On the rise
Aphria Inc. (APHA-T) soared after it posted a quarterly adjusted profit on Thursday compared to year-ago loss, as demand for cannabis and related products surged during the cornavirus-induced lockdowns.
The results come on the heels of Democrats securing control of the U.S. Senate, which paves the way for Congress to potentially approve legislation that would repeal the nearly century-long federal prohibition on cannabis.
Aphria had earlier announced in December it would merge with rival Tilray Inc, creating the world’s largest cannabis producer by sales and giving it a foothold in the fast-growing U.S. market.
The Ontario-based pot company posted adjusted net income of $3.2-million, or 1 cent per share, in the second-quarter ended Nov.30, compared with a loss of $48.8-million, or 19 cents per share.
Its net revenue rose 33.1 per cent to $160.5-million. On a sequential basis, revenue was up 10.2 per cent due to an increase in distribution revenue at its German unit CC Pharma.
Vancouver-based Artizia Inc. (ATZ-T) was up in response to the release of better-than-anticipated third-quarter 2021 results after the bell on Wednesday.
The Vancouver-based women’s fashion retailer reported revenue and EBITDA of $278-million and $55-million, respectively, exceeding the consensus expectations.
“In our view, Aritzia has done a great job of navigating a changing retail landscape by offering an aspirational customer experience within its brick-and-mortar locations and an improved e-commerce platform,” said Canaccord Genuity’s Derek Dley in a research note.
Delta Air Lines (DAL-N) shares were higher in the wake of CEO Ed Bastian saying he expects 2021 to be “the year of recovery” after the coronavirus pandemic cut operating revenue by 64 per cent and prompted its first annual loss in 11 years.
“We don’t anticipate that by the summer travel will be back anywhere close to where it previously was, but it will be a meaningful improvement, sufficient to be able to drive profitability for us in the back half of the year,” Bastian told Reuters.
The strength of the recovery will hinge on factors such as the pace of vaccine rollouts and people’s appetite for flying after a year that nearly brought global travel to a halt.
In the first quarter, the Atlanta-based airline expects revenue to fall by 60 per cent to 65 per cent from a year ago and its scheduled flight capacity to shrink by 35 per cent.
As it continues to block middle seats at least through March 30, it expects the actual capacity it sells to fall by around 55 per cent.
“When the demand for air travel picks up because of confidence, that’s going to be the indication that we start selling those middle seats,” Bastian said.
It lost an average of US$12-million a day in the fourth quarter, but remains on track to halt its cash burn in the spring, the airline said.
Delta, the first U.S. airline to post 2020 results, reported a US$12.4-billion loss - its first since 2009 - on operating revenue of US$17-billion. It recorded a US$4.8-billion profit a year earlier.
It lost US$755-million in the fourth quarter, or US$1.19 per share.
U.S.-listed shares of Taiwan Semiconductor Manufacturing Co Ltd. (TSM-N) rose after it posted its best-ever quarterly profit and hiked revenue and capital spending estimates to record levels as it forecast “multiple years of growth opportunities.”
The world’s top contract chipmaker has become increasingly bullish as remote work amid the coronavirus pandemic drives demand for advanced chips to power premium devices - demand that is expected to continue to surge as 5G technology and artificial intelligence applications are adopted more widely.
TSMC now expects to lift capital spending on the production and development of advanced chips to between US$25-billion-$28-billion this year, as much as 60 per cent higher than the amount it spent in 2020.
It also revised up its compound annual growth rate targets for revenue during the 2020 to 2025 period to 10-15 per cent from an earlier estimate of 5-10 per cent.
Demand for chips has been so high that manufacturers around the world are sounding alarm bells about shortages. Several car makers have seen production plans hit by insufficient supply, leading TSMC to see a jump in demand from automakers in the fourth quarter.
Shares of Poshmark Inc. (POSH-Q) soared more than 130 per cent in their stock market debut on Thursday, valuing the online fashion marketplace at US$7.15-billion, highlighting investor optimism for online shopping that has surged during the COVID-19 pandemic.
Shares opened at US$97.5 on the Nasdaq, well above the initial public offering (IPO) price of US$42 apiece. The company raised US$277.2 million in its IPO on Wednesday.
Poshmark, whose board members include the likes of tennis legend Serena Williams, has debuted in a week that could be the biggest for new listings in more than five years, as companies seek to make the most of the strongest IPO market in two decades.
Petco (WOOF-Q), the pet store chain, went public again Thursday, hoping to cash in on people’s obsessions with their furry pets.
Petco’s stock, which opened at US$18 Thursday, soared 60 per cent to US$29.26 in afternoon trading, valuing the company at more than US$6-billion. It raised $864 million, after selling 48 million shares in its initial public offering. The company plans to use that money to pay off debt.
It’s the third time Petco has gone public since it was founded in 1965 as a mail-order veterinary supplies business. Both times Petco was bought and taken private, most recently in 2006.
Much has changed since then. Pets, which were once banished to the backyard, are now sleeping in human beds as Americans increasingly treat their cats and dogs like family members. Spending on treats, medicine and pet-sitting is expected to reach a record US$99-billion last year, according to the American Pet Products Association.
To lure free-spending pet parents, San Diego-based Petco has been shaking up its image as more than just a place to buy kibble. At its nearly 1,500 stores, dogs can get a fur trim, visit a vet, take a training class or try on a new outfit.
On the decline
Alimentation Couche-Tard Inc. (ATD.B-T) fell slightly after France’s Finance Minister on Thursday said any takeover of French retailer Carrefour by a foreign company would be a “major difficulty,” as the government wants to preserve the country’s food security and sovereignty.
The Canadian convenience-store operator’s near $20-billion takeover approach for Carrefour - continental Europe’s largest retailer - has also raised French government concerns about job security at one of the country’s largest employers.
“Having Carrefour being bought by a foreign company would be a major difficulty for all of us,” Bruno Le Maire said in an interview at the Reuters Next conference.
“Food security is at the core of the strategic challenges of all developed nations,” he said.
Labour Minister Elisabeth Borne underlined the political opposition to a takeover of Carrefour by Alimentation Couche-Tard, calling for no change in the company’s current shareholding structure.
“I am in favor of not questioning Carrefour’s current shareholding structure and allowing (the company) to pursue its strategy, so (I am) opposed to a takeover,” Ms. Borne told Europe 1 radio.
Barrick Gold Corp. (ABX-T) was lower in the wake of saying on Thursday its fourth-quarter gold production rose 4.4 per cent from the previous quarter, partly due to higher output at its Pueblo Viejo mine in the Dominican Republic.
Gold prices touched record highs in 2020, as investors flocked to the safe haven asset while the COVID-19 pandemic roiled the markets. In the fourth quarter, market prices averaged US$1,875 per ounce, 26.4 per cent higher than a year earlier.
Total preliminary gold production rose to 1.21 million ounces in the quarter ended Dec. 31 from 1.16 million ounces in the previous quarter.
Output at the Pueblo Viejo rose 23.26 per cent to 159,000 ounces of gold. Fourth-quarter output also got a boost from the ramp-up of operations at Bulyanhulu mine in Tanzania and ongoing improvement at Turquoise Ridge in Nevada.
Barrick, scheduled to report fourth-quarter results on Feb. 18, said it expects all-in sustaining costs for gold, a key industry metric, to decrease 3 per cent to 5 per cent compared to third quarter.
Copper production also rose 15.5 per cent to 119 million pounds, as plant maintenance at Lumwana in Zambia was completed in the third quarter. All-in sustaining costs per pound of copper were expected to be 4 per cent to 6 per cent higher than third quarter.
Tesla Inc. (TSLA-Q) dropped after the electric-car maker was asked to recall 158,000 Model S and Model X vehicles in the United States for touchscreen failures that could lead to safety risks.
The auto safety agency made the unusual request in a formal letter to Tesla after upgrading a safety probe in November, saying it had tentatively concluded the 2012-2018 Model S and 2016-2018 Model X vehicles “contain a defect related to motor vehicle safety.”
Tesla did not immediately respond to a request for comment but it must respond to NHTSA by Jan. 27. If it does not agree it must provide the agency “with a full explanation of its decision.”
It is unusual for the agency to formally demand a recall. Automakers typically voluntarily agree to a recall if sought in discussions by regulators.
BlackRock Inc. (BLK-N), the world’s largest asset manager, rose after it reported a better-than-expected quarterly profit, as increased activity in financial markets resulted in higher fees and pushed its assets under management to record highs.
The company’s adjusted net income of US$10.18 per share in the fourth quarter ended Dec. 31 topped Wall Street estimates of US$9.14, according to Refinitiv IBES data.
Assets under management grew to US$8.68-trillion at the end of the quarter, from US$7.43-trillion a year earlier.
Increased volatility in the quarter - stemming from the U.S. presidential elections and the release of several COVID-19 vaccines - saw investors piling into BlackRock’s exchange-traded funds, as well as active funds that aim to beat the market.
The asset manager raked in higher investment and advisory fees, its biggest source of revenue, through the quarter.
BlackRock’s shares were trading at record highs as investors bet on the company benefiting from improving market conditions.
A mix of accommodative monetary policy and optimism over increased stimulus measures have seen global equities scaling record highs since end-2020, with investors betting on a steady economic recovery in 2021.
With files from staff and wires