A roundup of some of the North American equities making moves in both directions today
On the rise
The Montreal-based tour company that owns Air Transat says it will begin a gradual resumption of operations with plans for 23 international routes over the summer as well as some domestic operations.
Transat, which is in the process of being acquired by Air Canada, has suspended all of its flights since April 1 due to the pandemic and resulting border closures.
The announcement of the plan to resume flying came as Transat reported a loss of $179.5-million or $4.76 per diluted share in the quarter ended April 30 compared with a loss of $939,000 or 2 cents per diluted share a year ago.
Revenue in what was the company’s second quarter fell to $571.3-million compared with $897.4-million in the same quarter last year.
On an adjusted basis, Transat says it lost $38.8-million or $1.03 per share for the quarter compared with an adjusted loss of $6.4-million or 17 cents per share in the same quarter a year ago.
HEXO Corp. (HEXO-T) jumped 6.7 per cent after reporting better-than-anticipated third-quarter results, due in part to a jump in sales for its Original Stash brand.
The marijuana producer’s adjusted loss before interest, taxes, depreciation and amortization narrowed to $4.3-million from $8.5-million a year earlier.
Grubhub Inc. (GRUB-N) shares increased 5.2 per cent after European food ordering firm Just Eat Takeaway.com NV said on Wednesday it had agreed to buy its U.S. peer in an all-stock deal that, if completed, would create the world’s largest food delivery company outside China.
The deal would create “a company built around four of the world’s largest profit pools in food delivery: the U.S., the UK, the Netherlands and Germany,” the companies said in a joint statement.
The merger would open up a new market to Just Eat Takeaway, which has strong positions around Europe and in Canada.
For Grubhub, the deal offers an escape from the antitrust concerns that plagued its talks with the Uber Eats division of ride-hailing firm Uber Technologies Inc. (UBER-N).
Chicago-based Grubhub, which has a market cap of about US$4.3-billion, was approached by Uber in May for an all-stock deal that fell apart this week.
Uber shares were down 8.1 per cent.
Moderna Inc. (MRNA-Q) sat 2.8 per cent higher after it confirmed it plans to start a trial of 30,000 volunteers of its much-anticipated coronavirus vaccine in July as the company enters the final stage of testing.
The Cambridge, Massachusetts-based biotech said the primary goal of the study would be to prevent symptomatic COVID-19, the disease caused by the novel coronavirus. The key secondary goal would be prevention of severe disease, as defined by keeping people out of the hospital.
Moderna said it has selected the 100-microgram dose of the vaccine for the late-stage study. At that dose level, the company is on track to deliver about 500 million doses per year, and possibly up to 1 billion doses per year, starting in 2021 from the company’s internal U.S. manufacturing site and strategic collaboration with Swiss drugmaker Lonza.
On the decline
Bombardier Inc. (BBD.B-T) slid 13.8 per cent after announcing plans to cut up to 600 jobs in its Northern Ireland operations, as part of plans announced last week to cut 2,500 jobs or about 11 per cent of the workforce in its global aviation unit.
The cuts include 400 core workers and up to 200 workers from its “complementary labour force” of temporary and agency workers, a Bombardier spokeswoman said.
The Unite union said it had been informed of plans to cut 600 positions.
The Canadian firm, which produces wings for Airbus’s A220 jet in Belfast, is the largest high-tech manufacturer in Northern Ireland with a workforce of around 3,500.
“We deeply regret the impact this will have on our workforce and their families, but it is crucial that we resize our business in line with market realities in these unprecedented circumstances,” Bombardier said in a statement.
The cuts will allow the firm to “align with market demand for the remainder of this year and through 2021,” it said.
Walt Disney Co. (DIS-N) slid 5.9 per cent after announcing it plans to reopen the Disneyland Park and Disney California Adventure park on July 17, pending approval from state and local authorities.
The theme parks based in Anaheim, California have been shut since March 14 to help curb the spread of the COVID-19 pandemic.
Disney also plans to reopen its Grand Californian Hotel & Spa and Paradise Pier Hotel on July 23.
The Disneyland Resort visitors will have to obtain a reservation for park entry in advance, the company said in a statement, as it aims to limit capacity in order to maintain physical distancing.
Experiences like parades and nighttime spectaculars that typically draw larger crowds, as well as character meet-and-greets will be temporarily unavailable, Disney said.
Desjardins Securities analyst Kyle Stanley said: “We are encouraged to see BSR progress on its portfolio transformation, notwithstanding the current level of economic uncertainty in the U.S. related to COVID-19. The acquisition takes advantage of the tax deferral provided by the 1031 exchange program on the back of US$70-million of non-core dispositions completed earlier in 2Q. Holding other factors constant, the transaction should be incrementally positive to our 2020–21 FFO outlook, which does not contemplate acquisition activity beyond what was completed in 1Q20.”
Spirit AeroSystems tumbled 14.1 per cent.
Spirit, which makes the 737 fuselage, said the temporary layoffs and furloughs of roughly 900 workers at its Wichita, Kansas, facility would be effective June 15. The company cited impacts of the COVID-19 pandemic and uncertainty surrounding the 737 MAX’s return to service following fatal crashes as reasons for the cuts.
Spirit’s announcement comes two weeks after Boeing said it resumed production of the 737 MAX, with a goal of handing jets over to airlines in the third quarter.
Eli Lilly and Co. (LLY-N) lost 2.4 per cent after its chief scientist told Reuters it could have a drug specifically designed to treat COVID-19 authorized for use as early as September if all goes well with either of two antibody therapies it is testing.
Lilly is also doing preclinical studies of a third antibody treatment for the illness caused by the new coronavirus that could enter human clinical trials in the coming weeks, Chief Scientific Officer Daniel Skovronsky said in an interview.
Lilly has already launched human trials with two of the experimental therapies.
The drugs belong to a class of biotech medicines called monoclonal antibodies widely used to treat cancer, rheumatoid arthritis and many other conditions. A monoclonal antibody drug developed against COVID-19 is likely to be more effective than repurposed medicines currently being tested against the virus.
With files from staff and wires