A roundup of some of the North American equities making moves in both directions today
On the rise
Canada Goose Holdings Inc. (GOOS-T) soared on Thursday in the wake of beating Wall Street estimates for quarterly revenue on Thursday, boosted by a surge in online sales and demand for the company’s luxury parkas in China.
The luxury parka maker is doubling down on the Chinese market, opening new stores and collaborating with Chinese designer Angel Chen for a new collection, to tap into the pockets of affluent consumers who cannot travel as freely as they once used to.
Global e-commerce revenue jumped 39.3 per cent in the reported quarter, helping the company post revenue growth for the first time since the onset of the pandemic.
Toronto-based Canada Goose also said net income fell to $107.0-million, or 96 cents per share, from $118-million, or $1.07 per share, a year earlier.
Revenue rose to $474.0-million from $452.1-million a year earlier, beating the average analyst estimate of $415.27-million.
Air Canada (AC-T) was higher after saying it will pause all operations of its Rouge aircraft indefinitely and lay off 80 employees starting Feb. 8.
The airline’s announcement comes as Canadian airlines suspend all flights to Mexico and the Caribbean at the request of the federal government.
The company says its flights to the region were primarily operated by Rouge.
Air Canada announced layoffs of around 1,700 employees in January, when they saw a drop in bookings because of a new requirement that travellers entering Canada show proof of a negative COVID-19 test.
In addition to the most recent flight suspensions, Prime Minister Justin Trudeau announced a series of additional travel restrictions on Jan. 29, including a requirement that entrants to Canada quarantine in hotels at their own expense.
BCE Inc. (BCE-T) rose after announcing Bell Canada is speeding up its network investments, with plans to boost its infrastructure spending to roughly $4.7-billion this year as it looks to bring internet to more homes and double the size of its 5G wireless footprint.
Bell’s plan to accelerate its capital expenditures comes amid growing demand for broadband due to the COVID-19 pandemic, which has moved workplaces, schools and entertainment online. That has resulted in record levels of traffic on Canada’s telecom networks.
The telecom announced the increase to its network investments as it reported $932-million in profits during the fourth quarter, up 28.9 per cent from a year ago, when it had $723-million in in quarterly profit. Revenue for the three-month period ended Dec. 31 was $6.1-billion, down slightly $6.28-billion during the same quarter last year. The earnings amounted to 98 cents per share, up from 74 cents per share.
Analysts had been expecting earnings of 74 cents per share and revenue of $6.16-billion, according to the consensus estimate from S&P Capital lQ.
- Alexandra Posadzki
Montreal-based biopharmaceutical firm Theratechnologies Inc. (TH-T) rose after announcing the United States Food and Drug Administration (FDA) has granted fast track designation to its TH1902 treatment for patients with sortilin positive recurrent advanced solid tumors that are refractory to standard therapy.
“Receiving fast track designation for TH1902 at this early stage of development is a significant recognition for our SORT1+ Technology and further supports the future development of TH1902. The designation, which applies to all solid tumours expressing sortilin, also highlights the broad applicability and immense medical need for innovative, targeted, and potentially more effective and better-tolerated therapies for cancer,” said Theratechnologies’ Senior Vice President and Chief Medical Officer Dr. Christian Marsolais.
NorthIsle Copper & Gold Inc. (NCX-X) jumped higher in response to the release of the results of a Preliminary Economic Assessment for its 100-per-cent owned North Island Project.
The Vancouver-based company said the PEA confirms Red Dog and Hushamu deposits are “one of the most attractive copper-gold porphyry projects in Canada.”
PayPal Holdings Inc. (PYPL-Q) soared in the wake of beating Wall Street estimates for quarterly profit on Wednesday after the bell, with a coronavirus-driven shift to online shopping and digital transactions driving record levels of payment volumes for both the quarter and the year.
PayPal said it was expecting an addition of about 50 million active users in 2021 and forecast annual revenue of about US$25.5-billion, well above the US$21.4-billion estimated by analysts.
“At the beginning of the pandemic, consumers amid lockdown had no choice but to do all of their shopping online,” Chief Executive Officer Dan Schulman said.
“Today, the vast majority of consumers state that post pandemic, they will continue to shop online at their current elevated levels because it is more convenient, easier and saves time,” Mr. Schulman added.
Online payments have got a boost since the start of the pandemic as people stuck indoors rely on mobile apps for shopping and paying bills.
San Jose, California-based PayPal said 2020 was its strongest ever annual performance as it processed a record US$936-billion in payments.
U.S. holiday sales jumped 8.3 per cent last year to record their best growth in at least 19 years, the National Retail Federation said last month.
PayPal’s processed payments in the latest quarter rose 39 per cent to US$277.1-billion, with an additional 16 million net new active customers.
Venmo, PayPal’s service that allows individuals in the United States to send each other money through an app, processed 60 per cent more in payments in the quarter.
The company reported adjusted earnings of US$1.08 per share in the fourth quarter ended Dec. 31, higher than analysts’ average estimate of US$1 per share, according to Refinitiv IBES.
The New York Times Co. (NYT-N) was up after it reported better-than-expected quarterly revenue on Thursday as digital readership soared in a quarter that was dominated by heavy news coverage around the U.S. elections and the COVID-19 pandemic.
The publication’s readership has consistently risen throughout former U.S. President Donald Trump’s presidency and the company’s digital business has also benefited as readers increasingly choose to read news over the web.
The company’s total revenue rose to US$509.36-million in the fourth quarter from US$508.36-million a year ago, above analysts’ estimates of US$498.3-million, according to IBES data from Refinitiv.
“Our work, which was consumed at historic levels, led to a year of strong business results, including a record 2.3 million net new digital-only subscription additions,” Chief Executive Officer Meredith Kopit Levien said.
Net income attributable fell to US$10.01-million, or 6 US cents per share, from US$68.21-million, or 41 US cents per share, a year earlier.
On the decline
Canada’s second-biggest oil company said it exceeded operating cost reduction targets, reaffirmed commitment to significantly reduce its debt and increase returns to shareholders in 2021.
The company reported a net loss of $168-million in the three months ended Dec. 31, compared with a net loss of $2.335-billion a year earlier.
Crude oil and refined product realizations in the fourth quarter were significantly lower than the prior year period, with crude oil and crack spread benchmarks declining by more than 25 per cent due to the continued impact of the COVID-19 pandemic, Suncor said.
The company produced 769,200 barrels of oil equivalent per day (boepd), down from 778,200 boepd in a year ago. Refinery utilization was 95 per cent, compared to 97 per cent a year earlier.
On Thursday before the bell, oil producer EnQuest agreed to buy Suncor’s 27-per-cent stake in the Golden Eagle fields for $325-million, roughly equivalent to its market capitalization, on the back of a planned debt refinancing and equity raise, it said on Thursday.
The company, which has net debt of around $1.3-billion, said the deal would add around 10,000 barrels of oil equivalent per day to its output and $100-million in net present value, meaning the difference between projected earnings and costs.
Golden Eagle, operated by Chinese-owned oil and gas firm CNOOC, would earn EnQuest around $13-million a month, Chief Financial Officer Jonathan Swinney said.
The Montreal-based music and media company says its profit for the quarter amounted to 19 cents per diluted share, which grew from a profit of 11 cents per diluted share.
Revenue totalled $72.6-million, down from $81.3-million.
On an adjusted basis, Stingray says it had a profit of $21.1-million, compared with a profit of $16.7-million from the same time a year earlier.
Stingray had an adjusted profit of 29 cents per diluted share, up from an adjusted profit of 22 cents per diluted share in the prior year.
The company was expected to report an adjusted profit of 17 cents per share on $74.4-million, according to financial data firm Refinitiv.
Lightspeed POS Inc. (LSPD-T) dipped despite reporting better-than-expected third-quarter revenue before the bell.
The Montreal-based point-of-sale and e-commerce software provider reported a 79-per-cent jump in revenue year-over-year to US$57.6-million, topping the US$50.2-million expectation on the Street, according to Refinitiv data. It expects fourth-quarter revenue to rise to US$68-$70-million.
Lightspeed also announced a quarterly earnings per share loss of 39 US cents, falling below the consensus projection of a 17-US-cent loss.
In a research report, ATB Capital Markets analyst Martin Toner said: “We continue to believe Lightspeed POS’s revenue will grow at a high rate driven by payments and merchant growth. Results show strong underlying growth in merchants, and payments penetration, when adjusted for acquisitions. The optionality for further M&A continues to exist, however growth in the existing business, driven by a post COVID-19 recovery will drive the stock in the near term.”
“We believe these results will be well received by the market, support the recent move in the stock and push it higher.”
Canaccord Genuity Group Inc. (CF-T) gave back early gains and was down after announcing it is selling a stake in its British wealth management business to a U.S. private equity fund, raising the equivalent of $210-million that is earmarked for expanding Canada’s largest independent investment dealer.
Toronto-based Canaccord announced late Wednesday that HPS Investment Partners LLC, a New York-based fund manager, is buying £125-million of convertible preferred shares in its British wealth division, which represents a 22-per-cent ownership stake.
“Partnering with HPS provides us with an opportunity to build upon the exceptional growth that our U.K. wealth management business has achieved,” Canaccord chief executive officer Dan Daviau said.
Canaccord had expanded its asset management businesses in Britain, Europe and Australia through acquisitions. The company has $52-billion of client assets under management in Britain and Europe, up 8 per cent over the past year, and oversees total client assets of $85-billion. In an interview, Mr. Daviau said British wealth management industry continues to consolidate around its largest players and Canaccord sees the potential to double the size of this business with HPS’s support.
- Andrew Willis
Telus International Inc. (TIXT-T) reversed early gains and declined in the wake of soaring in its public market debut on Wednesday after boosting the size of its initial public offering and pricing its stock at the top of its planned IPO range, making it the latest tech company to receive a warm reception from investors.
The 15-year-old company, which provides outsourced online customer service for brands such as Fitbit Inc., Uber Technologies Inc. and online gamer Zynga Inc., began trading on the Toronto Stock Exchange and the New York Stock Exchange, opening at US$33.10 – above its IPO price of US$25 a share. It finished the day at US$30.40. The Vancouver-based company, an offspring of Telus Communications Inc., plans to use its public listing in an expansion strategy that includes paying for future acquisitions by issuing stock.
Telus International kicked off a roadshow last week to market its IPO. At the time, the company said it was expecting to price its shares at US$23 to US$25, and to offer 33.33 million subordinate voting shares, including 21.93 million from its treasury and 11.40 million from its owners, Telus and Baring Private Equity Asia.
- Alexandra Posadzki and Andrew Willis
Turquoise Hill Resources Ltd. (TRQ-T) dipped after it said on Thursday it has received temporary relief in the arbitration proceedings against Rio Tinto, related to the proposed funding of the Oyu Tolgoi mine.
As a result of the order, Rio Tinto may not use the parties’ existing contractual arrangements to restrict Turquoise Hill from engaging on funding and other matters with its fellow stakeholders in the mine, the Canadian miner said.
Oyu Tolgoi is one of the world’s largest-known copper and gold deposits, located in the South Gobi region of Mongolia. The Mongolian government holds a 34-per-cent stake in the project with Rio’s majority-owned Turquoise Hill owning the rest.
Until further order, Rio Tinto may also not authorize re-profiling negotiations with project lenders in a manner that would render Oyu Tolgoi LLC unable to execute an offering of bonds in 2021, Turquoise added.
Resolute Forest Products Inc. (RFP-T) was down after saying it lost US$52-million in its latest quarter compared with a loss of US$71-million in the same quarter a year earlier.
The forestry company says the loss amounted to 63 US cents per share for the quarter ended Dec. 31 compared with a loss of 79 US cents per share in the last three months of 2019.
Sales in what was the company’s fourth quarter totalled US$769-million, up from US$668-million a year earlier.
Excluding special items, Resolute says it earned US$45-million or 55 US cents per diluted share in its latest quarter compared with a loss of US$53-million or 59 US cents per share in the fourth quarter of 2019.
Analysts on average had expected an adjusted profit of 53 US cents per share for the quarter and US$743.5-million in revenue, according to financial data firm Refinitiv.
The Montreal-based meal kit company will issue 4.8 million shares at $12.50 per share.
Acumen Capital analyst Jim Byrne said: “With over $104-million in cash and only $32-million in debt outstanding, we view the equity dilution as a result of the financing slightly negative.”
American Airlines (AAL-Q) was down after saying on Wednesday that some 13,000 employees are at risk of furlough when a U.S. aid package for airline workers expires on April 1, blaming slow vaccine rollouts and new international travel restrictions for dampening demand.
“We are nearly five weeks into 2021, and unfortunately, we find ourselves in a situation similar to much of 2020,” Chief Executive Doug Parker and President Robert Isom said in a memo to employees which was also included in a regulatory filing.
Fort Worth, Texas-based American furloughed 19,000 workers when a previous round of government payroll support ended on Oct. 1 but recalled them in December after a fresh US$15-billion for the industry through March.
Aviation unions are already pushing for another US$15-billion in U.S. payroll assistance to protect jobs through the summer.
“The vaccine is not being distributed as quickly as any of us believed, and new restrictions on international travel that require customers to have a negative COVID-19 test have dampened demand,” American said, adding that the company will not fly all of its aircraft this summer as planned.
United Airlines has sent fresh furlough warnings to 14,000 employees, while Delta Air Lines Inc and Southwest Airlines Co have averted layoffs mostly thanks to voluntary leave programs.
Merck & Co Inc. (MRK-N) slipped after it said Kenneth Frazier, one of only a handful of Black executives leading major U.S. companies, would step down as chief executive officer at the end of June to be replaced by Chief Financial Officer Robert Davis.
Mr. Frazier, 66, will remain with the drugmaker as executive chairman for a transition period to be determined by the board.
Mr. Davis has been CFO of Merck since 2014 and has been in charge of the company’s business development, real estate and other corporate strategic functions since 2016.
A career healthcare executive, he was the president of Baxter International Inc’s medical products business before joining Merck and also spent 14 years at Eli Lilly and Co.
Merck also announced it posted a big fourth-quarter loss due to a hefty charge and higher spending on research, production and overhead.
Yum Brands Inc. (YUM-N) declined as it beat estimates for fourth-quarter revenue and profit on Thursday, as Americans bought more tacos, pizzas and fried chicken online even as business of the KFC owner remained pressured in certain European markets.
Yum also said digital sales surged 45 per cent to a record high of US$17-billion in 2020.
Fast-food chains in the United States, including Yum and rivals McDonald’s and Chipotle Mexican Grill, have been benefiting from earlier investments in their online business as the pandemic led to a spike in online and drive-thru orders.
In the fourth quarter ended Dec. 31, Yum’s KFC and Pizza Hut divisions posted same-store sales growth of 8 per cent each in the United States even as they dropped at least 4 per cent each in international markets.
Yum’s KFC has begun switching to a new chicken sandwich with a larger white meat filet in the place of its Crispy Colonel sandwich in the United States, while Pizza Hut has launched pizzas with plant-based meat maker Beyond Meat’s sausage.
Overall revenue rose about 3 per cent to US$1.74-billion, beating the Refinitiv IBES estimate of US$1.72-billion. Excluding items, Yum earned US$1.15 per share, beating the estimate of US$1.01 apiece.
With files from staff and wires