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

On the rise

Halifax-based Clearwater Seafoods Inc. (CLR-T) jumped 11.9 per cent after announcing it has initiated a formal strategic process “to identify, review and evaluate a broad range of potential strategic alternatives available to it with a view to continuing to enhance shareholder value.”

On Tuesday, the company reported fourth-quarter sales of $167.1-million up from $159.8-million a year earlier. Its net loss attributable to shareholders was $17.6-million or 27 cents per share versus a loss of $12.3-million or 19 cents a year earlier.

Adjusted earnings were $8.3-million or 13 cents versus adjusted earnings of $4.8-million or 7 cents a year earlier. Analysts were expecting adjusted EPS of 10 cents and revenue of $173-million.

Descartes Systems Group Inc. (DSG-T) rose 6.5 per cent after its quarterly results, released after the bell on Wednesday, exceeded the Street’s expectations.

In a research note released before the bell, Laurentian Bank Securities analyst Nick Agostino said: “DSG noted it observed a slowdown in volume active (approximately 50 per cent of its recurring revenue stream) in China in February related to seasonality, holidays and the Coronavirus, and we believe the virus may have a similar effect on volumes in other countries as it continues to spread. The good news is that DSG noted volume activity began to recover entering March, as Chinese employees returned to work, port activity picked up and the government made a concerted effort to tackle the virus.”

U.S. supermarket chain Kroger Co. (KR-N) rose 8.1 per cent after its quarterly profit beat analysts’ estimates on Thursday, helped by higher demand for its private-label brands.

Excluding one-time items, the company earned 57 US cents per share, beating analysts’ average estimate of 55 US cents, according to IBES data from Refinitiv.

Gross margin came in at 22.1 per cent for the fourth quarter ended Feb. 1. Analysts had forecast it at 21.91 per cent.

On the decline

Shares of Cineplex Inc. (CGX-T) fell 8.1 per cent after a short-seller suggested the company’s $2.8-billion deal to be acquired by Cineworld PLC could fall apart or see the price reduced materially.

In a series of tweets, Hindenburg Research says the stock market is significantly underestimating the chances that Cineworld will seek to break or modify the deal.

Hindenburg, which said it is short Cineplex shares, raised concerns about the debt involved in the deal and said the new coronavirus has put pressure on theatre operators. The release of the James Bond movie No Time To Die was pushed back by several months this week due to concerns about COVID-19.

Crescent Point Energy Corp. (CPG-T) lost 5.7 per cent with the release of its fourth-quarter results before the bell on Thursday.

The Calgary-based company reported a quarterly loss of $932.1-million or $1.73 per share versus a loss of $2.390.5-billion or $4.35 a year earlier. Adjusted net earnings were $49.9-million or 9 cents per share versus an adjusted loss of $16.3-million or 3 cents a year earlier. Analysts were expecting adjusted earnings of 12 cents for the most recent quarter.

AltaCorp Capital analyst Patrick O’Rourke said: “Overall, we view the event as neutral, with slight beats on both the production and cash flow fronts, partially offset by higher than anticipated capital spending. In our view, most of the key reserve efficiency metrics (i.e. PDP recycle ratio) are either noisy or not meaningful for the 2019 calendar year given the magnitude of A&D, but we do believe that the Company provided investors with a very high quality data point in providing a reserve value calculation at a US$55.00/bbl flat price deck that pointed to a $3.75 PDP NAV/sh, which is supportive of the current $3.51 share price.”

Canadian Natural Resources Ltd. (CNQ-T) was down 1.6 per cent after it missed fourth-quarter profit estimates on Thursday, as the oil and gas producer took a hit from a fall in oil prices.

The company cut its 2020 capital expenditure by $100-million to $3.95-billion, citing volatile state of the current crude oil price environment, and increased quarterly dividend increase by 13 per cent.

Quarterly production rose about 7 per cent to 1.2 million barrels of oil equivalent per day (boepd) as producers were allowed exemptions on the cuts enforced by the Alberta government if they committed to move oil by rail instead of pipelines.

The company reported a net income of $597-million, or 50 cents per share, in the fourth quarter ended Dec.31, compared with a net loss of $776-million, or 64 cents per share, a year earlier.

On an adjusted basis, the company earned 58 cents per share, missing analysts’ average estimate of 70 cents, according to Refinitiv IBES data.

See also: The Teck megaproject is dead, but there’s still hope in the oil sands

Spin Master Corp. (TOY-T) plummeted 39.3 per cent after saying Wednesday after the bell it swung to a loss in the fourth quarter in part because of supply chain issues at its U.S. distribution centre, and it expects further supply impacts this year because of the novel coronavirus.

The Toronto-based toy company, which reports in U.S. dollars, says it lost $17.2-million for the three months ending Dec. 31, compared with earnings of $11.4-million a year earlier. The adjusted loss was 7.8-million or eight cents per share, compared with an adjusted profit of $6.2 million or six cents per share in the prior year.

The loss came despite revenue coming in at $473.5-million in the quarter, up from $414.3-million in the same quarter a year earlier.

MEG Energy Corp. (MEG-T) slid 0.2 per cent after it reported a profit of $26-million in its latest quarter compared with a loss of $199-million in the same quarter a year earlier.

The company says the profit amounted to nine cents per diluted share for the quarter ended Dec. 31 compared with a loss of 67 cents per diluted share in the last three months of 2018.

Revenue totalled $992-million, up from $520-million in the fourth quarter of 2018.

Bitumen production in the quarter averaged 94,566 barrels per day, up from 87,582 in the same quarter a year earlier

Canopy Growth Corp. (WEED-T) lost 5.6 per cent after saying late Wednesday it plans to close two massive greenhouses in British Columbia and lay off 500 employees, as the cannabis grower seeks to slow its cash burn and bring its production in line with lower-than-expected demand for legal marijuana.

The moves, announced on Wednesday, are expected to result in a pretax charge of between $700-million and $800-million, the company said.

Canopy acquired a stake in the two greenhouses, in Aldergrove and Delta, B.C., in 2017, as part of a joint venture with an established agricultural company. The greenhouses, which were originally built for vegetable cultivation, have a combined growing space of roughly three million square feet.

- Mark Rendell

In response to the announcement, an equity analyst at Laurentian Bank Securities upgraded Canopy shares before the bell on Thursday.

Exxon Mobil Corp. (XOM-N) slid 4.4 per cent after saying on Tuesday it would stick to its spending plans even as its rivals trim costs, Two years into an ambitious growth plan to revive earnings at the largest U.S. oil company.

Oil prices are down over 20 per cent this year and natural gas prices have touched their lowest in decades, as fears of the economic impact of the coronavirus dent short-term demand.

The long-term industry outlook too is clouded by a push toward cleaner fuel and pressure from investors for higher returns.

Exxon’s Chief Executive Officer Darren Woods said the company would spend between US$30-billion and US$35-billion a year through 2025 and forecast US$33-billion in capital expenditure this year.

The company is “mindful of the current market environment,” but will stay with its strategy of “leaning into this market when others have pulled back,” Exxon’s Chief Executive Darren Woods said at the company’s annual investor day meeting.

Exxon is likely “in for another tough year,” said Biraj Borkhataria, analyst with RBC Europe Limited. With weak oil and gas prices and muted refining margins, Exxon will “barely” cover its capital spending with free cash flow and its dividend coverage will be “the worst” among its rivals, he said.

On Tuesday, Exxon’s closest U.S.-rival Chevron Corp. (CVX-N) showed off its own war chest by highlighting it has up to US$80-billion that it could use for shareholder returns over the next five years regardless of the price that oil trades at.

Shares of Chevron was off 1.4 per cent on Thursday.

See also: Exxon outlines its steps to reduce harmful methane emissions

Apache Corp. (APA-N), a Houston-based energy company, was down 3.1 per cent on the heels of saying on Wednesday it has revamped its organizational structure to three teams and named new leaders for two of them, a week after taking a more than US$1-billion write down on its once prized Alpine High assets.

The company said in October it had undertaken a redesign of its organizational structure and operations.

Apache said its current pipelines and transportation head Clay Bretches will lead the operations team, which will look over drilling and completion, facilities and production engineering as well as environment, health and safety.

Wells Fargo & Co. (WFC-N) decreased 6 per cent after a Congressional report released on Wednesday said it is not complying with the terms of multiple settlements related to its sales scandal.

The U.S. House of Representatives Financial Services Committee released the findings of its year-long probe into the bank ahead of hearings next week that will see its new chief executive, Charles Scharf, and its chair, Betsy Duke, testify before the committee for the first time.

Drawing on internal emails and meeting notes, the report paints a picture of a complacent Wells Fargo board and management who did not take seriously settlements the bank agreed with federal regulators between 2016 and 2018 to resolve charges it had abused customers.

A spokeswoman for Wells Fargo said the bank was reviewing the report.

Specifically, according to the report, Wells Fargo’s board of directors allowed management to repeatedly submit materially deficient plans to regulators in response to the consent orders. The report said the regulators, for their part, failed to hold Wells Fargo accountable for its wrongdoing.

American Eagle Outfitters Inc. (AEO-N) dipped 7.9 per cent after beating estimates for fourth-quarter results after the bell on Wednesday, as more shoppers bought its Aerie leggings, bras and underwear.

The company has been focusing on promoting a body-positive image, especially for its Aerie brand, with the launch of new styles in various sizes at affordable prices.

Aerie has been a major growth driver for the company, driven by double-digit comparable sales increases over the last three years.

The brand recently added actors Lana Condor and Ali Stroker as well as actors and writers Beanie Feldstein and Hari Nef to its Role Model campaign, as it furthers its image as an inclusive brand.

Citi analyst Paul Lejuez said: “AE comps are expected to be down in 1Q (more than offset by strength at aerie), suggesting AE is not in the clear yet. In addition to headwinds at AE, we see risk of Covid-19 negatively impacting demand in 2020 (which is not currently being accounted for in guidance). Given these concerns, we remain on the sidelines.”

HP Inc. (HPQ-N) slid 0.3 per cent after it rejected Xerox Holdings Corp.'s (XRX-N) raised takeover bid of about US$35-billion, saying it undervalued the personal computer maker.

The U.S. printer maker last month increased its offer by US$2 to US$24 per share, after its previous buyout offers were rejected by the PC maker for the same reason.

Chip Bergh, chair of HP’s board, said the offer would leave shareholders with an investment in a combined company that is burdened with an irresponsible level of debt.

“(It) would subsequently require unrealistic, unachievable synergies that would jeopardize the entire company,” Mr. Bergh said in a statement.

He pointed to declining sales at Xerox and said its recent sale of its interest in the Fuji-Xerox joint venture raised concerns about the company’s future position.

Xerox were down 6 per cent.

With files from staff and wires

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 4:00pm EDT.

SymbolName% changeLast
WFC-N
Wells Fargo & Company
+1.64%57.61
TOY-T
Spin Master Corp
+0.99%34.64
CNQ-T
Canadian Natural Resources Ltd.
+0.39%102.44
AEO-N
American Eagle Outfitters
+1.58%25.14
WEED-T
Canopy Growth Corp
+32.55%12.95
XOM-N
Exxon Mobil Corp
+1.04%114.97
DSG-T
Descartes Sys
-0.38%124.95
CVX-N
Chevron Corp
+0.7%156.35
MEG-T
Meg Energy Corp
+0.72%30.85
KR-N
Kroger Company
+0.9%56.9
CPG-T
Crescent Point Energy Corp
+1.3%10.95
HPQ-N
HP Inc
+0.43%30.12
CGX-T
Cineplex Inc
-0.81%7.37

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