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A roundup of some of the North American equities making moves in both directions

On the rise

Thomson Reuters Corp. (TRI-T) jumped after its second-quarter results beat analysts’ estimates on Thursday, with higher sales across its main divisions, as it raised its annual revenue forecast.

Underscoring its outlook, which was fueled by a recovering global economy, the global news and information company said on Thursday it would buy back up to US$1.2-billion of its shares.

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Thomson Reuters said it is monitoring whether the spread of the Delta variant of COVID-19 is affecting its businesses, but did not expect a major impact in 2021.

“We do not think that there is a significant financial impact for our customers, and therefore for us through the rest of this year,” Chief Executive Steve Hasker said, adding that the course of the pandemic was unpredictable.

The Thomson Reuters print and events businesses are among the areas most vulnerable in case of a worsening of the COVID-19 situation, Chief Financial Officer Michael Eastwood added.

Thomson Reuters, the parent company of Reuters News, said its total revenues rose 9 per cent to US$1.53-billion, compared to expectations of US$1.5-billion.

Adjusted earnings per share of 48 US cents also topped analyst expectations, based on data from Refinitiv, marking the fifth consecutive quarter that Thomson Reuters’ adjusted earnings topped Wall Street estimates.

BCE Inc. (BCE-T) was higher after it reported higher second-quarter profit and revenue as the economy rebounded from the COVID-19 pandemic.

BCE had $734-million in net earnings for the three-month period ending June 30, up nearly 150 per cent from $294-million during the same period last year. The earnings amounted to 76 cents per share, up from 26 cents per share a year ago.

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The company attributed the rise to increased spending by consumers and businesses as the economy improved, lower impairment charges on its media assets and gains on derivatives used for hedging. That was partly offset by higher depreciation and amortization costs as well as increased income taxes.

BCE’s revenue for the quarter totalled $5.7-billion, up 6.4 per cent from a year ago, when the company reported $5.35-billion in revenue.

Analysts were expecting $5.76-billion in revenue, according to the consensus analyst estimate from S&P Capital IQ.

- Alexandra Posadzki

Canada’s two biggest life insurers, Manulife Financial Corp. (MFC-T) and Sun Life Financial Inc. (SLF-T), headed in opposite directions after they beat analyst estimates for second-quarter underlying earnings, as strong income growth at their asset management units helped boost their results from a year earlier.

Core earnings from Manulife’s global wealth and asset management business jumped nearly 50 per cent to $356-million in the three months ended June 30 from the same period last year, while Sun Life increased asset management earnings by 20 per cent to $311-million.

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Earnings at Manulife, Canada’s top insurer, were also supported by 7.6-per-cent growth in its Asian operations, helping offset weakness in Canada and the United States, where core earnings fell 7 per cent and nearly 21 per cent respectively.

Sun Life, however, posted a 34-per-cent increase in underlying earnings in its U.S. business due to lower death and health claims. Asia and Canada lagged with smaller increases, of 6 per cent and 3 per cent respectively, hampered by expenses in Asia and higher death claims in India, along with lower investment activity in Canada.

All of Canada’s biggest life insurers have benefitted from strong asset management performance, with Great-West Lifeco also reporting earnings that beat analyst estimates on Tuesday, thanks to its U.S. business, stronger equity markets and higher fee revenue.

Manulife posted profit excluding one-off items of 83 cents a share, from 78 cents a year earlier, beating estimates of 77 cents.

Sun Life’s underlying profit increased to $1.50 a share from $1.26 a year earlier. Analysts had expected $1.47.

Canadian Natural Resources Ltd. (CNQ-T) rose in the wake of posting a better-than-expected profit for the second quarter, buoyed by higher oil prices, which rebounded from pandemic-driven lows.

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Oil and gas producers have bounced back this year as COVID-19 vaccinations allowed some countries to ease pandemic-related curbs, supporting higher crude prices.

Canadian Natural said if pipeline operator Inter Pipeline’s takeover by Brookfield succeeds, it plans to increase its 2021 capital budget by $275-million to $3.48-billion. Canadian Natural owns about 6.4 million shares of Inter.

The company said average realized prices for crude rose 16.2 per cent to $61.2 per barrel in the second quarter, from the first.

The company, which operates in the Canadian provinces of Alberta, northeastern British Columbia and Saskatchewan, produced 1.14 million barrels of oil equivalent per day (boepd) in the reported quarter, compared to 1.25 million boepd in first quarter.

On an adjusted basis, the company posted a net income of $1.24 per share in the quarter ended June 30, while analysts had expected 92 cents per share, according to Refinitiv IBES data.

Bombardier Inc. (BBD.B-T) saw gains as it raised its full-year estimates for both revenue and business jet deliveries on Thursday, as it benefits from a rebound in demand for private jets after the pandemic sapped sales last year.

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It expects to deliver 120 business jets in 2021, compared with its prior forecast of between 110 and 120 units. Bombardier expects full-year revenue to be more than $5.8-billion, up from its previous estimate of more than $5.6-billion.

Aircraft deliveries rose 45 per cent to 29 units in the second quarter, reflecting strong demand for large-category jets.

Business jet revenue jumped 50 per cent to $1.5 billion, fueled by increases in both aircraft deliveries and services, Bombardier said.

The company has said it expects improved revenue this year from sales of business aircraft in the United States, the world’s largest market for corporate jets.

Rivals Textron and General Dynamics Corp’s Gulfstream Aerospace have said they are raising production to meet the rebound in demand.

Montreal-based Bombardier posted an adjusted net loss of $137-million, or 6 cents per share, in the quarter ended June 30, compared with a loss of $248-million, or 11 cents, a year earlier.

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Score Media and Gaming Inc. (SCR-T) soared after announcing it has entered into a definitive agreement to be acquired by Penn National Gaming Inc. (PENN-Q) for approximately US$2.0-billion in cash and stock.

Under the agreement, which has been unanimously approved by both company’s boards of directors and is expected to close in the first quarter of 2022, Score shareholders will receive US$17.00 in cash and 0.2398 shares of Penn National common stock for each theScore share.

RioCan Real Estate Investment Trust (REI.UN-T) gained ground after saying its net income reached $145.3-million in its latest quarter as all of its tenants were able to reopen from COVID-19 lockdowns.

The Toronto-based trust says its second-quarter net income is a turnaround from the same period last year when it reported a $350.8-million net loss.

The trust says it completed more than 130,00 square metres (1.4 million square feet) of new and renewed leases during the quarter ended June 30 and 232,200 square metres (2.5 million square feet) so far this year.

As of Aug. 4, all of the trust’s tenants were open following lockdowns and only 3.2 per cent of the quarter’s rent remained uncollected.

RioCan says it collected 94.9 per cent of its second-quarter billed gross rents in cash, down from 95.1 per cent in the first quarter of the year.

The trust says the vast majority of tenants with deferred rents have been paying based on definitive payment schedules and RioCan has collected 91.5 per cent of deferred rents billed to date.

“Ongoing momentum in leasing activity drove positive trends in occupancy and further strengthened the quality of our income as tenants continue to be attracted to our exceptionally well-located properties,” says Jonathan Gitlin, the trust’s chief executive and president, in a release.

“We remain focused on investing in the strength of our stable foundation, surfacing the value inherent in our portfolio and capitalizing on the numerous opportunities available to us to augment our income as we accelerate our growth trajectory and drive long-term value.”

Lightspeed POS Inc. (LSPD-T) was up as it surged past expectations Thursday, posting revenue gains well ahead of expectations and increasing its financial forecast for the year, as the Montreal commerce software provider benefited from reopening economies.

The company booked US$115.9-million in revenue during its first quarter, which ended June 30, more than 20 per cent higher than analyst expectations as well as its own revenue forecast in the low-to-mid US$90-million range. That was 220 per cent higher than the same period a year before, when the company’s restaurant-and-physical-retailer customers were hit by shutdowns during the early part of the pandemic. Lightspeed’s net loss of US$49.3-million was more than double its US$20.1-million loss a year earlier, but analysts pay closer attention to its adjusted net loss, which was 5 cents per share, better than the 9 cent loss they were expecting

Lightspeed’s results were helped by a trio of acquisitions of competitors Vend, ShopKeep and Upserve, but even factoring out the impact of those deals, it posted a strong 78-per-cent increase in its core subscription and transaction revenues. The company’s hospitality customers, in particular, accounted for a 380-per-cent revenue growth year over year, while transaction revenue – driven by customers’ adoption of its payment-processing service – surged by 453 per cent, to US$56.5-million.

- Sean Silcoff

See also: Lightspeed, Shopify enter ‘Braveheart battlefield’ after year of deals turns software companies into rivals

After its second-quarter results blew past the Street’s forecast, shares of Gildan Activewear Inc. (GIL-T) were finished flat on Thursday.

Before the bell, the Montreal-based clothing manufacturer reported adjusted earnings per share of 68 US cents, topping analysts’ expectations of 52 US cents.

In a research note, Desjardins Securities’ Chris Li said: “The outperformance was broad-based (stronger sales, gross margins and SG&A leverage). The highlight is on adjusted EBIT margin, which came in at 19.9 per cent, well above our 16.3-per-cent estimate, and more importantly, higher than management’s target of 18.0 per cent. This should increase investors’ confidence in the longer-term margin outlook as sales recover to pre-pandemic levels. As a result of the strong recovery to date and the progress of GIL’s ‘Back to Basics’ strategy, and with the prospects for continued strong FCF generation, the company reinstated its share repurchase program (up to 5 per cent of shares effective August 9, 2021), supported by a very strong balance sheet with net debt/EBITDA of only 0.6 times, below its target of 1–2 times.”

TMX Group Ltd. (X-T), the operator of the Toronto and Montreal exchanges, gained after saying on an analyst call it has seen retail trading volumes up 37 per cent in the second quarter versus two years ago, and are up between 60 per cent and 80 per cent in its retail investor-focused indexes.

The group, which reported adjusted earnings that beat analyst expectations in the three months through June, also said that, contrary to expectations, the pipeline for equity capital raisings has not slowed during the summer.

TMX Group also expects a “substantial increase” in long-term bond issuances to fund large government expenditures, and that will help drive the derivatives market linked to these products, which the company has been expanding in.

Late Wednesday, it announced it beat analyst estimates for second-quarter core profit, which rose from a year earlier due to increased revenue and an increase in the company’s share of earnings from the Boston Options Exchange (BOX).

Adjusted net income was $107.1-million, or $1.90 a share, in the three months ended June 30, from $86.6-million, or $1.52, a year earlier. Analysts had expected $1.72.

The Montreal exchange, which focused on derivatives trading, owned 43 per cent of BOX as of Dec. 31.

Maple Leaf Foods. Inc. (MFI-T) jumped after saying it expects its meat protein business margins and plant-based foods revenue growth to make a full recovery in the second half of 2021 as it reported a plunge in its second quarter net profit.

The Ontario-based food processing company said Thursday it earned $8.8-million in its latest quarter, down nearly 66 per cent from $25.7-million a year earlier, despite a six per cent growth in revenues. That amounted to seven cents per share, down from 21 cents per share in the second quarter of 2020.

Maple Leaf Foods president and CEO Michael McCain said the company anticipated headwinds in its second quarter.

But he said the company has remained focused on sustainable, long-term growth and is on track to improve its meat margins and grow its plant protein sales.

“There’s too much short-termism in the marketplace today and we’re looking beyond that,” Mr. McCain told analysts during a conference call. “We continue to advance our vision to become the most sustainable protein company on earth and continue building long-term value.”

Adjusted profits fell 20 per cent to 28 cents per share from 35 cents per share in the prior year quarter.

Revenues for the three months ended June 30 were $1.16-billion, up from $1.09-billion in the 2020 quarter.

Uber Technologies Inc. (UBER-N) reversed an early decline as it reported widening losses even as trips and deliveries grew as driver incentives hit revenue at the ride-hail and food delivery company.

Uber posted an adjusted US$509-million second-quarter loss before interest, taxes, depreciation and amortization - a metric that excludes one-time costs, including stock-based compensation - widening losses by nearly US$150-million from the first quarter.

The company also warned investors that uncertainty from the Delta variant of the coronavirus continues to impact visibility into recovery.

Analysts on average had expected the company to report an adjusted EBITDA loss of around US$324.5-million, Refinitiv data showed.

But Uber reaffirmed its goal of hitting profitability on an adjusted EBITDA basis at the end of this year and said it would reduce losses to US$100-million in the third quarter.

Uber said riders returned to its platform in greater numbers in July and it expects the trend to continue in the coming months, together with strong food delivery orders.

On the decline

Quebecor Inc. (QBR.B-T) was flat in the wake of the premarket release of stronger-than-anticipated second-quarter results.

The Montreal-based media and telecommunications company reported revenue and adjusted earnings per share of $1.13-billion and 65 cents, respectively, exceeding the Street’s forecast of $1.08-million and 62 cents.

In a research note, Desjardins Securities Jerome Dubreuil said: “Earlier this morning, QBR reported financial results which exceeded expectations, while subscriber numbers were generally in line with consensus. The EBITDA beat was mostly driven by the strong performance in media. The recurrence of the media beat may be unlikely as we believe it mostly originated from the Montreal Canadiens’ strong showing during the NHL playoffs. While we do not expect commentary relating to the possible wireless expansion outside of Québec that is materially different from what was said last Friday (July 30), we believe investor focus remains on that aspect of the business strategy.”

With files from staff and wires

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