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A roundup of some of the North American equities making moves in both directions today

On the rise

Vancouver-based fashion retailer Aritzia Inc. (ATZ-T) jumped higher after releasing better-than-anticipated quarterly results after the bell on Wednesday.

The company said it has reopened all the stores it closed due to COVID-19 pandemic lockdowns in March, but ongoing related issues are blamed for lower revenue and a net loss in its most recent fiscal quarter.

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Aritzia, which is behind the TNA, Babaton and Wilfred brands, reported a net loss of $900,000 on revenue of $200 million in the 13-week period ended Aug. 30, beating analyst expectations for a net loss of $5.3-million on revenue of $191-million, according to financial markets data firm Refinitiv.

It reported net income of $17.9-million on revenue of $241-million in the comparable period last year.

“Despite shuttering our retail operations in March, we were thrilled by the response of our people and our clients. As we reopened and began the recovery of our retail operations in early May, this enthusiasm continued into Q2,” said CEO Brian Hill on a conference call on Wednesday.

“As a result of keeping all of our people employed during the shutdown, and starting to plan our reopening as soon as we closed our doors, we were able to reopen our boutiques quickly and efficiently,” he said.

Aritzia’s optimism about the upcoming holiday season is tempered by recent increases in COVID-19 positive case rates and new government restrictions in some of its key markets, Mr. Hill cautioned.

Magna International Inc. (MG-T) rose after Fisker Inc., which is going public through a merger with a so-called blank check company, said on Thursday the Aurora, Ont.-based company will supply the vehicle platform and build the electric carmaker’s Ocean SUV.

As part of the deal, Magna will receive warrants to purchase a stake of up to 6 per cent in Fisker, worth about US$3-billion, Fisker Chief Executive Henrik Fisker told Reuters.

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“We’re full speed ahead,” Mr. Fisker said in a telephone interview. “This is a huge turning point. We realized Magna would be an amazing partner because having skin in the game obviously means we both have the same goal of getting this car to market.”

Fisker, which is merging with Spartan Energy Acquisition Corp, said it had finalized a deal with Canada’s Magna to build the Ocean in Europe, marking the Canadian supplier’s first entry into contract manufacturing for an EV startup.

Magna also has a tentative deal to build vehicles for EV startup Canoo Holdings Ltd, which is also going public later this year through a reverse merger with a special-purpose acquisition company, or SPAC.

Morgan Stanley (MS-N) rose after it posting a much better-than-expected 26-per-cent jump in third-quarter profit on Thursday, powered by another bumper quarter at its trading business as the COVID-19 pandemic drove up volatility in financial markets.

Net income applicable to common shareholders rose to US$2.60-billion in the quarter ended Sept. 30, from US$2.06-billion a year ago. Earnings per share rose to US$1.66 from US$1.27 a year ago.

Analysts were looking for a profit of US$1.28 per share, according to IBES data from Refinitiv. It was not immediately clear if the numbers were comparable.

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Morgan Stanley’s performance largely mirrored that of chief rival Goldman Sachs, which posted its best quarterly performance in a decade by some measures as trading moved back into the limelight.

Revenue from Morgan Stanley’s institutional securities division, which is the bank’s largest breadwinner and houses its investment banking and trading businesses, rose 21 per cent to US$6.06-billion as equity underwriting revenues more than doubled due to handsome fees from a number of high-profile initial public offerings.

But revenue from underwriting bonds declined from last year due to declines in loan issuances and muted dealmaking activity.

While Morgan Stanley’s trading unit turned in a strong quarter, it did not hit the record highs of the previous quarter.

The bank had already warned that the division would not perform as well in the third quarter as it had in the second, when it had benefited from huge swings in financial markets due to the coronavirus outbreak.

TMAC Resources Inc. (TMR-T) closed higher amid news Ottawa is ordering a national security review of state-owned Chinese miner Shandong Gold Mining Co. Ltd’s planned acquisition of the junior Canadian miner.

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The $207-million acquisition of Toronto-based TMAC, which operates in the Canadian Arctic, was announced in May.

The security review raises more doubts about whether the transaction will close, and at the very least pushes out the timeline if it is ultimately approved.

In a release, TMAC said that if it gets approval from the government the deal would close in the first quarter of next year.

- Niall McGee

See also: With deep pockets and long time horizons, China targets struggling Canadian gold companies

Walgreens Boots Alliance Inc. (WBA-Q), the largest U.S. drugstore chain, gained ground as it forecast a return to growth in profit next year, banking on a recovery in the second half of fiscal 2021 after improvement in U.S. and UK markets helped it beat estimates for the most recent quarter.

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Walgreens, whose 2020 adjusted profit fell 21 per cent, has cut jobs, suspended share repurchases and closed some of its UK-based Boots stores to save costs and revive profit growth, as shoppers stayed indoors due to the COVID-19 pandemic.

Thursday’s full-year results showed sales at Boots were down by a third in the final quarter of financial 2020, although that was improved from a 48-per-cent slump a quarter earlier.

“We are seeing gradual improvement in key U.S. and UK markets and continued strong performance in our wholesale business,” Walgreens CEO Stefano Pessina said in a statement.

The company said it expects adjusted profit for fiscal 2021 to grow in single-digit at constant currency rates. Analysts expected growth of about 1 per cent, according to Refinitiv data.

It forecast strong adjusted profit growth in the second half of 2021, as the impact of the COVID-19 pandemic subsides, and supported by its cost-cutting plans, and investments in 2021.

Excluding items, Walgreens earned US$1.02 per share, beating analysts' expectations of 96 US cents per share

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Walgreens shares remain down nearly 40 per cent in the year. The stock is one of the worst performers on the bluechip Dow Jones index .

Tiffany & Co. (TIF-N) was higher after it said on Thursday sales have been rising through October as its business rebounds from pandemic lows, firing back at French luxury giant LVMH , which is looking to scrap its US$16-billion deal for the U.S. jeweler.

The companies have been locked in a legal battle since LVMH last month cited worsening business conditions at Tiffany as one of the reasons to walk away from the deal.

Tiffany, which has alleged in a lawsuit that LVMH improperly tried to renegotiate the deal, said on Thursday sales in Mainland China were “extremely strong” and its business was recovering in the United States after being hit earlier in the year.

LVMH has said Tiffany’s prospects were “dismal” and it was a different company from the one it had agreed to buy in November before the health crisis hammered demand for luxury goods.

Tiffany said on Thursday fourth-quarter earnings are expected to increase by mid-to-high single digit percentage from a year earlier, with online sales nearly doubling in August and September.

On the decline

Brookfield Asset Management (BAM.A-T) was lower after Reuters reported it plans to launch an initial public offering (IPO) for its US$1.4-billion Australian coal export terminal next wee.

The IPO will compete for the title of Australia’s biggest float in 2020 with Macquarie Group’s potential listing of Nuix in a deal that would value the software provider at close to US$1.5-billion.

Brookfield had put its plans for a sale or listing of the Dalrymple Bay Coal Terminal (DBCT) on hold in March amid coronavirus travel restrictions, but talks resumed with investors in July, two of the sources said.

Recent positive equity market conditions swayed the decision in favor of an IPO, one source said. Investment banks managing the deal are scheduled to publish pre-IPO research on Oct. 19, with a plan to list before year-end, the source added.

Ontario-based marijuana producer Aphria Inc. (APHA-T) plummeted in the wake of missing estimates for quarterly revenue as reduced in-person visits to physicians and pharmacies due to COVID-19 curbs in Germany hit its distribution business, which accounts for half of total sales.

Aphria’s first-quarter distribution revenue fell to $82.2-million from $99.1-million in the previous quarter and $95.3-million from a year earlier.

The company posted net revenue of $145.7-million in the quarter, missing Street estimates of $159.7-million, according to IBES data from Refinitiv.

The spread of the COVID-19 pandemic led to countries and states closing borders, disrupting supply chains with companies holding off new product launches and some even shutting stores. Ontario-based Aphria also posted a net loss of $5.1-million, or 2 cents per share, in the three months ended Aug. 31, compared with a net income of $16.4-million or 7 cents per share, a year earlier.

The loss, however, was smaller than analysts' average estimate of a loss of 4 cents.

The release prompted a decline in its competitors, including Canopy Growth Corp. (WEED-T), Aurora Cannabis Inc. (ACB-T) and Tilray Inc. (TLRY-Q).

Barrick Gold Corp. (ABX-T) was down after estimating a 10.8-per-cent drop in third-quarter gold production as the miner’s Porgera project in Papua New Guinea remained shut during the period.

The Toronto-based miner stopped production at Porgera after Papua New Guinea’s government refused to extend the mine’s lease in April because of community unrest and pollution concerns. The production halt also forced it to cut its full-year attributable gold production forecast in May.

Earlier in the day, Papua New Guinea and Barrick agreed in principle over Porgera, with Barrick Niugini Ltd set to remain operator of the project.

Barrick Niugini Ltd is a joint venture between Barrick and China’s Zijin Mining Group.

Barrick Gold estimated production of 1.16 million ounces of gold for the quarter ended Sept. 30, compared to 1.3 million ounces a year earlier.

Gold prices have surged around 25 per cent this year on strong demand for the safe-haven asset due to the uncertainty caused by the COVID-19 pandemic.

Still, cost-conscious executives are prioritizing investor returns over production growth and hesitant to spend on pricey projects.

Barrick, which is scheduled to report third-quarter results on Nov. 5, on Thursday also estimated third-quarter copper production to be about 103 million pounds, an 8-per-cent drop from a year earlier.

See also: Can Barrick’s Mark Bristow break down barriers to mining takeovers?

Ballard Power Systems Inc. (BLDP-T) slid with the announcement that it has sold its Unmanned Aerial Vehicle (UAV) business assets of its subsidiary located in Massachusetts to Honeywell International.

Financial terms were not disclosed.

“The companies are also committed to a long-term strategic collaboration to combine Ballard’s expertise in fuel cell technology with Honeywell’s leadership in aerospace and are working on agreements in respect of this collaboration,” they said.

Fastly Inc. (FSLY-N), a San Francisco-based cloud computing services provider, dropped with the release of weaker-than-anticipated quarterly results and the withdrawal of its guidance after Bytedance Inc., its largest customer and TikTok’s parent customer, did not use its product as much as expected given the potential for a U.S. ban.

Credit Suisse analyst Brad Zelnick said: “We maintain our Outperform rating despite Fastly negatively preannouncing preliminary 3Q20 revenue, which came in 5.4 per cent below its previous guidance range at the midpoints due to a) TikTok traffic not meeting expectations with a corresponding ‘significant reduction’ in revenue and b) a ‘few’ customers having lower usage than expected in the latter part of 3Q. While the preannouncement brings more questions than answers and highlights the inherent risks in customer concentration, we continue to view Fastly as well positioned to not only continue taking share of the traditional CDN market, but the more nascent edge computing market as well. We also see the acquisition of Signal Sciences helping to diversify Fastly’s revenue base and accelerate share gains.”

**

United Airlines (UAL-Q) slipped after it said on Wednesday it cut operating costs by 59 per cent in the third quarter and had nearly US$20-billion of liquidity to position it for an eventual recovery from the COVID-19 crisis that has hammered the travel industry.

Airline executives have signaled a slow but steady improvement in leisure demand but do not foresee a recovery to 2019 levels for at least two years, with business and international travel particularly slow to bounce back amid ongoing travel restrictions.

When the rebound finally arrives, airlines want to have a cost structure and network in place.

“We’re ready to turn the page on seven months that have been dedicated to developing and implementing extraordinary and often painful measures, like furloughing 13,000 team members, to survive the worst financial crisis in aviation history,” said United CEO Scott Kirby.

He acknowledged, however, that the “negative impact of COVID-19 will persist in the near term.”

United said its quarterly adjusted loss was US$2.37-billion, or US$8.16 per share, compared with adjusted net income of US$1-billion, or US$4.07 per share, a year earlier.

**

With files from staff and wires

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