A roundup of some of the North American equities making moves in both directions today
On the rise
Cineplex Inc. (CGX-T) jumped 5.3 per cent on Thursday after it reported a third-quarter profit of $13.4-million, up from $10.2-million in the same quarter last year as revenue rose 8.3 per cent helped by the new Lion King and Spider-Man movies.
The movie theatre company says the profit amounted to 21 cents per share for the quarter ended Sept. 30 compared with a profit of 16 cents per share a year earlier.
Revenue totalled $418.4-million, up from $386.4-million, as theatre attendance increased 1.8 per cent due to what Cineplex called a stronger film slate compared with last year.
Analysts on average had expected Cineplex to report a profit of 14 cents per share and $418-million in revenue, according to financial markets data firm Refinitiv.
Savaria Corp. (SIS-T) was up 4.9 per cent after it reported third-quarter revenue of $96.4-million, an increase from $72.1-million a year earlier and below expectations of $100.2-million. Adjusted net earnings were $8.1-million or 17 cents per share versus $4.5-million or 10 cents a year ago. Analysts were expecting EPS of 14 cents.
The company also lowered its full-year revenue forecast to a range between $370-million and $380-million.
Viacom Inc. (VIAB-Q), the owner of MTV, Nickelodeon and Comedy Central cable networks, increased 1.9 per cent after it beat analysts’ estimates for quarterly profit on Thursday, helped by a continued rise in domestic advertising revenue.
The company reported a 6-per-cent rise in domestic ad revenue on a constant currency basis, boosted by advanced tools.
Revenue from its filmed entertainment division, which includes Paramount Pictures, fell 14 per cent.
Viacom and CBS Corp. - both controlled by Sumner and Shari Redstone’s National Amusements Inc. - announced in August that they would merge to compete against Netflix Inc, Walt Disney Co, Apple Inc and other media and technology giants.
Boeing Co. (BA-N) was up 1.3 per cent after saying it has abandoned a key automation system used to make fuselage sections for its 777 jetliners amid reports of reliability issues, and will instead partially switch back to mechanics.
The company began to build 777 fuselages in 2015 in an upright orientation, with robots drilling holes and installing fasteners, an initiative known as fuselage automated upright build (FAUB). The world’s biggest plane maker said it had stopped using the system which, according to industry sources, caused problems with reliability and rework issues.
On the decline
Canopy Growth Corp. (WEED-T) plummeted 14.3 per cent after it reported a wider-than-expected quarterly loss on soaring expenses and said it would not make any large investments to expand in Canada amid surplus supply and tepid demand for weed and weed products.
The decision to hold expansion plans follows a wave of enthusiastic spending by marijuana companies to scale up production, expand in new markets and on research after Canada’s legalization of recreational weed last year.
However, demand has not kept up with expectations as the country struggles with a slow roll out of retail stores among other problems.
Canada’s recent legalization of derivative products dubbed Cannabis 2.0 has also failed to generate much hype and estimates for growth have become more cautious.
With Canopy’s decline, other cannabis producers also declined over concerns about the state of the Canadian recreational market.
Freshii Inc. (FRII-T) slid 0.4 per cent after reporting another decline in same store sales growth.
The restaurant chain said growth slid 3.7 per cent in the third-quarter, compared to a drop of 0.8 per cent for the same quarter last year and falling short of the expectations on the Street.
System-wide sales came in at $49.2-million compared to $45.8-million a year ago. Revenue was $5.9-million, which was in line with expectations and up from $5.6-million a year ago.
Laurentian Bank Securities analyst Elizabeth Johnston said: “SSSG of -3.7% was below our -2% forecast, with limited commentary on results in the period. System sales exceeded our forecast, with a higher number of net new store openings offsetting the lower SSSG. Recall that royalty revenue from the CPG business line could have also contributed to the difference versus our estimates, though this number is not expected to be disclosed (and has not been previously).”
Walmart Inc. (WMT-N) slipped 0.3 per cent after it reported better-than-expected third quarter U.S. comparable sales on Thursday and raised its full-year outlook as a strong economy boosted purchases at its stores and website and the retailer picked up market share in food and other groceries.
The world’s largest retailer has now posted a 21-quarter, or more than five-year, streak of U.S. growth, unmatched by any other retail chain.
Consumer spending going in to the crucial holiday season remains healthy, Chief Financial Officer Brett Biggs told Reuters in an interview on Thursday. Retailers earn a sizeable chunk of their annual revenue during November and December.
“The consumer remains in pretty good shape, employment situation is good, fuel prices are low … wage growth is pretty good,” he said.
Cisco Systems Inc. (CSCO-Q) dropped 7.3 per cent after it forecast second-quarter revenue and profit below estimates as the network gear maker struggles to shift to a software-focused company from its business of selling routers and switches.
Analysts have been worried about the impact of the U.S.-China trade war on the company’s sale of switches and routers, as some of these are made in China.
Cisco had said in the last quarter that U.S. tariffs and Chinese customers shunning its network gear was hurting its business.
The company said it expects revenue in the current quarter to drop by 3 per cent to 5 per cent from a year earlier to between US$12.07-billion to US$11.82-billion. Analysts were expecting revenue of US$12.77-billion, according to IBES data from Refinitiv.
Citi analyst Jim Suva said: “While we expect the stock to be under pressure in the near term, we note this has happened before (late 2017) and could happen again. We acknowledge the near term trends are unfavorable and consensus estimates move lower, but in a few Qs, we believe the trends will inflect more positive. We are keeping our Buy rating because we have seen this before and we believe enterprise spending will eventually return to growth. Cisco’s strong cash flow and stock buy back will be positive attributes when growth returns.”
With files from Brenda Bouw, Terry Weber and wires