mills already raised its earnings forecast for the year in March as consumers cooked more meals at home and stocked up on packaged and pet foods.
However, with many states easing restrictions in the United States, General Mills said it expects trends to moderate in May but will still remain ahead of pre-coronavirus levels.
It expects to exceed its previous forecast ranges of 1-2-per-cent organic net sales growth, 4-6-per-cent rise in adjusted operating profit, and 6-8-per-cent growth in adjusted profit for fiscal 2020.
AutoNation Inc. (AN-N), the largest U.S. auto dealership chain, gained 2.8 per cent despite swinging to a quarterly loss on Monday, following a massive sales slump in March due to the COVID-19 pandemic and nationwide stay-at-home orders.
Auto dealers have been hit hard by the virus outbreak, with some states temporarily barring new vehicle sales. Sales have plummeted amid the lockdowns aimed at curbing the virus spread.
AutoNation said new vehicle sales were down 10.7 per cent at 56,739 vehicles during the first quarter, while used vehicle volumes declined 8.2 per cent to 56,149 units.
As demand dried up, the company announced cost cuts last month and placed nearly 30 per cent or 7,000 employees on unpaid leave, including temporary pay cuts for staff, curtailed advertising expenses and postponed over US$50-million of expenditures through the second quarter of 2020.
The company’s net loss from continuing operations was US$232.2-million, or US$2.58 per share, in the first quarter ended March 31, compared to a profit of US$92.1-million, or US$1.02 per share, a year earlier.
The quarter included a non-cash impairment charge of US$3.49 per share.
On the decline
Canadian precious metals producer SSR Mining Inc. (SSRM-T) was 4.7 per cent lower after it said on Monday it would acquire Alacer Gold Corp. (ASR-T) in an all-stock deal valued at $2.41-billion to create a diversified gold producer.
Alacer shareholders will receive 0.3246 SSR Mining shares for each share held, implying a value of $8.19 per Alacer share, SSR said in a statement.
Shares of Alacer slid 3.9 per cent.
Tesla’s sales in the first month of each quarter are usually lower than the remaining two months. The industry body said during an online briefing that Tesla produced over 10,000 units in Shanghai last month.
Tesla sold 10,160 vehicles in March, up from around 3,900 units in February, CPCA data showed. CPCA uses a different counting method than Tesla’s deliveries.
On Saturday, Tesla sued local authorities in California as the electric carmaker pushed to re-open its factory there and Chief Executive Elon Musk threatened to move Tesla’s headquarters and future programs from the state to Texas or Nevada.
Mr. Musk has been pushing to re-open Tesla’s Fremont, California, factory after Alameda County’s health department said the carmaker must not reopen because local lockdown measures to curb the spread of the coronavirus remain in effect.
In a blog post on Saturday, Tesla said the county's position left it no choice but to take legal action to ensure Tesla and its employees can go back to work.
The company said it had worked out a thorough return-to-work plan that includes online video training for personnel, work zone partition areas, temperature screening, requirements to wear protective equipment and rigorous cleaning and disinfecting protocols.
Walt Disney Co. (DIS-N) was 1.2 per cent lower after Shanghai Disneyland as the theme park reopened Monday in a high-profile step toward reviving tourism that was shut down by the coronavirus pandemic.
The House of Mouse’s experience in Shanghai, the first of its parks to reopen, foreshadows hurdles global entertainment industries might face. Disney is limiting visitor numbers, requiring masks and checking for the virus’s telltale fever.
China, where the pandemic began in December, was the first country to reopen factories and other businesses after declaring the disease under control in March even as infections rise and controls are tightened in some other countries.
Marriott International Inc. (MAR-Q) slid in the wake of reporting on Mondaya 23-per-cent fall in quarterly revenue, as retailers across the world remained shut due to the COVID-19 pandemic.
Shares of the company, which owns the Ritz-Carlton and St. Regis luxury hotel brands, fell 5.6 per cent, after having declined about 42 per cent this year.
The hotel industry has been crippled by the pandemic that has forced people to cancel bookings and stay at home to contain the spread of the deadly virus.
Marriott said its bookings in Greater China improved in April as the world’s second-largest economy gradually reopened for business.
Last week, rival Holiday Inn-owner InterContinental Hotels also said it was seeing signs of recovery in some markets such as Greater China, after reporting an 80-per-cent plunge in average room revenue in April.
Marriott said its revenue per available room dropped 22.5 per cent to US$84.51 in the first quarter ended March 31 from a year earlier.
Athletic apparel maker Under Armour Inc. (UAA-N) fell 9.6 per cent in the wake of reporting on Mondaya 23-per-cent fall in quarterly revenue, as retailers across the world remained shut due to the COVID-19 pandemic.
The company last month temporarily laid off about 600 staff at its U.S.-based distribution centers, extended store closures and withdrew its forecast for the year as the coronavirus crisis led to lockdowns across the country, limiting business only to online operations.
Several retail and department stores that sell Under Armour merchandise were also closed during the final weeks of the quarter.
“Our results in January and February were tracking well to our plan. Since mid-March, as the pandemic accelerated dramatically in North America and EMEA... we’ve experienced a significant decline in revenue across all markets,” Chief Executive Officer Patrik Frisk said.
The Baltimore-based company reported a net loss of US$589.7-million, or US$1.30 per share, in the first quarter ended March 31, compared with a profit of US$22.5-million, or 5 cents per share, a year earlier.
Net revenue fell to US$930.2-million from US$1.20-billion, below the US$949-million figure forecast by analysts according to IBES data from Refinitiv.
Debt-stricken Chesapeake Energy Corp. (CHK-N) was down 12.2 per cent after it confirmed on Monday it is considering a bankruptcy filing, among other alternatives, as it struggles with an unprecedented rout in oil and gas prices.
Reuters reported last month the shale gas driller was in talks to line up bankruptcy financing.
Chesapeake will not be able to remain in compliance with its financial covenants starting in the fourth quarter of this year, the company said in a filing on Monday.
The company said on Friday it will pay $25 million in incentives to 21 top executives to ensure they are ‘motivated’ through the downturn.
Cosmetics maker Coty Inc. (COTY-N) dropped 7.7 per cent after it said on Monday it had agreed to sell a majority of its professional beauty and retail hair businesses, including Wella and Clairol brands, to investment firm KKR in a deal valued at US$4.3-billion.
Under the deal, the businesses will become a standalone company, with KKR acquiring a 60-per-cent stake and Coty retaining the rest.
Coty also said third-quarter sales declined 23 per cent on a reported basis to US$1.53-billion in the three months ended March 31.
With files from staff and wires