A roundup of some of the North American equities making moves in both directions today
On the rise
BCE Inc. (BCE-T) rose 2.1 per cent on Thursday after announcing before the bell it has signed its first 5G wireless network supplier agreement with Nokia of Finland, a global rival of China’s Huawei and Ericsson of Sweden.
The parent of Bell Mobility, Virgin Mobile and Lucky Mobile said it’s ready to deliver initial fifth-generation service in urban centres across Canada this year, as 5G smartphones come to market.
The announcement by Canada’s largest telecommunications company came Thursday as its parent BCE Inc. raised its dividend and reported that its fourth-quarter profit grew more than 10 per cent compared with a year ago.
The company said it will now pay a quarterly dividend of 83.25 cents per share, up from 79.25 cents per share.
Semafo Inc. (SMF-T) jumped 9 per cent on Thursday said it expects to restart mining at its Boungou operation in Burkina Faso in the fourth quarter after a deadly attack on a convoy of buses carrying its employees forced it to suspend operations in November.
The company said it had already restarted the plant at Boungou and was implementing a three-month-long phased plan, which includes processing the stockpile and utilizing the on-site supplies inventory along with limiting deliveries of new supplies.
Barrick Gold Corp. (ABX-T) increased 2 per cent after CEO Mark Bristow said on Thursday it is not looking to merge with copper miner Freeport-McMoran Inc. (FCX-N), although he is interested in the company’s Grasberg mine in Indonesia, and indicated he wants to expand in the Pacific Rim.
Rumors the world’s second-largest gold miner planned to combine with Freeport are “completely wrong,” Bristow told Reuters on the sidelines of the Mining Indaba conference in Cape Town.
Net income was $8.7-million or 24 cents per share versus $7.4-million or 20 cents a year earlier. Analysts were expecting revenue of $150.8-million and earnings of 26 cents in the latest quarter.
Desjardins Securities analyst Benoit Poirier said: “Overall, we expect the stock to react positively this morning considering the decent results posted across the board, record backlog and increased guidance for FY20. HRX’s fundamentals are solid and we expect its robust performance to continue going forward. We believe organic growth should accelerate in the near term given recent investments in working capital and the sequential backlog increase of 9 per cent.”
Twitter Inc. (TWTR-N) jumped 15 per cent after it pulled in US$1-billion in quarterly revenue for the first time, beating expectations as efforts to make its platform more user-friendly brought in more people.
Twitter recorded most of its revenue growth in the United States, a major market where the company will this year face scrutiny over its efforts to tackle misinformation around the presidential election in November.
The company has continued its efforts to boost sign-ups through measures such as allowing people to follow topics, and by trying to clean up abusive content. Late last year, it launched a feature for users to hide certain replies on their tweets.
Twitter has also focused on relevant content and notifications, which boosted average monetizable daily active users (mDAU) or user who see ads when logged in through twitter.com or Twitter applications.
That metric rose to 152 million in the fourth quarter from 126 million a year earlier, beating the average analyst expectation of 147.5 million, according to IBES data from Refinitiv.
The company’s quarterly revenue rose 11 per cent from a year earlier to US$1.01 -billion, also beating the expectation of US$996.7-million. Total advertising revenue was US$885-million, an increase of 12 per cent year-over-year.
Bristol-Myers Squibb Co. (BMY-N) rose 2.3 per cent after it said on Thursday its operating profit rose by around a third from a year ago because fourth-quarter results included some revenue from Celgene, which the U.S. drugmaker bought in a US$74-billion deal that closed in late November.
.nue beginning Nov. 20. Analyst estimates for the quarter, however, did not include those sales.
Bristol posted a net loss in the quarter of $1.06 billion, or 55 cents a share. It said results were hurt by one time items, including an accounting adjustment on its inventory and the amortization of some intangible assets it acquired in the quarter.
The company forecast 2020 earnings of $6 to $6.20 per share on revenue of $40.5 billion to $42.5 billion. That compares with average analyst estimates of $6.16 per share on revenue of $42.2 billion, according to IBES data from Refinitiv.
Net income was $8.1-million or 11 cents per share compared to a net loss of $18.1-million or 26 cents per share a year ago. Adjusted net income was $16.7-million or 22 cents per share compared to $12.4-million or 18 cents a year earlier
Analysts were expecting revenue of $81.6-million, earnings of 14 cents and adjusted earnings of 23 cents.
Estee Lauder Cos Inc. (EL-N) rose 5 per cent in the wake of cutting its annual profit forecast, warning of a sales hit of up to US$250-million due to the coronavirus outbreak in China, where it has closed a majority of its stores.
The outbreak of the new virus in the city of Wuhan late last year has hit the country’s retail industry, forcing businesses to temporarily shut stores and factories, with luxury goods makers among the most affected sectors.
The epidemic adds to the troubles the company has faced in the Asia Pacific region as months of protests in Hong Kong also weighed on sales.
Citi analyst Wendy Nicholson said: " We consider Estee Lauder to be one of the strongest long-term growth stories in the HPC group. Specifically, we like: 1) the growth opportunities that the company has in emerging markets; 2) the plans it has in place to improve its profit margins, through reducing both its costs of goods and overhead expenses; and 3) the company’s potential for stronger cash generation, which should enable it to repurchase shares, thereby boosting EPS, and increase its dividend, thereby boosting total shareholder return. Additionally, as it has done in the past, we expect EL to use some of its cash flow to add to its portfolio by acquiring additional prestige beauty brands that can help diversify its business and supplement its organic growth. However, in the near term, we recognize that EL may face some pressure in its highest margin businesses (skin care, China and travel retail) owing both to difficult YoY comparisons and any potential impact from the coronavirus outbreak."
Coach handbag maker Tapestry Inc. (TPR-N) jumped 2.1 per cent in the wake of cutting its annual profit forecast, warning of a sales hit of up to US$250-million due to the coronavirus outbreak in China, where it has closed a majority of its stores.
Tapestry forecast fiscal 2020 earnings of about US$2.15 to US$2.25 per share, compared to its previous outlook of US$2.57 per share. Net sales rose to US$1.82-billion in the second quarter ended Dec. 28, from US$1.80-billion a year earlier, marginally beating analysts’ average estimate of US$1.81-billion, according to IBES data from Refinitiv.
Cigna Corp. (CI-N) rose 2.6 per cent after it forecast 2020 revenue well above Street targets on Thursday, benefiting from its US$52-billion deal for pharmacy benefits manager Express Scripts, and beat fourth-quarter profit estimates as it carefully managed costs.
The acquisition has allowed Cigna to create one of the biggest providers of pharmacy benefits and insurance plans in the United States.
It has also helped it cut costs and compete with industry giants like CVS Health Corp, which bought health insurer Aetna Inc, and UnitedHealth Group Inc’s Optum pharmacy benefits unit.
The company, which closed its deal for Express Scripts in 2018, said it expects adjusted revenue of between US$154-billion and US$156 billion in 2020, beating the average analysts’ estimate of US$148.73-billion.
Casper Sleep Inc.’s (CSPR-N) shares jumped as much as 30 per cent in their debut on Thursday, partially making up for the haircut the online mattress retailer took on its valuation after its offering was priced at the lower end of its expectations.
The stock opened at US$14.50, giving the company a valuation of US$574.6-million, which is still a far cry from the US$1.1-billion Casper had commanded in a private fundraising round last March.
The loss-making company had cut its IPO target range to US$12-US$13 per share from US$17-US$19 per share.
On the decline
Excluding one-off items, the company earned 51 cents per share, missing average analyst estimates of 63 cents, according to IBES data from Refinitiv.
The Calgary-based company posted a loss of $2.3-billion, or $1.52 per share, in the fourth quarter ended Dec. 31, compared with a loss of $280-million, or 18 cents per share, a year earlier.
In a research note, Raymond James analyst Chris Cox said: “Overall, 4Q19 results were largely in-line with Street expectations, notwithstanding the sizeable asset impairment at Fort Hills and West White Rose. The central focus for Suncor continues to be the company’s leading free cash flow profile, supporting a robust cash return story. 4Q19 results were highlighted by an 11-per-cent increase in the dividend, alongside a renewal of the share buyback program for 2020; while those metrics are consistent with our own expectations, the durability of the growing cash return story nevertheless deserves to be highlighted, particularly against the current macro backdrop afflicting the energy sector. Finally, with ESG-related issues playing an increasing role in the sector to start the year, we believe the company’s investments into lower carbon power generation sources (wind farm and cogen facility) could offer some positive momentum in this area; of note, these investments are expected to achieve one-third of the company’s stated target of a 30-per-cent reduction in GHG intensity by 2030.”
Teck Resources Ltd. (TECK-B-T) was 3.3 per cent lower after saying Wednesday its first-quarter steel-making coal sales are being affected by bad weather-related rail and terminal disruptions in British Columbia.
The Vancouver-based company estimated the impact to be around 1 million tonnes, resulting in 5.1 million to 5.4 million tonnes of sales during the period.
High mine site clean coal inventory levels are also expected to limit first-quarter coal production if weather conditions do not improve, the company said.
Saputo Inc. (SAP-T) slid 0.2 per cent after announcing plans to close its facilities in Trenton, Ont., and Saint John as part of “measures aimed at improving its operational efficiency and right-sizing both its manufacturing footprint and sales force in Canada.”
The company said approximately 280 employees will be impacted.
Sources say Morgan Stanley reoffered a block of 11.8 million shares at US$23.75, which is a 1.5-per-cent discount to the stock’s last sale of US$24.11 on Wednesday.
The seller not identified.
The Montreal-based tech firm, said it lost US$15.8-million or 18 US cents per share, compared with a loss of US$71.1-million of US$2.37 per share a year ago.
Revenue for the quarter ended Dec. 31 grew to US$32.3-million from US$20.1-million in the third quarter of 2018. Recurring software and payments revenue in the quarter increased 58 per cent to US$28.4-million.
Lightspeed was expected to lose US$6.4-million or 9 US cents per share on US$32.-million of revenues, according to financial markets data firm Refinitiv.
Raymond James analyst Steve Li said the outlook showed “some conservatism,” adding: “4Q revenue guide of $35.0-35.7-million. Excluding $2.5-million for Gastrofix would imply $33-million (vs. consensus at $35.7-million). Full year revenue expected $120-million. Excluding Gastrofix would imply $118-million vs consensus of $120-million. Adjusted EBITDA for 4Q of a loss of $7-million vs. consensus of a loss of $5-million. With more Payment customers now opting for monthly payment plans (bundled with software) vs. paying one-year upfront contracts, LSPD is withdrawing its previous outlook that CFO would be negative $9.5 to $11-million.”
Yum! Brands Inc. (YUM-N) slid 2.8 per cent on the heels of reporting quarterly same-store sales and profit below market expectations on Thursday, hurt by weaker sales at its Pizza Hut chain.
Pizza Hut is battling more competition, including Domino’s Pizza, local eateries and food delivery apps, which offer a wide selection of restaurants to choose from.
In its bid to beat back competition, Pizza Hut has introduced new concepts such as heated lockers that allow diners to pick up online orders from restaurants and is testing plant-based meat toppings.
Still, same-store sales at the chain fell 2 per cent in the fourth quarter ended Dec. 31, worse than analysts’ expectations of a 0.71-per-cent drop, according to IBES data from Refinitiv.
Overall, sales at Yum’s restaurants open at least a year rose 2 per cent, below the Wall Street estimate of 2.26 per cent.
Excluding one-time items, Yum earned US$1 per share, missing analysts’ estimate by 13 US cents.
Tyson Foods Inc. (TSN-N) plummeted 5.2 per cent after it missed analysts’ estimates for quarterly sales on Thursday, hurt by lower shipments of beef products due to a fire at its Kansas plant in August.
The fire at the company’s Holcomb slaughterhouse curtailed its meat processing operations and left restaurants, food service companies and grocery chains scrambling for beef.
Tyson’s beef sales volume fell 8 per cent in the first quarter.
Overall sales rose 6.1 per cent to US$10.82-billion, but fell short of analysts’ estimates of US$11.04-billion, according to IBES data from Refinitiv.
Excluding items, the company earned US$1.66 per share, in line with expectations.
Breakfast cereal maker Kellogg Co. (K-N) declined 8.5 per cent on Thursday in the wake of forecasting full-year earnings well below market expectations, hurt by the sale of its Keebler cookie business and other assets to Nutella maker Ferrero SpA.
Kellogg, which makes Pringles, Cheez-Its and Pop-Tarts, said it expected adjusted earnings per share to decline by between 3 per cent and 4 per cent in 2020, falling short of the 3.8-per-cent increase analysts had expected, according to Refinitiv.
Over the past year, the Battle Creek, Michigan-based company has undergone a restructuring, hoping to revitalize its business and attract health-conscious consumers who are not buying the sugary cereals that were once a staple of American breakfast tables.
In April, Kellogg sold Keebler and its fruit-flavored snacks, pie crusts and ice-cream cones businesses to Ferrero for $1.3 billion so it could focus on its core cereals and snacks businesses.
The divestments also hurt fourth-quarter sales, which declined 2.8 per cent to US$3.22-billion.
Chip maker Qualcomm Inc. (QCOM-Q) dropped 0.3 per cent after it said on Wednesday that the coronavirus outbreak in China poses a potential threat to the mobile phone industry, with a possible impact on manufacturing and sales.
The comments by Qualcomm, the world’s biggest supplier of “modem” chips that connect mobile phones and other devices to wireless data networks, dragged down chip stock shares despite signs that an industry downturn was ending.
Qualcomm’s chief financial officer, Akash Palkhiwala, on a conference call with investors following the release of quarterly results, said the company expects “significant uncertainty around the impact from the coronavirus on handset demand and supply chain.”
The San Diego-based chip supplier forecast revenue for its fiscal second quarter largely above Wall Street estimates, in the latest sign that the protracted slowdown in the global chip industry is easing.
RBC Dominion Securities analyst Mitch Steves said: “Qualcomm provided a solid quarter and guidance; however, the amount of units expected to ship for Mar-qtr surprised a bit to the downside. We think investors are now debating valuation on a company with potential design out risk (Apple) offset by rising QCT ASPs and healthy operating margins. We think that the valuation is full given these dynamics particularly since 5G use cases (on the consumer side) have yet to materialize. We think infrastructure 5G plays show healthier risk/reward profiles.”
Shares of World Wrestling Entertainment Corp. (WWE-N) dropped 9.1 per cent after its fourth-quarter results and sales forecast fell short of expectations.
The company also warned that new initiatives meant to increase monetization of its content are “subject to considerable uncertainty.”
With files from Terry Weber, Brenda Bouw, staff and wires