A roundup of some of the North American equities making moves in both directions today
On the rise
Barrick Gold Corp. (ABX-T) increased 2.2 per cent after it said on Thursday it expects a 8.5-per-cent drop in first-quarter gold production, as the COVID-19 pandemic forced miners to scale back operations and shutdown mines.
The mining industry has been bracing for a prolonged drop in commodity prices and has been worried that the coronavirus outbreak could fuel a rare simultaneous drop in both supply and demand for metals used to power the global economy.
Barrick said it expects gold output of 1.25 million ounces for the first quarter, compared with 1.37 million ounces a year earlier.
The preliminary figure puts Barrick on course to meet its outlook for the year despite the impact of coronavirus-led lockdowns, Chief Executive Officer Mark Bristow said.
The miner said last month it would stockpile key commodities to prepare for the possibility that the pandemic could shutter its mines.
Barrick, the world’s second-largest gold miner with operations across the globe, had forecast full-year attributable gold production in the range of 4.8 million ounces to 5.2 million ounces.
Abbott Laboratories Inc. (ABT-N) rose 5.5 per cent after it beat quarterly profit estimates on Thursday as stay-at-home orders prompted customers to stockpile its nutrition products but the company suspended its full-year forecast due to the coronavirus-led uncertainty.
Shelter-in-place restrictions imposed by U.S. states boosted sales of Abbott’s nutrition products for children such as PediaSure, but crimped demand for its medical devices and non-coronavirus testing kits.
Sales in its diagnostics unit fell nearly 1 per cent to US$1.83-billion as increased use of its tests for the fast-spreading virus failed to offset a decline in demand for its other diagnostic tests.
The company has launched three coronavirus tests in the United States, including an on-site diagnostic kit that can deliver results within minutes and heralded as a game changer by President Donald Trump.
Analysts said a strong flu season prior to the outbreak helped minimize the hit from a decline in testing volumes toward the end of the quarter.
The results were driven by softer-than-expected negative impact across businesses from COVID-19, said J.P. Morgan analyst Robbie Marcus.
“We expect to see a more profound impact on Abbott’s results in (the second quarter), as several markets were not significantly impacted until late-March,” he wrote in a client note.
Costco Wholesale Corp. (COST-Q) rose 3.6 per cent after it said on Wednesday it would raise its quarterly dividend by 7.7 per cent to 70 US cents per share, at a time when several major companies have suspended cash returns to shareholders to shore up liquidity.
Unlike the rest of corporate America, which has been hammered by the coronavirus crisis, grocery retailers and some packaged-food companies have seen sales surge in recent weeks, as consumers stockpile household essentials to weather strict lockdowns across the United States.
Costco, which last week reported a 9.6-per-cent jump in March comparable sales, joins Procter & Gamble and Johnson & Johnson which also raised their dividends earlier this week.
The world’s biggest asset manager BlackRock Inc. (BLK-N), increased 3.5 per cent in the wake of seeing the capital it manages fall by almost $1 trillion in the first quarter as investors pulled money out of its marquee funds amid the most damaging stock market selloff in more than a decade.
The company, a huge figure on global financial markets, reported a 23-per-cent drop in quarterly profit on Thursday, as investors preferred cash management services, while costs rose.
The company ended the first quarter with US$6.47-trillion in assets under management, down from US$7.43-trillion in the final quarter of 2019.
BlackRock’s operating expenses surged 43 per cent to US$3.03-billion.
The New York-based company’s net income fell to US$806-million, or $5.15 per share, in the first quarter ended March 31, from US$1.05-billion, or US$6.61 per share, a year earlier.
Alphabet Inc. (GOOGL-Q) was up narrowly after Google chief executive officer Sundar Pichai told the company’s staff in a memo on Wednesday that it will slow hiring for the rest of the year.
“We’ll be slowing down the pace of hiring, while maintaining momentum in a small number of strategic areas, and onboarding the many people who’ve been hired but haven’t started yet,” a Google spokesperson said.
On the decline
Canopy Growth Corp. (WEED-T) dropped 2.2 per cent after it said on Thursday it plans to shut down its Canadian indoor facility in Yorkton, Sask., and also cut about 85 full-time positions.
Canopy will also exit its operations in South Africa and Lesotho, as a part of the ongoing strategic review of its businesses, the company said.
Among other changes, the Ontario-based company said it will cease operations at its cultivation facility in Colombia, and will source the raw materials from local suppliers.
Canopy will also halt farming in Springfield, New York, citing an abundance of hemp produced in the growing season last year.
Canada legalized recreational cannabis in October 2018 but profits have proven elusive for most marijuana companies as fewer-than-expected retail stores, higher prices than on the black market and slow overseas growth resulted in oversupply.
The Smiths Falls, Ont.-based producer said it expects to record estimated pre-tax charges of approximately $700-800-million in the quarter ending March 31.
Magna International Inc. (MG-T) slid 1.3 per cent after president Swamy Kotagiri said Wednesday it is planning for a return to production in North America on May 4, with a subsequent gradual increase in output as the industry recovers from the shutdown caused by the coronavirus pandemic.
“As we stand today, we have everything in place as if the plants are coming back on May 4,” Magna President Swamy Kotagiri said in a telephone interview.
The auto industry has already reopened in China, where Magna has some plants back at 80 per cent capacity, and is just now restarting operations in Europe. In the United States, General Motors Co , Ford Motor Co and other companies are waiting for the go-ahead from various governors but are aiming for an early May restart.
Mr. Kotagiri said there is “no written play book” for the pandemic and understands production could be further delayed, but he is ready if that happens. What would worry him more would be restarting and then having to stop again.
The company, which owns and operates seniors living residences, says restrictions on residence visits during the pandemic are expected to hurt occupancy levels as it is not permitting visits by prospective residents.
Chartwell says it believes occupancy in its retirement residences will be temporarily affected as a result of reduced move-in activity.
Morgan Stanley (MS-N) was 0.1 per cent lower after it posted a 32-per-cent fall in quarterly profit on Thursday as its advisory and wealth management businesses took a hit from the economic fallout of the COVID-19 pandemic.
The results capped first-quarter earnings from big U.S. banks, marked by significant declines in profit and billions in provisions to cover for a wave of expected loan defaults due to a global economic slowdown triggered by the pandemic.
Morgan Stanley’s wealth management unit, which contributes roughly half of its total revenue, fell 8 per cent to US$4.04-billion, as it bore the brunt of the ongoing turmoil in financial markets.
The wealth business, which the bank has relied on as a reliable source of revenue during periods of market volatility, reported a pre-tax margin of 26.1 per cent, below the bank’s target range of 28-30 per cent.
“Over the past two months, we have witnessed more market volatility, uncertainty and anxiety as a result of the devastating COVID-19 than at any time since the financial crisis,” Chief Executive Officer James Gorman said.
The bank’s trading desks were a bright spot with a 30-per-cent surge in revenue, boosted by wild swings in markets during the quarter. This was led by a 29-per-cent jump in bond trading and a 20-per-cent rise in equities
Ford Motor Co. (F-N) declined 1.8 per cent after it said on Thursday that its China vehicle sales in the first three months this year fell 34.9 per cent from a year earlier to 88,770 units, as the novel coronavirus epidemic hit demand in the world’s biggest auto market.
The Dearborn, Michigan-based company said, however, all its dealers in China had resumed work and its sales in March had returned to 75 per cent of the same period last year.
In China, Ford makes cars through Jiangling Motors Corp Ltd (JMC), in which it has a stake, and a joint venture with Chongqing Changan Automobile Co Ltd.
Ford has been trying to revive sales in China after its business began slumping in late 2017. Sales sank 26 per cent in 2019, after a 37-per-cent drop in 2018. In 2017, its China sales fell 6 per cent from a year earlier.
WSP Global Inc. (WSP-T) was down 0.5 per cent after withdrawing its 2020 guidance due to “unprecedented uncertainty” prompted by the COVID-19 pandemic.
The engineering firm has seen several projects delayed and postponed some capital expenditures as lockdowns snarl construction activity across the globe.
However, WSP remains relatively stable amid the crisis and says clients are “generally” staying committed to their projects, particularly in the public sector, which accounted for 56 per cent of revenues last year.
The virus has also triggered new government-funded assignments, including an emergency isolation room expansion at a Montreal hospital and advisory services for health care facilities in the United Kingdom.
United Airlines Holdings Inc. (UAL-Q) plunged 11.5 per cent after it said late Wednesday that it has cut its flight schedule by 90 per cent in May and expects similar cuts for June as a result of the coronavirus pandemic, and warned that travel demand that is now “essentially at zero shows no sign of improving in the near term,” making job cuts likely.
United disclosed its outlook in a memo to employees that it publicly released. The memo was from Chief Executive Oscar Munoz and President Scott Kirby.
Like other U.S. airlines, travel demand for Chicago-based United has cratered as most U.S. states have ordered residents to stay at home in order to contain spread of the coronavirus.
United said it flew less than 200,000 people in the first two weeks of April, a 97-per-cent drop from the more than 6 million people it flew during the same time in 2019. It expects to fly fewer people during the entire month of May than it did on a single day in May of last year, Mr. Munoz and Mr. Kirby said.
ConocoPhillips (COP-N) was down 3.5 per cent after it said on Thursday it would curtail gross production by 225,000 barrels of oil per day, suspend its share repurchase program and further cut its capital spending to weather a rout in oil prices.
The company said it was currently cutting back production due to low prices for Canadian crude and expects to reduce production at its Surmont oil sands facility in Canada by about 100,000 barrels of oil per day (bpd).
ConocoPhillips plans to begin curtailing production across 48 U.S. states from May, with an initial cutback of 125,000 bpd.
With files from staff and wires