A roundup of some of the North American equities making moves in both directions today
On the rise
Canadian Imperial Bank of Commerce (CM-T) was up modestly after it reported lower fiscal fourth-quarter profit but still earned more than analysts had expected, as the bank named its next board chair.
In keeping with a consistent trend among rival banks that reported quarterly results earlier this week, Canada’s fifth-largest bank by assets earmarked far less money than expected to cover potential losses from lending, which helped shore up earnings.
Provisions for credit losses amounted to $291-million, down 28 per cent year over year and 45 per cent from last quarter.
CIBC posted higher profits from its core Canadian business lines, which include personal and business banking as well as wealth management, but earnings from its U.S. banking arm fell 27 per cent from a year ago.
The bank also announced that Katharine B. Stevenson will succeed John Manley as chair of its board of directors at the bank’s annual meeting in April. Ms. Stevenson has been a director since 2011, and was previously a financial executive at Nortel Networks Corp., after working in investment banking at JPMorgan & Co.
- James Bradshaw
See also: Bank CEOs warn of slower growth ahead
Descartes Systems Group Inc. (DSG-T) rose with the release of better-than-expected quarterly results after the bell on Wednesday.
The Waterloo, Ont.-based tech firm reported adjusted EBITDA of US$36.4-million, up 16 per cent year-over-year and ahead of the Street’s US$34.67-million expectation. Revenue rose 5 per cent to US$87.5-million and also exceeded the consensus estimate ($86-million).
That led several equity analysts to raise their target prices for Descartes shares.
WSP Global Inc. (WSP-T) shares shot up higher after announcing this morning it has agreed to acquire Golder, an employee-owned engineering and consulting firm with 60 years of experience in the geo-sciences sector.
The transaction is expected to be immediately accretive to WSP’s adjusted EPS, with accretion increasing to the mid-teens once cost synergies of approximately $35-million are realized over a two-year period.
The company is funding the bulk of this acquisition with debt, but it is also planning to place $310-million of stock privately.
Tesla Inc. (TSLA-Q) rose further after an equity analyst at Goldman Sachs upgraded its stock.
See also: Tesla to join S&P 500 in single tranche
Boeing Co. (BA-N) was flying higher a day after its 737 MAX staged its first post-grounding flight with media on board.
In another display of confidence, European budget airline Ryanair was set to place a hefty order for up to 75 additional 737 MAX jets, industry sources said.
Wednesday’s American Airlines 737 MAX flight was a 45-minute hop from Dallas, Texas, to Tulsa, Oklahoma. It comes weeks before the first commercial passenger flight on Dec. 29, and is part of a public relations effort to allay any concerns about the aircraft.
Boeing’s best-selling jet was grounded in March 2019 after two crashes in five months killed a combined 346 people, marking the industry’s worst safety crisis in decades and undermining U.S. aviation regulatory leadership.
Wednesday’s flight marked the first time anyone besides regulators and industry personnel flew on the MAX since the grounding, which ignited investigations focusing on software that overwhelmed pilots.
On the decline
Toronto-Dominion Bank (TD-T) finished lower in the wake of reporting fourth-quarter profit that beat analysts’ estimates on Thursday, on lower-than-expected provisions for credit losses and as its Canadian retail business and wholesale banking income grew from a year earlier.
Canada’s second-biggest lender said adjusted net income marginally rose to $2.97-billion, or $1.60 a share, from $2.95-billion, or $1.59 a share, a year ago. Analysts had expected $1.28.
TD set aside $917-million to cover bad loans, lower than the estimated $1.58-billion and less than half the amount taken in the second quarter.
U.S. oil major Chevron Corp. (CVX-N) was down after it cut billions more off its long-term capital and exploratory budget after completing a major restructuring of its operations as it seeks to preserve its dividend.
The company said it now expects its total capital and exploratory budget through 2025 to be between US$14-billion and US$16-billion, down from an earlier forecast of between US$19-billion and US$22-billion.
It also said that despite the reduction to the overall budget, it expects to be able to raise investment in the Permian and other shale basins, helped by an anticipated drop in capital needed for a major expansion in Kazakhstan.
The company set its 2021 budget at US$14-billion, with US$11.5-billion earmarked for oil exploration and production.
Chevron was among the first U.S. oil and gas majors to slash spending plans this year after the coronavirus pandemic’s impact on demand helped spark a collapse in oil prices, making companies focus on preserving cash instead of drilling more.
Dollar General Corp. (DG-N) lost ground despite reporting better-than-expected quarterly results on Thursday, as the discount retailer benefited from higher demand for cheaper groceries and household items during the coronavirus-induced economic downturn.
High unemployment and falling household income this year due to the COVID-19 crisis have boosted demand for lower-priced cereals, vegetables and other essentials, lifting sales at dollar stores.
The strong demand also carried through to the current quarter, with Dollar General reporting same-store sales growth of about 14 per cent for the period between Oct. 31 and Dec.1.
Still, the company did not provide a forecast for the rest of the year, like its peer Dollar Tree, citing the uncertainty caused by the pandemic.
Shares of Dollar General, which typically sells products for US$10 or less, were down after having risen about 40 per cent so far this year.
Dollar General has stores concentrated in rural locations, which makes them a one-stop place for customers - who have few other options nearby - to buy everything from home decor, party supplies to everyday essentials.
Industrial conglomerate 3M Co. (MMM-N) finished flat as the company unveiled plans to cut about 2,900 jobs globally and scale back on investments in slower-growing markets as part of a restructuring.
The company said it expects to record a pre-tax charge of US$250-million to US$300-million due to the move, with US$120-million to US$150-million to be incurred in the fourth quarter of 2020.
“The COVID-19 pandemic has advanced the pace of change and disrupted end markets around the world, increasing the need for companies to adapt faster,” Chief Executive Officer Mike Roman said.
3M said the restructuring actions would allow it to take advantage of global market trends in e-commerce, health care, automotive electrification and home improvement.
The company had 96,163 employees as of Dec. 31, 2019.
U.S. supermarket chain Kroger Co. (KR-N) missed Wall Street estimates for sales on Thursday as online grocery demand slowed in the third quarter, sending shares down.
Kroger’s quarterly sales rose to US$29.72-billion in the third quarter from US$27.97-billion a year earlier, but still missed the Refinitiv IBES estimate of US$29.97-billion.
Digital sales more than doubled, but was down compared with last quarter’s 127-per-cent growth.
The chain, however, forecast adjusted profit per share for 2020 between US$3.30 and US$3.35, compared with a prior range of US$3.20 to US$3.30 per share and Refinitiv IBES estimate of US$3.30.
With files from staff and wires