A roundup of some of the North American equities making moves in both directions today
On the rise
Shopify Inc. (SHOP-T) jumped 7.7 per cent on Thursday after it raised its full-year revenue forecast and reported a quarterly profit that handily beat Street estimates, as the Canadian e-commerce company’s investments to attract customers to its product offerings paid off.
Gross merchandise volume (GMV), a widely watched figure for the e-commerce industry’s performance, rose 51 per cent to $13.8-billion, the company said.
The company, which is looking for a larger slice of the e-commerce industry, dominated by players including Amazon and eBay, is investing heavily to attract merchants to its tools and websites.
Shares of Thomson Reuters Corp. (TRI-T) were 1.8 per cent higher after it raised its sales and core profit outlook for 2019 and 2020 on Thursday after reporting 4-per-cent organic revenue growth in the second quarter, which it said was its best since 2008 and ahead of its expectations.
Growth was driven by recurring revenues at all three of its biggest units since the news and information provider sold a majority in its Financial and Risk business, now known as Refinitiv, to Blackstone last year - Legal, Corporates and Tax & Accounting.
Spin Master Corp. (TOY-T) jumped 12.2 per cent after the company’s quarterly profit topped estimates.
On Wednesday after market close, the Toronto-based toymaker reported adjusted earnings per share of 19 US cents, exceeding the consensus on the Street by 6 US cents.
theScore Inc. (SCR-X) was up over 15 per cent after it announced late Wednesday a “major expansion” of its U.S. mobile sports betting platform through a multi-state market access framework agreement with Penn National Gaming Inc. (PENN-Q), North America’s largest regional gaming operator.
In connection with the agreement, Penn National has also agreed to take a strategic equity stake in theScore, the company stated. It said the 20-year agreement provides theScore with the right to obtain market access to offer online and mobile sports betting and i-gaming applications in 11 states where Penn National operates casinos and racetracks.
Deeming it a “strong" quarter for the Toronto-based company, Raymond James analyst Tara Hassan said: “Financial results were ahead of consensus and RJL expectations on the back of slightly better costs. Island Gold continues to be the star of the show ad the major contributor to cash flow, which we expect will continue into 2020 until the lower mine tie-in is complete at Young Davidson. While Alamos remains one of the better positioned intermediates with respect to its balance sheet and quality of its underlying assets, we continue to expect that relative valuation and lack of near-term production growth relative to its peers may impact investor sentiment.”
TC Energy Corp. (TRP-T), formerly TransCanada Corp., rose 0.6 per cent after it reported a 43.3-per-cent rise in second-quarter profit on Thursday, helped by higher volumes of crude shipped on its Keystone Pipeline System.
The Calgary-based company’s net income attributable to shareholders rose to $1.13-billion, or $1.21 per share, in the quarter ended June 30, from $785-million, or 88 cents per share, a year earlier.
Revenues rose to $3.37-billion from $3.20-billion.
On the decline
Desjardins Securities analyst Benoit Poirier said: “While results were mainly in line with the pre-released results on July 22, we believe the segmented results further demonstrate the challenging performance of the construction business and support management’s decision to exit LSTK construction projects. We also support SNC’s decision to cut the dividend given the ongoing pressure on the balance sheet.”
The Calgary-based company reported cash flow for the quarter of $2.22 per share, slightly exceeding the expectation on the Street of $2.20. Production of 1,025,800 barrels of oil equivalent per day fell slightly below the consensus estimate of 1,040,000 boe/d.
In a research note, AltaCorp Capital analyst Nick Lupick said: “Overall we view the update as being neutral for the stock as financial results came in in line with AltaCorp estimates and Consensus, while production saw a small miss due to well telegraphed outages in the Oil Sands mining operations having a larger than anticipated impact on the quarter.”
Sun Life Financial Inc. (SLF-T) was down 2.6 per cent after it reported a 1.4-per-cent growth in second-quarter profit on Wednesday after market close, helped by growth in its asset management business.
Bombardier Inc. (BBD-B-T) was down 15.9 per cent after it reported a larger quarterly loss than analysts had expected on Thursday morning, and lowered its full-year earnings forecast, as the company wrestled with challenges in its key rail division.
The plane and train maker posted a net loss of $36-million, or 4 cents per share, in the second quarter ended June 30, compared with a profit of $70-million, or 2 cents per share, a year earlier.
Bombardier also reduced its adjusted core earnings forecast for the full year to a range of $1.20-billion to $1.30-billion, from its previous forecast of $1.50-billion to $1.65-billion.
Desjardins Securities analyst Benoit Poirier said: “Overall, we expect a negative reaction given the lower-than-expected 2Q results and the downward revision to 2019 guidance, explained by additional investments/costs at BT. On the positive side, we note solid results across the board and favourable comments for the Global 7500, which is proceeding as planned.”
Hudbay Minerals Inc. (HBM-T; HBM-N) fell over 21 per cent announced that it will appeal an “unprecedented” court decision related to its Rosemont project in Arizona.
On Wednesday, the U.S. district court for Arizona ruled that the U.S. Forestry Service had erred when it issued a permit for the mine in 2017. After that permit was issued, a number of local environmental and native communities objected to the construction of the mine, arguing it would devastate parts of the local habitat. Rosemont was set to be built in Arizona’s Coronado National Forest.
Industrial Alliance Securities analyst George Topping said: “The loss of growth to replace the 777 mine (closing 2021) removes a major reason for buying. However, post the recent proxy fight, three major investors, including Waterton (Private), own 38 per cent of the company. It’s too late to sell so we advise holding for current investors and buying within the customary 3-day trading period post bad news.”
Painted Pony Energy Ltd. (PONY-T) was down 14 per cent after it announced a reduction in capital spending for 2019 — from $95-million to $110-million to $80-million to $95-million — to ensure the company “maintains its current financial flexibility in the current low commodity price environment.”
In response to the news, an equity analyst at National Bank Financial downgraded its stock.
Turquoise Hill Resources (TRQ-T) lost 8 per cent after it announced second-quarter revenue of US$382.7-million, a 12-per-cent increase on a year-over-year basis, which the company stated was “primarily reflecting the large increase in gold production as Oyu Tolgoi benefitted from the processing and sale of Phase 4 ore in [the second quarter of 2019] that contained higher gold content.”
Analysts were expecting revenue of US$347.2-million.
Its net loss was US$736.7-million, versus income of US$204.4-million a year ago.
“The principal reason for this change is the impairment charge of $0.6-billion recorded in [the second quarter of 2019],” the company stated.
Citi analyst Christopher Danely lowered his financial expectations for the company, noting: “We believe Qualcomm’s long-term operating margin target of 40 per cent and F19 EPS guidance of $6.75-$7.50 (excluding SBC) are too aggressive due to increasing competition in chipsets and pressure on its licensing business. We would note the company has not achieved 40-per-cent operating margins since 2005.”
Beyond Meat Inc. (BYND-Q) plummeted 10.4 per cent after announcing late Wednesday a secondary offering of 3.25 million new shares would be priced at US$160 per share, an 18.6-per-cent discount to the stock’s closing price.
With the new offering, of which 250,000 shares are being offered by the company, the company is looking to raise US$40-million in new capital to expand manufacturing facilities and pay for marketing investments.
General Motors Co. (GM-N) erased early gains and lost 0.5 per cent after it posted a better-than-expected net profit on Thursday as high-margin pickup trucks, SUVs and crossovers helped overcome slowing sales in the United States and China, and reiterated its full-year earnings forecast.
With files from Niall McGee, Brenda Bouw, staff and wires