A roundup of some of the North American equities making moves in both directions today
On the rise
Methanex Corp. (MX-T) was up 9.1 per cent after it announced late Wednesday that it has amended its $300-million committed revolving credit facility and $800-million non-revolving construction facility.
“These changes amend and waive certain terms and conditions of the credit facilities, which will provide meaningful financial covenant relief and greater flexibility on the timeline to complete the Geismar 3 project,” said the Vancouver-based company.
Stingray Group Inc. (RAY.A-T) increased 7.7 per cent after it swung to an $8.5-million loss in the fourth quarter of its fiscal year as radio revenues declined due to the initial impact of the COVID-19 pandemic.
The Montreal-based company, which provides an advertising-free music service, says it lost 11 cents per diluted share for the period ended March 31.
That compared with a profit of six cents per share or $3.9 million a year earlier.
Excluding one-time items, adjusted earnings fell 31.4 per cent to $10.1-million or 13 cents per share, down from $14.7-million or 21 cents per share in the final quarter of 2019.
Desjardins Securities analyst Maher Yaghi said: "RAY reported results for 4Q FY20, which included about two weeks of the pandemic. Revenue was below expectations while adjusted EBITDA surpassed expectations. However, removing what we consider one-time items brings the numbers within Street estimates.
“While challenges during the pandemic are significant, we believe they are temporary. Moreover, we expect the significantly reduced cost structure will help RAY generate decent FCF.”
Guyana Goldfields Inc. (GUY-T) increased 15.7 per cent after it announced it has received a takeover offer from a foreign-based multinational mining company which its board has unanimously determined to be a “superior proposal” than a previous bid by Silvercorp Metals Inc. (SVM-T).
The company said the new offer is for $1.85 per share in cash, valuing the company at $323-million. The new bidder has also agreed to provide the company with a US$30-million secured loan facility to finance ongoing operations of the Aurora gold mine and to fund other liquidity needs.
Silvercorp has five business days to match the offer, the company says.
Its shares were up 8.4 per cent.
Charles Schwab Corp. (SCHW-N) rose 5.5 per cent after it said on Thursday it has received anti-trust approval from the Department of Justice for its purchase of TD Ameritrade Holding Corp. (AMTD-Q).
Charles Schwab last November agreed to buy TD Ameritrade in an all-stock deal valued at US$26-billion. The merger could create a brokerage giant in a market that has been ravaged by price wars.
Shares of TD Ameritrade were up 9 per cent.
See: How Charles Schwab landed a one-two punch that forced Toronto-Dominion Bank against the ropes
Charles Schwab’s takeover of TD Ameritrade will slowly erode TD’s lucrative cash management deal
American Airlines Group Inc. (AAL-Q) jumped over 41 per cent in the wake of saying Thursday it will boost its U.S. flight schedule next month over dramatic reductions since the coronavirus pandemic, planning to fly more than 55 per cent of its July 2019 domestic capacity.
The largest U.S. airline will also boost its international flights schedule next month, flying nearly 20 per cent of its July 2019 schedule.
By comparison, American flew just 20 per cent of its domestic schedule in May and is flying 25 per cent in June, said Vasu Raja, American Airlines’ senior vice president of network strategy.
“As an airline, we’ve consciously bet on demand coming back. We have bet the economy,” Raja said, noting American has been operating a larger schedule than U.S. rivals.
Mr. Raja told Reuters that the airline would fly just over 4,000 flights on peak days in July compared with nearly 2,000 on peak days in May. That is still down from the peak 6,800 daily flights before the crisis.
EBay Inc. (EBAY-Q) was up 6.3 per cent after it raised current-quarter revenue forecast on Thursday, as people stuck at home due to the COVID-19 pandemic ordered more from the e-commerce platform.
The company now expects second-quarter revenue to be between US$2.75-billion and US$2.80-billion, compared with earlier estimate of US$2.38-billion to US$2.48-billion.
Ford Motor Co. (F-N) was up 6.1 per cent as it reported year-on-year sales growth for May in its China ventures in a sign of how the world’s biggest auto market is continuing its recovery from coronavirus-induced lows.
The U.S. automaker’s Chongqing-based venture with Changan sold 23,491 vehicles in May, up 130 per cent from a year earlier, it said on Thursday.
Jiangling Motors Corp (JMC), in which Ford owns a stake, said in a filing on Wednesday that it sold 29,008 vehicles last month, up 32 per cent year on year.
Separately, Ford also said that sales of its luxury Lincoln brand in China reached 5,000 units last month, up 22 per cent.
AutoCanada Inc. (ACQ-T) jumped 7 per cent after reporting weaker-than-anticipated first-quarter results after the bell on Wednesday.
The Edmonton-based company reported EBITDA of $5.7-million, well below the consensus projection on the Street of $19-million.
In a research note, Canaccord Genuity analyst Derek Dley said: “Although the quarter was weaker than we had anticipated, we believe investors will be more focused on the update the company provided regarding trends to date in the business, which we view as encouraging. Canadian new and used retail sales improved from being down 54 per cent year-over-year during the last two weeks of March, to a decrease of 49 per cent for April and a decrease of 16 per cent during May, representing a more moderate impact than the company originally anticipated for Q2/20. Importantly, AutoCanada significantly outperformed the broader Canadian new car market for the first two months of Q2/20, with year-over-year declines of 57 per cent and 30 per cent in April and May, respectively, better than the broader market which saw declines of 75 per cent and 44 per cent for the same periods, according to Desrosiers data.”
Tiffany & Co. (TIF-N) was higher by 0.3 per cent after LVMH said early Thursday its board met this week to discuss the fallout from the coronavirus crisis on its US$16.2-billion purchase of the U.S. jeweller, opening the door to a possible attempt to review the deal terms.
LVMH, run by France’s richest man, Bernard Arnault, agreed to buy Tiffany in November, before the retail business was hammered by the pandemic.
Mr. Arnault is now exploring ways to reopen negotiations and potentially pressure Tiffany to lower the agreed deal price of US$135 per share, people familiar with the matter told Reuters, including by examining its compliance with financial covenants.
The French conglomerate, behind brands such as Louis Vuitton, said that its board had this week discussed the potential impact of the pandemic “on the results and perspectives of Tiffany & Co with respect to the agreement that links the two groups.”
On the decline
Onex Corp. (ONEX-T) was down 1.1 per cent after announcing with its partners the sale of 34 million ordinary shares of Clarivate PLC (CCC-N) at an offering price of $22.50 per share.
The total underwritten offering is 48 million, of which 14 million ordinary shares are being offered by Clarivate. The underwriters were granted a 30‑day option to purchase up to 7.2 million additional ordinary shares from the Group.
At the offering price and before the underwriters’ option, gross proceeds to the group will be approximately $765-million, of which Onex’ share will be approximately $166-million.
Shares of Philadelphia-based Clarivate were lower by 2.2 per cent.
See also: Onex posts US$1.1-billion loss, writes down WestJet stake
J.M. Smucker Co. (SJM-N) slid 4.8 per cent after announcing it has forecasted full-year sales to decrease 1 per cent to 2 per cent, citing weakness in sales to restaurants and schools even as the Jif peanut butter maker beat estimates for fourth-quarter results.
Demand for packaged foods has seen an unprecedented spike in recent weeks, as shoppers in the United States continue to stockpile essentials, but it has come at the expense of sales to food service channels, hurt by months-long lockdowns.
“Stock-up purchasing in the fourth quarter is not anticipated to reoccur, and significant declines for the away from home business are expected to persist throughout the year,” Chief Executive Officer Mark Smucker said.
Smucker estimated a US$120-million COVID-19-related hit to fiscal 2021 net sales.
The Orrville, Ohio-based company also forecast fiscal 2021 adjusted earnings per share to be between US$7.90 and US$8.30. The company earned US$8.76 per share in fiscal 2020.
A day after its stock popped 8 per cent on its Nasdaq debut, Warner Music Group Corp. shares (WMG-Q) slid 1.4 per cent.
The world’s third-largest recording label sold shares in its US$1.9-billion initial public offering towards the higher end of its target.
The deal, the biggest U.S. listing so far in 2020, marks a further sign of recovery for the U.S. IPO market, which was hampered in March by plunging stock prices caused by the COVID-19 pandemic.
“We concluded that there was sufficient market momentum. Without ever trying to time the market this looked like a good time to go,” Warner Chief Executive Stephen Cooper said in an interview.
The company increased the offering to 77 million class A shares at US$25 per share, valuing it at US$12.75-billion. It had initially proposed to sell 70 million shares at a target range of US$23-$26 per share.
With files from Brenda Bouw, staff and wires
David Leeder