A roundup of some of the North American equities making moves in both directions today
On the rise
Resolute Forest Products Inc. (RFP-T) jumped 16.1 per cent on Thursday despite seeing weaker sales this spring compared with a year ago, as the economic downturn slashed paper shipments by 27 per cent.
The Montreal-based company says it earned US$6-million, or seven cents per diluted share, on sales of US$612 million for the three months ending on June 30.
That’s down from US$25-million, or 27 cents per diluted share, on sales of US$755-million in the second quarter of 2019.
A spike in demand for tissue early in the COVID-19 pandemic sent prices higher but shipments fell amid drained inventory, said the company.
Excluding one-time items, the company’s adjusted loss was 25 cents per share during the quarter, a narrower loss than the 30 cents per share expected by Refinitiv estimates, and compared with a 12 cents per share adjusted profit a year ago. Revenue, however, was softer than the $628-million expected by analysts.
Agnico Eagle Mines Ltd. (AEM-T) rose 3.8 per cent after it raised the low-end of its production outlook for the year after the bell on Wednesday, benefiting from a surge in gold prices and a ramp up in operations after coronavirus-led shutdowns.
Massive stimulus packages to aid economies reeling from pandemic-driven woes and a low interest rate environment have helped drive up gold prices nearly 30 per cent so far this year.
The miner now expects full-year gold output in the range of 1.68 million to 1.73 million ounces, compared with its previous forecast of 1.63 to 1.73 million ounces.
Agnico said average realized price for gold jumped 31 per cent to $1,726 per ounce from a year earlier.
Seven of the company’s eight mines experienced temporary shutdowns or reduced activity due to restrictions imposed to curb the spread of the pandemic.
Excluding items, it earned 18 cents per share, missing analysts’ estimate of 20 cents, according to Refinitiv IBES.
The company’s gold production fell about 20 per cent to 331,064 ounces in the quarter, as the pandemic battered mining activity.
The Toronto tech firm reported revenue and adjusted EBITDA of $118.1-million and $20.9-million, respectively, beating the consensus projection on the Street of $107.6-million and $15.5-million.
Raymond James analyst Steven Li said: “Given share price performance year-to-date (up 146 per cent), there would have been heightened expectations going into the print but this strong across the board beat should continue to provide valuation support.”
United Parcel Service Inc. (UPS-N) on Thursday topped Wall Street estimates for quarterly profit and revenue as the COVID-19 pandemic led to a surge in home deliveries and healthcare shipments, sending its shares up about 14.4 per cent.
Government stay-at-home orders have led to a boom in home deliveries of everything ranging from food to furniture, driving consumer shipments of the company up 65.2 per cent in the quarter.
“Our results were better than we expected, driven in part by the changes in demand that emerged from the pandemic,” said UPS Chief Executive Carol Tomé.
Average daily volumes in the United States jumped 22.8 per cent and reached 21.1 million packages per day.
The surge in volumes comes at a cost as dropping packages on doorsteps is less lucrative than delivering to businesses as it requires more truck miles and stops per route.
Johnson & Johnson (JNJ-N) was up 0.2 per cent in the wake of kicking off U.S. human safety trials for its COVID-19 vaccine after releasing details of a study in monkeys that showed its best-performing vaccine candidate offered strong protection in a single dose.
When exposed to the virus, six out of six animals who got the vaccine candidate were completely protected from lung disease and five out of six were protected from infection as measured by the presence of virus in nasal swabs, according to the study published in the journal Nature.
“This gives us confidence that we can test a single-shot vaccine in this epidemic and learn whether it has a protective effect in humans,” Dr. Paul Stoffels, J&J’s chief scientific officer, told Reuters in a telephone interview.
The drugmaker said it had started early-stage human trials in the United States and Belgium and would test its vaccine candidate in over 1,000 healthy adults aged 18 to 55 years, as well as adults aged 65 years and older.
The U.S. government is backing J&J’s vaccine effort with US$456-million in funding as part of a spending spree aimed at speeding production of a vaccine to end the pandemic, which has infected millions and killed more than 660,000 people.
Procter & Gamble Co. (PG-N) forecast full-year sales and profit above Wall Street expectations on Thursday, benefiting from a surge in demand for detergents and toilet paper as pandemic lockdowns prompt cleaning drives at homes.
Shares of the company rose about 2.8 per cent after it also beat analysts’ expectations for fourth-quarter revenue and profit.
Hunkered down at home, people have focused on housekeeping and better hygiene, driving sales of P&G’s Bounty paper towels, Charmin toilet paper and Tide detergent among other products.
P&G now forecasts fiscal 2021 adjusted profit to rise between 3 per cent to 7 per cent or US$5.27 to US$5.48 per share, while analysts were expecting profit of US$5.23 per share, according to IBES data from Refintiv.
The company also expects sales to grow in the range of 1 per cent to 3 per cent, compared with estimates of a 1.93-per-cent rise.
In the quarter ended June 30, sales from P&G’s fabric and home care unit, its biggest business that makes Ariel detergent and Downy fabric softener saw 11 per cent increase to US$6.29-billion.
Excluding one-time items, the company earned US$1.16 per share above estimates of US$1.01.
Payments processor PayPal Holdings Inc. (PYPL-Q) said on Wednesday after the bell that a surge in e-commerce transactions and new accounts that drove quarterly profits 86 per cent higher was continuing and would support additional investments in mobile-payment tools.
The news lifted the stock by 4.2 per cent. The stock, seen as an e-commerce investment play, was already up 44 per cent since PayPal last reported results on May 6.
The company said it expected the trends to continue and that it now expected earnings per share for the full year to increase about 25 per cent on 22-per-cent revenue growth.
Three months ago, the company had withdrawn full-year guidance because of uncertainty about the economic consequences of the coronavirus pandemic.
“We have more confidence in the elevated e-commerce trends we are seeing,” Chief Financial Officer John Rainey told analysts.
What in late April felt like a potentially short-lived surge of panic buying supported by government stimulus checks has become a “durable and profound behavioral shift,” Mr. Rainey said.
Gildan Activewear Inc. (GIL-T) rose 0.7 per cent after it missed expectations as it reported a large second-quarter loss after sales plunged 71 per cent amid widespread closures of customer stores because of COVID-19.
The Montreal-based company says it lost US$249.7-million or US$1.26 per diluted share, compared with a profit of US$99.7-million or 49 US cents per share a year earlier.
The results included US$224-million of charges, including US$131-million that were COVID-related and US$93-million for initiatives to simplify its offering and cut costs.
Excluding one-time items, the adjusted net loss was US$196.6-million or 99 US cents per share, down from a net income of US$115-million or 56 US cents per share in the prior year’s quarter.
Revenues for the three months ended June 28 were US$229.7-million, compared with US$801.6-million in the second quarter of 2019.
Gildan was expected to report 41 US cents per share in adjusted losses on US$241.4-million in revenues, according to financial markets data firm Refinitiv.
On the decline
TC Energy Corp. (TRP-T) was down 0.2 per cent after it posted a 6-per-cent fall in second-quarter comparable profit on Thursday, partly hurt by a drop in uncontracted volumes of crude transported by its flagship Keystone pipeline due to a slump in energy demand.
Steep declines in oil and gas production, as well as lower demand for refined products, due to coronavirus lockdowns have hurt pipeline operators in the quarter.
TC Energy, however, said it did not expect the pandemic to have any material negative impact on its 2020 earnings or cash flows as most of its earnings come from long-term contracts.
TC Energy is the company behind the controversial Keystone XL pipeline, which has been delayed for more than a decade due to opposition from landowners, environmental groups and tribes.
The company reiterated on Thursday it expects the pipeline to be placed into service in 2023.
It also said it was conducting a review of baseline costs, schedule and the impact of COVID-19 on its Coastal Gaslink pipeline in British Columbia, which has also faced opposition from environmentalists earlier this year.
Comparable earnings fell to $863-million, in the quarter ended June 30, from $924-million, a year earlier.
On a per share basis, it reported earnings of 92 cents, in line with analysts’ estimates.
Net income attributable to common shares rose to $1.3-billion, or $1.36 per share, including a gain of $408-million partly related to the sale of a 65-per-cent stake in the Coastal GasLink pipeline.
Crude prices also weakened after top producers, Saudi Arabia and Russia, decided to flood the market with oil earlier this year.
The company said quarterly production fell nearly 8 per cent to 247,000 barrels of oil equivalent per day (boepd) as Husky shut-in production to help cope up with the fall in crude prices.
Husky said the average realized pricing for its blended crude oil fell to $24.36 per barrel from $67.82 last year.
Its U.S. refinery throughput averaged 187,400 barrels per day (bpd), down from 237,300 bpd.
The Calgary-based company recorded a net loss of $304-million, or 31 cents per share, for the second quarter ended June 30, from a year-ago profit of $370-million or 36 cents per share
Crescent Point Energy Corp. (CPG-T) dipped 6.7 per cent despite releasing second-quarter production and financial results before the bell that largely beat the Street.
The Calgary-based company reported production of 120,800 barrels of oil equivalent per day, topping the consensus projection of 116,800 boe/d. Cash flow per share of 21 cents fell in-line with the analysts’ view.
In a research note, ATB Capital Markets analyst Patrick O’Rourke said: “Overall, we view the event as neutral to modestly positive, with reported results in-line with our estimates and consensus expectations. The Company continues to have 25 mboe/d of production shut-in, and noted it is seeking stability in market conditions before resuming production; with the majority of these volumes now economic or near-economic with the improved pricing environment, investors will likely view these volumes as providing a tailwind to the production/cash flow revision cycle in H2/20 (and potentially for 2021 – in addition to capital and operating cost improvements), or, at the very least, security on the Company’s ability to meet and exceed the current production guidance range for 20.”
Whitecap Resources Inc. (WCP-T) was down 4.3 per cent in the wake of the premarket release of better-than-anticipated quarterly results.
The Calgary-based company announced second-quarter sales of $150.4-million down from $374.7-million a year earlier. Its net loss was $78.3-million or 19 cents per share versus a profit of $58.4-million or 14 cents a year ago. Analysts were expecting a loss of 11 cents
ATB Capital Markets analyst Patrick O’Rourke said: “Overall, we view the event as neutral to modestly positive, with production in-line with our expectations, no change to formal guidance and better than anticipated cash flow largely driven by better than anticipated unit operating costs compared with our model. With capital spend activity/deployment largely limited to CO2 flood purchases and injection execution at Weyburn in H2/20, but a multitude of other quality oily assets in the portfolio, we will be watching closely for price signals that point towards what the 2021 capital deployment strategy will look like, while the business focuses on maintaining financial/capital structure strength and flexibility in the near-term.”
Gold miner Newmont Corp. (NGT-T) was lower by 2.3 per cent after it said on Thursday its quarterly adjusted profit nearly tripled, benefiting from a surge in bullion prices as the COVID-19 pandemic and rising Sino-U.S. tensions boosted demand for safer assets.
The company’s adjusted net income rose to $261 million, or 32 cents per share, in the second quarter ended June 30, from $92 million, or 12 cents per share, a year earlier.
ConocoPhillips (COP-N) slid 5.8 per cent after it reported a wider-than-expected loss on Thursday, as the oil and gas producer was hit by a plunge in crude prices due to a short oil price war and coronavirus-induced lockdowns that sapped demand for fuel.
The pandemic destroyed demand for oil and gas as travel and other businesses came to a halt under lockdowns, forcing widespread output cuts by producers due to oversupply.
ConocoPhillips said it earned US$23.09 for each barrel sold in the quarter ended June 30, compared with its realized price per barrel of US$50.50 a year earlier.
The world’s largest independent oil and gas producer sharply cut about a third of its production early in the second quarter as prices fell, and brought back much of that curtailed volume over June as crude recovered some of the losses.
The Houston-based company’s production, excluding Libya, fell to 981,000 barrels of oil equivalent per day (boepd) in the quarter, down 309,000 boepd from a year earlier.
Kraft Heinz Co. (KHC-Q) was lower by 3 per cent after it reported quarterly results that exceeded expectations and took a nearly US$3-billion charge to write down the value of several businesses, including its Canadian foodservice segment, Oscar Mayer deli meat and Maxwell House coffee brands.
Second-quarter sales grew 3.8 per cent to US$6.65-billion, beating analyst expectations for US$6.54-billion, according to Refinitiv.
Revenue from Kraft Heinz’s U.S. business rose 8.5 per cent to US$4.9-billion in the quarter ended June 27, as it ramped up inventory and grew sales across nearly all its retail categories.
The company, which makes Planters peanuts and Philadelphia cream cheese, was also able to raise prices due to less promotional activity.
Kraft Heinz wrote down the value of four reporting units by nearly US$1.8 billion, including charges at its U.S. and Canadian foodservice businesses, that supply restaurants, cafeterias and cafes.
“The foodservice impairments reflect the possibility of slightly lower longer-term growth rates in light of COVID-19 impacts, and we’ve adjusted our long-term growth outlook for Canada Retail given its recent history and FX (foreign exchange),” Kraft Heinz’s head of communications, Michael Mullen, said in an email.
The writedowns to some of its brands were driving by “longer-term margin expectations due to investments and competition,” he added.
Eli Lilly and Co. (LLY-N) dipped 5.4 per cent after it said on Thursday it had started mid-stage testing of one of its experimental treatments for COVID-19, as the drugmaker reported second-quarter sales that missed estimates due to the pandemic.
The company has been working on two antibody treatments, LY-CoV555 in partnership with Canadian biotech AbCellera, and another being developed with Chinese drugmaker Shanghai Junshi Biosciences Co Ltd.
Lilly told Reuters last month it could have a drug specifically to treat COVID-19 and authorized for use as early as September, if either of the two antibodies prove successful in trials.
The company said on Thursday LY-CoV555 had moved to mid-stage trials, while the other treatment had demonstrated safety and tolerability to move into further stages of development.
Lilly’s quarterly sales missed estimates, as it took a nearly US$500-million hit due to the COVID-19 pandemic.
Lilly, which beat second-quarter profit estimates, also raised its full-year profit forecast.
The company now expects 2020 adjusted earnings between US$7.20 and US$7.40 per share, from its prior range of US$6.70 to US$6.90 per share.
On an adjusted basis, Lilly earned US$1.89 per share, beating analysts’ estimates of US$1.56 per share, according to IBES data from Refinitiv.
With files from staff and wires