A roundup of some of the North American equities making moves in both directions today
On the rise
The world’s largest gold miner Newmont Corp. (NGT-T) rose 4.3 per cent on Thursday after beating Wall Street estimates for quarterly profit on stronger bullion prices and a boost to production from its newly acquired Goldcorp assets.
The nearly 100-year-old U.S. miner’s average realized gold price jumped 20 per cent to US$1,478 per ounce in the fourth quarter ended Dec. 31, while attributable gold production rose 27 per cent to 1.83 million ounces.
Newmont cemented its position as the world’s largest gold producer following its US$10-billion takeover of rival Golcorp last year, with the new assets helping it almost double adjusted profit in the quarter to US$410-million.
Excluding one-time items, the miner earned 50 US cents per share, beating the average analyst estimate of 48 US cents, according to IBES data from Refinitiv.
Northview Apartment Real Estate Investment Trust (NVU-UN-T) was up 12.8 per cent after Starlight Investments and KingSett Capital announced they’ve signed a deal to buy the Calgary-based REIT in a transaction valued at about $4.8-billion, including debt.
Under the friendly deal, Northview unitholders will have the option to receive $36.25 per trust unit in cash or receive their payment in units in a Canadian high yield multi-residential fund that will be publicly listed on closing.
Northview units closed at $32.50 on the Toronto Stock Exchange on Wednesday.
The Toronto-based miner earning 8 cents cent per share for the quarter, exceeding the consensus projection on the Street by a penny.
RBC Dominion Securities analyst Josh Wolfson said: “Results are in line with expectations, we expect a muted share price reaction.”
IMAX Corp. (IMAX-N) was up 0.4 per cent after releasing better-than-anticipated fourth-quarter results after the bell on Wednesday.
Canaccord Genuity analyst Aravinda Galappatthige said: “Despite a solid Q4/19, we expect the coronavirus impact on China to keep the stock range-bound in the near term. It is already down 16 per cent year-to-date. Management confirmed that all theatres remain closed with no visibility in the near term. As of mid-February China box office is at $6.4-million and compares to the full quarter figure (Q1/19) last year of $105.8-million. Importantly, management indicated that there is no visible sign of a negative impact on box office returns in other Asian nations. While this is a positive, we believe it deserves monitoring.”
Gildan Activewear Inc. (GIL-T) was 2.1 per cent higher after it reported its fourth-quarter profit fell compared with a year earlier as the company also saw sales fall and it recorded a charge related to a shift in strategy.
However, the clothing maker raised its quarterly dividend 15.4 cents from its previous rate of 13.4 cents.
Gildan says it earned US$32.5 million or 16 cents per diluted share for the quarter ended Dec. 29 compared with a profit of US$59.6 million or 29 cents per diluted share a year earlier.
Net sales for the quarter totalled US$658.7 million, down from $742.7 million.
Shares of E*Trade Financial Corp. (ETFC-Q) surged 22 per cent after Morgan Stanley (MS-N) said on Thursday it would buy the discount brokerage in an all-stock deal worth about US$13-billion, the biggest deal by a Wall Street bank since the financial crisis.
The deal will help Morgan Stanley boost its wealth management unit, a business that Chief Executive Officer James Gorman has been trying grow to help it ride out weak periods for trading and investment banking.
E*TRADE has over 5.2 million client accounts with over US$360-billion of retail client assets, adding to Morgan Stanley’s existing 3 million client relationships and US$2.7-trillion of client assets.
E*Trade shareholders will receive 1.0432 Morgan Stanley shares for each share as part of the deal. That translates to US$58.74 per share - a premium of 30.7 per cent to the last closing price of E*Trade shares.
The deal is expected to close in the fourth quarter of 2020.
Morgan Stanley shares were 4.6 per cent lower.
Zillow Group Inc. (Z-Q) jumped 16.8 per cent after reporting a surge in quarterly revenue and a smaller-than-expected loss late Wednesday as more people used its real estate website to buy and sell homes.
Revenue from the company’s home unit, which accounts for more than half of its revenue, ballooned to US$603.2-million in the fourth quarter ended Dec. 31 from US$41.3-million a year earlier.
In a research note, Canaccord Genuity analyst Maria Ripps said: “Zillow’s Q4 results came in well ahead of expectations as the Premier Agent business saw growth accelerate for the second consecutive quarter. Early results from the testing of Flex monetization, where agents pay “success fees” only after closing deals with a Zillow customer, have been positive, and the company is planning to expand tests for high-performing agents in select markets beginning in 2Q20. The Homes segment continues to scale and is nearing a national footprint, with the focus set to shift to driving operational efficiencies and exploring tangential opportunities. As the stock approaches all-time highs, we view this as a transformational quarter, helping to validate Zillow’s major business model changes from the past few years and setting the stage for a new era of growth.”
Domino’s Pizza Inc. (DPZ-N) increased 25.6 per cent after it reported U.S. same-store sales above analysts’ estimates for the first time in over a year, as the pizza chain benefited from its focus on faster delivery and new promotions to lure diners.
Sales at U.S. restaurants open for at least a year rose 3.4 per cent in the fourth quarter, compared with estimates of a 2.3-per-cent rise, according to IBES data from Refinitiv.
The pizza chain has been opening new stores, launching new menu items and offering faster deliveries to battle competition from rival pizzerias, mom-and-pop stores and aggregators such as Uber Eats, Postmates and GrubHub.
Fertilizer producer Mosaic Co. (MOS-N) gained 0.3 per cent after it reported a quarterly loss, compared with a year-earlier profit, as it took more than US$1-billion in charges and as phosphate margins were squeezed by lower volumes as well as prices.
Net loss attributable to Mosaic was US$921-million, or US$2.43 per share, in the fourth quarter ended Dec. 31, compared with a profit of US$112.3-million, or 29 US cents per share, a year earlier.
Excluding items, the loss was 29 US cents per share.
Mosaic Co expects fertilizer demand to bounce back this year after a delayed planting season as well as a prolonged trade war between the United States and China hurt volumes and prices for potash and phosphate in 2019.
The company, which mines and processes phosphate and potash minerals into crop nutrients, said on Wednesday that recent trends were more favorable with global inventories falling and the market tightening.
Supply of phosphate has also declined as the spread of coronavirus in China forced much of the production in Hubei province to be curtailed or idled.
“China is expected to be a key swing factor for phosphate market fundamentals in 2020,” the company said in a statement.
Mosaic’s upbeat comments come at a time when some analysts had feared that high inventory levels and slow recovery in prices could hit earnings of fertilizer producers in the first half of 2020.
The company announced earnings per share of 81 US cents, exceeding the consensus expectation by 2 US cents.
U.S. casino operator MGM Resorts International (MGM-N) was up 0.8 per cent in the wake of admitting on Thursday it was the victim of a data breach last year after an earlier report claimed that details of over 10.6 million hotel guests had been compromised.
“Last summer, we discovered unauthorized access to a cloud server that contained a limited amount of information for certain previous guests of MGM Resorts”, a company spokesman said in an emailed statement.
No financial, payment card or password data was involved in the incident and the guests affected were notified, the statement said.
The majority of information exposed related to the names of guests and their phone numbers, the spokesman added, without confirming the exact number of guests affected.
Technology website ZDNet reported late on Wednesday that the personal details of more than 10.6 million guests who stayed at MGM Resorts hotels were published on a hacking forum this week.
On the decline
Kirkland Lake Gold Ltd. (KL-T) was down 6.8 per cent after increasing its full-year gold production guidance late on Wednesday, after it completed an all-stock deal to buy rival Detour Gold Corp in January.
The company forecast gold production for 2020 between 1.4 million ounces and 1.5 million ounces, up from previous range of 950,00 ounces to 1 million ounces.
Kirkland said it is considering strategic options for its mines at Holt Complex in Canada and in the Northern Territory, Australia, adding that it is designating the assets as non-core as they do not generate adequate returns.
The miner, which has operations in Canada and Australia, said it had added 14.8 million ounces of mineral reserves through the acquisition of Detour Lake Mine.
Loblaw Companies Ltd. (L-T) slipped 1.7 per cent after it reported its fourth-quarter profit rose compared with a year earlier, but the parent company of Loblaws and Shoppers Drug Mart fell short of analysts’ expectations.
The retailer says it earned a profit attributable to common shareholders of $254 million or 70 cents per diluted share for the 12-week period ended Dec. 28.
That compared with a profit attributable to common shareholders of $221 million or 59 cents per diluted share in the same period a year earlier.
Revenue totalled $11.59 billion, up from nearly $11.22 billion.
On an adjusted basis, Loblaw says it earned $1.09 per diluted share for the quarter, up from an adjusted profit of $1.07 per diluted share in the same quarter a year earlier.
Analysts on average had expected an adjusted profit of $1.12 per share, according to financial markets data firm Refinitiv.
The appointment of Mr. Hasker, a senior adviser at private equity firm TPG and former McKinsey & Co media consultant, could be announced as soon as Tuesday, when the Toronto-based company reports its fourth-quarter results, one of the sources said.
In a statement on Wednesday, Thomson Reuters said no decision had been taken by the board yet, but the company will provide an update on the search process when it announces results.
Telus Corp. (T-T) was 3.2 per cent lower after announcing on Wednesday after the bell that it aims to raise about $1.3-billion through a public stock offering, priced at $52 per share.
The offering will be backed by a group of underwriters led by RBC Capital Markets and TD Securities, while CIBC Capital Markets, BMO Capital Markets and Scotiabank will be joint bookrunners.
Telus had said last week that it would begin rolling out its 5G network and its initial module would be with Huawei Technologies Co Ltd’s equipment, flagging concerns of high costs if the Canadian government banned Huawei.
Canaccord Genuity analyst Aravinda Galappatthige said: “The equity raise provides added flexibility for M&A and spectrum auctions. In our view, the company will likely utilize the new financing to reduce leverage, which has ticked up in part because of recent acquisitions across its various business lines, including Competence Call Center and ADT. We expect that post the transaction, leverage will reach 3.1 times (vs 3.3 times previously), declining to 2.8 times by year-end 2020. Lowering the debt load also gives TELUS some flexibility for transactions in the near-medium term, which we believe could include tuck-in acquisitions for TELUS International on its path to an IPO, as well as the upcoming 3.5GHz spectrum auction.”
ViacomCBS Inc. (VIAC-Q) plummeted more than 17 per cent on the heels of posting a 3-per-cent drop in revenue on Thursday as the company reported its first quarterly results since the merger of the two media firms late last year.
Viacom and CBS completed their merger in December in their third attempt since 2016, aiming to beef up their presence in the media industry and fight deep-pocketed players such as Netflix Inc and Walt Disney Co.
The merger reunited media mogul Sumner Redstone’s entertainment empire and brought Showtime networks and CBS News under the same roof as Nickelodeon, Comedy Central and Paramount movie studios.
The company said domestic streaming and digital video business was already generating about US$1.6-billion in annual revenue.
Advertising revenue fell 2 per cent to US$3.03-billion during the quarter as domestic ad revenue was hit by a decline in political ads.
The company said it expects revenue to grow in mid-single digit during 2020.
L Brands Inc. (LB-N) dipped 3.6 per cent after revealing it’s selling a controlling stake in its Victoria’s Secret unit to investment firm Sycamore Partners, valuing the lingerie brand at US$1.1 -billion, as focuses on its core Bath & Body Works brand.
L Brands added that long-time Chief Executive Officer Leslie Wexner would step down from the role after the close of the transaction and become chairman emeritus.
The Columbus, Ohio-based company said Sycamore Partners would own 55 per cent of Victoria’s Secret and take the business private, while L Brands would retain a 45-per-cent stake.
With files from staff and wires