A roundup of some of the North American equities making moves in both directions today
On the rise
The Toronto-based movie exhibitor says 164 theatres, 1,687 screens and 10 entertainment complexes will be in operation again by Friday.
Cineplex has gradually been reopening its locations over the last few weeks following closures related to the COVID-19 pandemic.
The company believes the return of all of its theatres makes it the first of the world’s major film exhibitors to reopen its entire network of locations.
“We achieved record financial results in the first half of 2020 and raised our full-year outlook as customers rely on Intel technology for delivering critical services and enabling people to work, learn and stay connected. As the ongoing growth of data fuels demand for Intel products to process, move and store, we are confident in our multiyear plan to deliver leadership products,” said CEO Bob Swan. “While the macro-economic environment remains uncertain, Intel shares are currently trading well below our intrinsic valuation, and we believe these repurchases are prudent at this time.”
L Brands Inc. (LB-N) jumped 3.8 per cent after it reported a surprise quarterly profit boosted by strong demand for Bath & Body Works’ sanitizers and soaps, as well as higher online sales of Victoria’s Secret lingerie during coronavirus-led lockdowns.
The pandemic-fuelled temporary store closures, which have pushed many retailers into bankruptcy, led to 850 jobs cuts at L Brand’s home office and permanent closing of some Victoria’s Secret stores, after a stake sale in the unit fell apart.
The company’s direct channel, which includes its online store that remained open throughout the quarter, proved to be a bright spot as customers flocked to shop virtually.
That helped comparable sales for Bath & Body Works surge 123 per cent, while that for Victoria’s Secret rise 28 per cent.
Overall comparable sales rose 63 per cent for L Brands, crushing the average analyst estimate of an 18-per-cent fall, according to IBES data from Refinitiv.
“Q2 2020 was much stronger than expected... The key question for management will be whether the company will be able to maintain this strength through holiday,” Bernstein analyst Jamie Merriman said.
Excluding one-time items, the company earned 25 US cents per share in the quarter ended Aug. 1, compared with the expectation of a 42 US cents loss.
Nvidia Corp. (NVDA-Q) was up 0.1 per cent after it forecast third-quarter sales above expectations on Wednesday, but results from the data center business of the rising semiconductor industry star disappointed some investors, pressuring shares.
The company, with a market cap that has eclipsed Intel Corp. (INTC-Q), also beat Wall Street expectations for the second quarter.
Before the market close on Wednesday, Nvidia’s shares had gained more than 185 per cent over the past year and with a valuation of about 53 times expected earnings over the next 12 months.
Nvidia said it expects third-quarter revenue of US$4.40-billion, plus or minus 2 per cent, compared with analysts’ estimates of US$3.97-billion, according to IBES data from Refinitiv.
The company’s data center segment reported second-quarter revenue of US$1.75-billion beating estimates of US$1.71-billion, according to FactSet data.
Stacy Rasgon, an analyst with Bernstein, said the figure implied that Nvidia’s core data center chips grew only about 6 per cent on a quarterly basis, which may have been lower than some investors with sky-high expectations had hoped.
In an interview with Reuters, Chief Executive and co-founder Jensen Huang said the company is shipping its newest data centre products as fast as possible after both introducing them and starting shipments in the second quarter, a process that in the past would play out over several quarters.
On the decline
Chemtrade Logistics Income Fund (CHE.UN-T) was lower by 3.3 per cent as it announced a $65-million convertible debentures bought deal offering. The offering is at a price of $1,000 per debenture, with an interest rate of 8.50 per cent per year, payable semi-annually. The debentures will mature on September 30, 2025.
Chemtrade also announced that it intends to establish an “at-the-market” equity program.
China’s Alibaba Group Holding Ltd. (BABA-N) beat quarterly revenue and profit estimates on Thursday, as its core commerce and cloud computing businesses benefited from the coronavirus-led shift to online shopping and working from home.
The company’s U.S.-listed shares inched lower by 1.1 per cent in the wake of a 23-per-cent gain this year.
The results come as U.S.-listed Chinese companies face renewed heat and President Donald Trump has said he could exert pressure on more Chinese companies after he moved to ban TikTok, owned by China’s ByteDance.
The White House has been piling pressure ahead of the presidential election in November and financial markets are watching for signs of whether it will lead to further tit-for-tat moves that could hit a global recovery.
Sales from Alibaba’s core commerce business jumped 34 per cent to 133.32 billion yuan (US$19.27-billion) in the first quarter ended June.
“Our domestic core commerce business has fully recovered to pre-COVID-19 levels across the board, while cloud computing revenue grew 59 per cent year-over-year,” Chief Financial Officer Maggie Wu said in a statement.
American Airlines Group Inc. (AAL-Q) slipped 1.6 per cent after it said Thursday it plans to suspend flights to 15 U.S. airports in October as travel demand remains low as a result of the coronavirus pandemic.
Congress has been weighing for weeks whether to grant U.S. airlines another $25 billion in payroll assistance that would keep tens of thousands of airline workers on the job for another six months and extend minimum service requirements.
American said it will cancel just over 700 flights in October to and from those 15 airports but warned it could make additional cuts or could reconsider if Congress provides additional assistance.
“This is the first step as American continues to evaluate its network and plans for additional schedule changes in the coming weeks,” the airline said.
Estee Lauder Cos Inc. (EL-N) fell 6.6 per cent as it forecast first-quarter profit below Wall Street estimates on Thursday after posting a bigger-than-expected quarterly loss as travel restrictions and store closures put in place to contain the spread of coronavirus dampened demand for its premium make-up brands.
The M.A.C. brand owner also said it would cut about 1,500 to 2,000 jobs globally, including point of sale employees. It also estimated closure of 10-15 per cent of its freestanding stores.
Cosmetics makers, including Estee Lauder, that rake in millions from sales at duty-free stores at airports, cruises and downtown locations have seen sales plummeting in its travel retail channel, as tourist spending has dried up due to restrictions on overseas travel and COVID-19 flare-ups in some tourist attractions.
Estee Lauder projected first-quarter adjusted profit per share to be between 80 and 85 US cents. Analysts on average were expecting a profit of US$1.22 per share, according to IBES data from Refinitiv.
Net sales fell to US$2.43-billion in the fourth quarter from US$3.59-billion a year ago. Analysts on average had expected revenue of US$2.45-billion.
Estee Lauder posted a loss attributable to the company of US$462-million, or US$1.28 per share, in the quarter ended June 30, compared with a profit of US$157-million, or 43 US cents per share, a year earlier.
Excluding items, the company reported a loss of 53 US cents per share. Analysts had expected a loss of 19 US cents per share.
With files from Brenda Bouw, staff and wires