A roundup of some of the North American equities making moves in both directions today
On the rise
Agnico Eagle Mines Ltd. (AEM-T) increased after it reported a better-than-expected quarterly profit on Wednesday, benefiting from a surge in gold prices and sales volume, and raised its capex forecast for the year as it spends on several sites to boost production.
Agnico now expects total capital expenditure for the year to range between $720-million and $740-million, higher than earlier forecast of $690-million, as it develops its Kittila mine in northern Finland, its first to open outside of Canada.
The increased capital spending also includes development cost for its Amaruq underground project and Meliadine mine in Canada.
Massive stimulus packages to aid economies reeling from coronavirus-driven woes and a low interest rate environment have helped drive about 25-per-cent increase in prices of gold this year as the metal is seen as an inflation hedge.
Agnico said average realized price for gold jumped about 29 per cent to $1,911 per ounce in the reported quarter, while gold production rose over 3 per cent to 492,693 ounces.
The company, with operating mines in Canada, Finland and Mexico, said it expects similar production levels in the current quarter and raised its quarterly dividend by 75 per cent.
Agnico, which earlier in the year experienced temporary shutdowns or reduced activity at certain mines due to COVID-19 restrictions, said it has seen limited impact on operational productivity.
However, the company added that its Nunavut-based workers remained at home in the third quarter and there is no set date for their return to work.
Net income rose to $222.6-million, or 91 cents per share, in the quarter ended Sept. 30 from $76.6-million, or 32 cents per share, a year earlier.
Revenue rose to $980.6-million from $683-million.
Excluding items, the company earned 78 cents per share. Analysts had expected a profit of 66 cents per share, according to Refinitiv IBES.
The Toronto-based company reported revenue and earnings per share of $218.4-million and 15 cents, respectively, exceeding the Street’s projections of $214.2-million and 12 cents.
Scotia Capital analyst Trevor Turnbull said: “We feel Alamos shares should respond positively to the first significant free cash flow and the solid beat on production and costs across all three operations. Our read-through to Q4 is for further production and free cash flow gains. The company also increased its dividend to $0.08/sh annually from $0.06/sh.”
First Quantum Minerals Ltd. (FM-T) increased in the wake of the release of better-than-expected third-quarter financial and production results on Wednesday evening.
The miner reported adjusted earnings per share of 9 cents, easily topping the Street’s expectation of an 11-cent loss.
Scotia Capital analyst Orest Wowkodaw said: “FM reported markedly better than anticipated Q3/20 results driven by a strong operational performance, particularly at Cobre Panama (CP) and Sentinel. 2020 production and cost guidance was modestly improved. Overall, we view the update as positive for the shares on a first look basis.”
The Calgary-based company reported funds from operations of 76 cents per share, exceeding the consensus expectation on the Street of 71 cents. Productions of 616,000 barrels of oil equivalent per day also met estimates.
In a research note, Raymond James analyst Chris Cox said: “The last few months have been a rough ride for SU shareholders. The stock has been the worst-performing large cap producer since the company reported 2Q20 results, underperforming the TSX Energy Index by 16 per cent over that time span, with the shares now trading below the March-lows. While operational struggles during the quarter certainly contributed to the underperformance -and will undoubtedly be an increased focus of Management’s attention going forward - we think the deterioration in the forward outlook for downstream margins has played an even greater role. This puts an even greater urgency on the need to achieve the company’s $2-billion of incremental free cash flow target as early as possible; in this respect, we believe investors will be encouraged by the acceleration of structural workforce reductions of 10-15 per cent. Exact figures were not provided, but we think this could contribute somewhere in the range of $400-million of savings - needle-moving in the context of ’21/22 FCF expectations.”
Ford Motor Co. (F-N) saw gains in the wake of posting a better-than-expected quarterly profit on strong U.S. demand for pickups and SUVs, and forecast a full-year pretax profit instead of a loss, boosting shares in after-hours trading.
Ford CEO Jim Farley, who took over on Oct. 1, is tasked with completing the No. 2 U.S. automaker’s US$11-billion restructuring begun under his predecessor, Jim Hackett, and has promised greater urgency.
He has also said he is keen to expand Ford’s operations into related technology fields, including software, data, fleet management and electric vehicle charging.
Ford reported net income in the third quarter of US$2.4-billion, or 60 US cents a share, compared with US$400-million, or 11 US cents a share, a year earlier.
Excluding items, Ford’s profit was US$3.6-billion, or 65 US cents a share, topping the 19 US cents analysts polled by Refinitiv had expected.
The company said it now anticipates better-than-expected fourth-quarter results, as well as a full-year pretax profit of between US$600-million and US$1.1-billion.
Credit Suisse analyst Dan Levy in an earnings note said, “We expect the stock to outperform near-term; indeed, we believe Jim Farley will drive incremental urgency and accountability at Ford.”
Kraft Heinz Co. (KHC-Q) beat third-quarter revenue expectations on Thursday, as consumers bought more of its packaged foods and condiments for at-home cooking, sending its shares up.
The pandemic-led spurt in demand has been a boon for Kraft, which has been struggling with weak sales and was forced to write down the value of several brands by billions of dollars over the past two years.
The company, known for brands from Philadelphia cream cheese to Heinz ketchup, said quarterly sales grew 6 per cent to US$6.44-billion, beating analysts' average estimate of US$6.32-billion, according to Refinitiv data.
Sales in the United States, its biggest market, rose 7.4 per cent, helped by a 4 percentage point hike in prices due to reduced promotional activity compared to a year earlier and as a step to offset higher dairy prices.
Compared to its peers, Kraft generated the highest increase in sales over the past 12 weeks at U.S. retail stores. It rose 9.8 per cent for Kraft, 5 per cent for Kellogg and 8.7 per cent for General Mills , according to data provided to Guggenheim by Nielsen.
For the full year, Kraft raised its forecast for adjusted core earnings to high single digits from mid single digits.
Excluding items, the Chicago-based company earned 70 US cents per share in the reported quarter.
Newmont Corp. (NGT-T) was up after it said on Thursday its quarterly adjusted profit more than doubled, as the world’s largest gold miner benefited from a rise in bullion prices after investors sought refuge in safe-haven assets due to the COVID-19 pandemic.
Gold prices touched record highs during the quarter as a slowdown in economic activities and surging coronavirus cases sent investors to the precious metal, long seen as a hedging instrument against inflation and currency debasement.
The miner said its averaged realized gold price jumped 30 per cent to US$1,913 per ounce in the third quarter, while attributable gold production fell 6 per cent to 1.54 million ounces.
Excluding items, the Colorado-based company earned 86 US cents per share in the quarter, up from 36 US cents per share a year ago.
Net income from continuing operations fell to US$611-million, or 76 US cents per share, from US$2.3-billion, or US$2.71 per share, in the year-ago quarter that included a US$2.4-billion gain on the formation of Nevada Gold Mines.
Third quarter revenue of US$3.17-billion missed an estimate of US$3.29-billion, according to Refinitiv IBES data, while non-GAAP earnings per share of 87 US cents beat an average of 85 US cents.
Newmont on Wednesday increased its quarterly dividend 60 per cent to 40 US cents per share.
Crescent Point Energy Corp. (CPG-T) was up with its third-quarter results before the bell.
ATB Capital Markets analyst Patrick O’Rourke said: “The company released a modest operational and financial beat, in a difficult operating climate. 2020 production guidance is very modestly increased to the upper end of the prior guidance range, while there is no change to the preliminary 2021 guidance, with the focus continuing to be debt repayment. The broader macro environment, with COVID concerns driving oil prices sharply lower, likely outweighs any of the positive operational performance at the margin in the near-term, but a lower decline profile as we head into 2021 (noted base decline down to 25 per cent from 30 per cent) continues to improve the sustainability of the business model, with 2021 break-evens now noted at US$40/bbl WTI.”
Shares of Netflix Inc. (NFLX-Q) soared in late trading after the streaming giant said it’s hiking monthly charges for its most popular standard plan to US$14 and its premium tier to US$18 in the United States.
The new standard plan will cost users US$1 extra while it will be US$2 for the premium plan.
“We’re updating our prices so that we can continue to offer more variety of TV shows and films - in addition to our great fall line up,” a company spokesperson said
RioCan Real Estate Investment Trust (REI.UN-T) was up after saying its third-quarter profit was down $60 million from the same time last year as it felt the impact of the COVID-19 pandemic on its tenants.
The real estate trust announced $117.6-million of net income or 37 cents per unit for the three months ended Sept. 30, down from $177.6-million or 58 cents in the 2019 third quarter.
It says $14.4-million of the year-over-year decline was due to pandemic-related provisions related to rent abatement and bad debts, while $48-million was due to higher net fair value losses.
Funds from operations, a key metric in real estate, declined to $128.8-million or 41 cents per unit from $142.8-million or 47 cents per unit.
Revenue fell to $302.3-million from $353.9-million a year earlier.
RioCan says that as of the end of the quarter on Sept. 30, essentially all of its tenants were open and operating — compared with only 85 per cent as of July 28 earlier in the quarter.
Brazilian miner Vale SA (VALE-N) was higher in the wake of reporting its third-quarter net profit nearly doubled from the same period a year ago, as the company boosted iron ore production and inventories following a deadly dam disaster in January 2019.
Net profit for the three months through September climbed to US$2.9-billion from US$1.6-billion a year earlier, though it still fell well short of a Refinitiv estimate of US$3.6-billion.
Results were driven by a 26-per-cent increase in prices for iron ore and a 20-per-cent increase on ore sales volumes, Vale said.
The world’s second-largest producer of the key steelmaking ingredient earlier this month reported a 31-per-cent recovery in iron ore output compared to the second quarter. Its best result in two years - 88.7 million metric tons - came as a number of mines that were halted after the Brumadinho dam collapse ramped up production or came on line.
Vale posted adjusted earnings before interest, taxes, depreciation and amortization of US$6.1-billion for the third quarter, up from US$4.6-billion in the year-ago period, in line with estimates.
Exxon Mobil Corp. (XOM-N) rose after it said on Thursday it could cut its global workforce by about 15 per cent, including deep white-collar staff reductions in the United States, as the COVID-19 pandemic batters energy demand and prices.
Exxon and other oil producers have been slashing costs due to a collapse in oil demand and ill-timed bets on new projects. The top U.S. oil company earlier outlined more than US$10-billion in budget cuts this year.
“The impact of COVID-19 on the demand for Exxon Mobil’s products has increased the urgency of the ongoing efficiency work,” the company said in a statement.
An estimated 14,000 employees globally, or 15 per cent, could lose jobs, including contractors, spokesman Casey Norton said. The figure will include loses from restructurings, retirements and performance-based exits. Exxon had about 88,300 workers, including 13,300 contractors, at the end of last year.
The company is not targeting a fixed number of jobs but does expect the result of its ongoing business review to eliminate about 15 per cent of its current staffing.
Exxon, which has struggled in recent years to regain footing after misplaced bets on shale gas and Russia exploration, lost nearly US$1.7-billion in the first six months of the year. It is expected to report a record-setting third straight quarterly loss on Friday, and its third-quarter loss could reach US$1.19-billion, according to Refinitiv IBES.
U.S. oil producer ConocoPhillips (COP-N) was up after it posted a smaller quarterly loss than the prior quarter close on the heels of a blockbuster shale deal, as crude oil prices recovered from the pandemic-driven historic lows.
Its all-stock deal for Concho Resources Inc, valued at US$8.3-billion as of Wednesday’s close, started a wave of consolidation in the shale industry earlier this month as producers look to buy rivals hit hard by weak oil prices.
Crude prices hit a rock bottom in March and April as global travel came to a standstill due to the coronavirus crisis, forcing oil producers to cut output and save cash, while many were forced to merge with big players to survive.
Houston-based Conocophillips said on Thursday its quarterly production, excluding Libya, fell 19.4 per cent to 1.01 million barrels of oil equivalent per day (boepd), while it earned US$30.94 for each barrel of oil equivalent (boe) sold.
The company’s adjusted net loss shrank to US$331-million, or 31 US cents per share, in the third quarter ended Sept. 30, from US$994-million, or 92 US cents per share, in the second quarter.
On the decline
Shopify Inc. (SHOP-T) dipped after it beat investor expectations Thursday with third-quarter results that beat the financial forecasts of analysts by a wide margin and included its largest quarterly profit to date.
The Ottawa-based commerce software provider, which has beaten analyst estimates consistently since going public in May 2015, said it generated US$767.4-million in revenue in the quarter ended Sept 30, more than US$110-million above consensus analyst expectations. The company, which rarely earns a bottom line profit, posted net income of US$191-million, up from a loss of US$72.8-million in the same period a year earlier.
Financial analysts pay closer attention to Shopify’s adjusted net income. That too far exceeded their average estimates in the 49 cent-per-share range, as Shopify earned UUS$140.8 million, or US$1.13 per share.
- Sean Silcoff
The Calgary-based pipeline company says its profit attributable to common shares amounted to $904-million or 96 cents per share for the quarter ended Sept. 30, up from $739-million or 79 cents per share a year ago.
Revenue totalled nearly $3.2-billion, up from $3.13-billion in the same quarter last year.
TC Energy says its comparable earnings for the quarter were $893-million or 95 cents per share compared, down from $970-million or $1.04 per share in the same quarter in 2019.
Analysts on average had expected a profit of 94 cents per share and $3.22 billion in revenue, according to financial data firm Refinitiv.
TC Energy also says it is going ahead with its US$200-million Wisconsin Access Project to increase natural gas capacity and improve reliability on a segment of its ANR Pipeline system.
The company say the project will provide about 72 million cubic feet per day of firm transportation service under long-term contracts to utilities serving the Midwestern United States.
Oil and gas producer Cenovus Energy Inc. (CVE-T) was down after it reported its third straight quarterly loss on Thursday, hurt by a slump in crude prices and crash in fuel demand caused by the COVID-19 pandemic.
Cenovus' results come just days after it said it would buy rival Husky Energy Inc in one of Canada’s biggest oil-and-gas deals in nearly four years, as the industry looks to consolidate and preserve cash to survive the oil rout.
Cenovus said total quarterly production rose 5.2 per cent to 471,799 barrels of oil equivalent per day (boepd).
The Calgary-based company recorded a net loss of $194-million or 16 cents per share, for the third quarter ended Sept. 30, compared with a year-ago profit of $187-million, or 15 cents per share.
Husky Energy Inc. (HSE-T) dipped after it reported a nearly $7.1-billion loss in its latest quarter as it was hit by $6.7 billion in non-cash impairment charges after taxes related to lower long-term commodity price assumptions and reduced capital investment.
The company says the loss amounted to $7.05 per share for the quarter ended Sept. 30 compared with a profit of $273-million or 26 cents per share in the same quarter last year.
Revenue totalled $3.33-billion, down from $5.29-billion a year ago.
Husky says funds from operations for the quarter amounted to $148-million or 15 cents per share, down from $1.02-billion or $1.02 per share in the same quarter last year.
Total upstream production averaged 258,400 barrels of oil equivalent per day for the quarter with 294,800 in the third quarter of 2019 and 246,500 in the second quarter of 2020.
Gildan Activewear Inc. (GIL-T) reversed gains late and fell after it topped expectations as it reported a third-quarter profit of US$56.4-million and its sales recovered after plunging earlier this year due to the pandemic.
The Montreal-based clothing manufacturer says the profit amounted to 28 US cents per diluted share for the quarter ended Sept. 27 compared with a profit of US$104.9-million or 51 US cents per share a year earlier.
Sales totalled US$602.3-million for the quarter, down from US$739.7-million in the same quarter last year, but up from US$230-million in the second quarter of this year.
On an adjusted basis, Gildan says it earned US$59.2 million or 30 US cents per share for the quarter compared with an adjusted profit of US$108.4-million or 53 US cents per share a year earlier.
Analysts on average had expected a profit of 10 US cents per share for the quarter and US$543.1-million in revenue, according to financial data firm Refinitiv.
Gilead Sciences Inc. (GILD-Q) slid in the wake of cutting its 2020 revenue forecast, citing lower-than-expected demand and difficulty in predicting sales of remdesivir, the only treatment approved in the United States for patients hospitalized with COVID-19.
Remdesivir brought in US$873-million in the quarter, below analysts' estimates of US$960-million, according to Refinitiv IBES data.
Gilead Chief Commercial Officer Johanna Mercier said that although the United States saw a surge in COVID-19 cases over the summer, many were younger people and hospitalization rates actually dropped. “Our assumption is in light of the surge this fall both in Europe and the U.S., those numbers will pop back up,” she said.
Gilead lowered the top end of its full-year sales outlook to US$23.5-billion, which is below Wall Street estimates of US$24.1-billion. The company had previously forecast 2020 sales as high as US$25-billion.
“The revision in guidance is tied, not entirely, but almost entirely to expectations around Veklury,” Gilead Chief Financial Officer Andrew Dickinson said, using the brand name for remdesivir. “There was less demand in the third quarter than expected.”
Remdesivir is authorized or approved for use in more than 50 other countries around the world. It was one of the treatments given to U.S. President Donald Trump during his recent bout with COVID-19.
Gilead said some sales recorded in the third quarter are being held in inventory for use in the fourth quarter, and the volume of remdesivir purchased for government stockpiling purposes fell short of what the company had projected.
With files from staff and wires