A roundup of some of the North American equities making moves in both directions today
On the rise
Superior Plus Corp. (SPB-T) gained ground with the premarket announcement thtait has entered into an agreement with Birch Hill Equity Partners, a privately held Toronto firm, for the sale of its Specialty Chemicals business for total consideration of $725-million
In a research note, Industrial Alliance Securities analyst Elias Foscolos said: “We expect the market to react positively to the news that SPB has agreed to sell its Specialty Chemicals (SC) division. While the transaction value of $725-million might be lower than some would like, we believe it is attractive for SPB. Positives include (a) SPB will become a pure-play energy distribution company providing EBITDA stability and a potential multiple boost, (b) provide financial flexibility to accelerate consolidation of the North American retail propane distribution business, and (c) add value through synergy capture in the acquisitions which it can now fund.”
Average realized price for copper jumped about 26 per cent to US$3.42 per pound, while sales stood at 80,000 tons compared with 75,000 tons a year earlier.
Gross profit at the business nearly tripled to $368-million in the fourth quarter.
Copper sales for 2021 are expected at 275,000 tons to 290,000 tons, compared with 277,000 tons a year earlier, the company said.
The company, however, reported lower profit in its crucial steelmaking coal business, which has been pressured by the pandemic-induced fallout.
Average realized prices for the commodity were down over 18 per cent in the fourth quarter, with sales of 6.1 million tons, compared to 6.3 million tons a year earlier, Teck said.
Steelmaking coal sales are expected to between 5.9 million tons and 6.3 million tons in the first quarter, higher than the 5.7 million tons sold in the same period of 2020.
Teck said it had met its year-end target of about 40-per-cent construction work at its Quebrada Blanca Phase 2 copper mine in Chile, which it had suspended in March and started ramping up since the third quarter.
Adjusted profit attributable to shareholders rose over 11 per cent to $248-million, or 46 cents per share, in the quarter.
Analysts had expected a profit of 35 cents, according to Refinitiv I/B/E/S data.
Calgary-based Crescent Point Energy Corp. (CPG-T) soared after announcing it will pay $900-million in cash and shares to Shell Canada to acquire a suite of assets in Northern Alberta’s Duvernay region
The deal – one of three announced in the sector Wednesday – is the latest in a recent flurry of oil-patch mergers and acquisitions, as oil and gas strengthens and investors call for more consolidation to improve profitability after years of malaise.
Crescent Point will pay $700-million in cash, in addition to 50 million shares (worth $200-million), to acquire Shell’s Kaybob Duvernay play, bringing the total value of the deal to around $900-million.
Craig Bryksa, Crescent Point’s chief executive, said Wednesday that the assets are a “significant inventory of high-return locations” with more than 10 years of remaining production life.
- Emma Graney and Jeffrey Jones
The Mississauga-based firm adjusted earnings per share of $2.24, exceeding the consensus projection on the Street of $1.92, after generating record total loan originations of $334-million.
After reinstating its three-year outlook, Goeasy increased its annual dividend to $2.64 from $1.80.
Raymond James analyst Stephen Boland said: “GSY reported a solid quarter of earnings which was above our estimates. Loan growth was 7 per cent year-over-year and the charge-off rate was 9.0 per cent, well below historic levels. 3-year guidance was restored and growth in the receivables is expected to average 17 per cent over that period while maintaining a ROE of 25 per cent-plus. The utilization of the loan protection program appears to be similar to pre-COVID levels. The conference call is later this morning. However, this was another quarter that demonstrated management’s correct strategy to weather the pandemic and be in a solid position to re-grow the loan book.”
TC Energy Corp. (TRP-T) was flat despite saying it expects to take a “substantive” charge when it reports its first-quarter results for 2021 due to the decision by U.S. President Biden to revoke the presidential permit for its Keystone XL pipeline.
The company says it couldn’t yet say what the size of the charge will be, which it expects to be predominantly non-cash, would be, but that it was assessing its options.
It also noted that the viability of certain projects currently associated with the Keystone XL pipeline was also being reviewed.
“While we were disappointed with the recent action to revoke the presidential permit for the Keystone XL pipeline, we have a large and diversified asset base that continues to perform extremely well and are advancing $20 billion of secured capital projects, together with a substantive portfolio of other similarly high quality opportunities under development,” TC Energy chief executive Francois Poirier said in a statement.
The comments came as TC Energy raised its quarterly dividend to 87 cents per share from 81 cents and reported its fourth-quarter profit rose compared with a year ago.
TC Energy said it earned a profit attributable to common shareholders of $1.12-billion or $1.20 per share on $3.30-billion in revenue for the quarter ended Dec. 31 compared with a profit of $1.11-billion or $1.18 per share on $3.26-billion in revenue a year earlier.
The company said its comparable earnings for the quarter amounted to $1.15 per share, up from $1.03 per share in the fourth quarter of 2019.
Analysts on average had expected an adjusted profit of $1.01 per share and $3.44-billion in revenue, according to financial data firm Refinitiv.
Marriott International Inc. (MAR-Q) was up after it reported a quarterly loss on Thursday as the world’s largest hotel chain’s bookings declined due to pandemic-induced travel restrictions.
While hotel occupancy rates have bounced back from the pandemic lows hit last year, the emergence of new variants of the coronavirus has cast a shadow on the recovery of the hospitality industry as countries impose fresh travel curbs.
Analysts expect a wider rollout of COVID-19 vaccines later this year to first aid a rebound in leisure travel, leaving hotel chains including Hilton and larger rival Marriott which rely more on business travel, struggling for longer.
Marriott’s fourth-quarter revenue per available room (RevPAR) - a key measure for a hotel’s top-line performance - fell 64.1 per cent to US$40.28.
The company posted a net loss of US$164-million, or 50 US cents per share, for the fourth quarter ended Dec. 31, compared with a profit of US$279-million, or 85 US cents per share, a year earlier.
Revenue fell to US$2.17-billion from US$5.37-billion.
On the decline
Barrick Gold Corp. (ABX-T) declined after reported a quarterly profit on Thursday that beat analysts’ estimates, helped by a jump in gold prices due to coronavirus-induced economic uncertainty.
Gold prices touched record highs in 2020, as investors flocked to the safe-haven asset while the COVID-19 pandemic roiled the global economy. In the fourth quarter, market prices averaged US$1,875 per ounce, 26.4% higher than a year earlier.
Barrick said its all-in sustaining costs (AISC) for the reported quarter, an important metric for miners, rose to US$929 per ounce from US$923 last year.
For 2021, the company expects AISC to be between US$970 and US$1,020 per ounce, compared with US$967 in 2020.
Barrick said it expects full-year production to be between 4.4 million ounces and 4.7 million ounces, compared with its 2020 production of 4.8 million ounces.
The miner expects copper production in the range of 410 million to 460 million pounds this year, compared with production of 457 million pounds last year.
Quarterly net income nearly halved to US$685-million as the company had gains related to some assets and acquisitions in the year-earlier quarter.
On an adjusted basis, profit rose to US$616-million, or 35 US cents per share, in the fourth quarter ended Dec. 31, from US$300-million, or 17 US cents per share, a year earlier.
Analysts on an average had expected a profit of 32 US cents per share, according to Refinitiv IBES data.
Saskatoon-based fertilizer maker Nutrien Ltd. (NTR-T) reversed course and fell after it posted fourth-quarter profit above analysts’ estimates after the bell on Wednesday as potash demand rose amid rising crop prices.
Fertilizer producers have benefited from high U.S. crop exports, including record-large corn sales to China. With crop prices touching multi-year highs, farmers are poised to plant more acres in 2021 and would require more fertilizers for their plantings.
“Agriculture fundamentals began to improve in late 2020 and we are starting to see the benefit to our business from this cyclical recovery,” Chief Executive Officer Chuck Magro said.
Rival Mosaic (MOS-N) also topped Wall Street estimate for quarterly profit as its potash sales improved, however its shares fell.
Improving fertilizer markets during the second half of 2020 reflected the tightening supply and demand balance in both potash and phosphates, Mosaic said.
Nutrien said on Wednesday it expects annual adjusted profit to range between US$2.05 per share and US$2.75 per share, the mid-point of which was slightly higher than analysts’ average estimate of US$2.38 per share, according to Refinitiv IBES data.
Adjusted core earnings from its potash segment jumped nearly 48 per cent to US$220-million in the fourth quarter ended Dec. 31.
Potash sales volumes increased nearly 29 per cent due to strong domestic and offshore demand, supported by improved global crop prices, increased planted acreage in the United States and strong fall application in North America in anticipation of higher planting in 2021, Nutrien said in a statement.
It posted adjusted net income of US$138-million, or 24 US cents per share, compared with US$54-million, or 9 US cents per share, a year earlier. Analysts were expecting a profit of 17 US cents per share.
Nutrien also increased its quarterly dividend to 46 US cents and approved the purchase of up to 5 per cent of its outstanding shares over a one-year period.
Stelco Holdings Inc. (STLC-T) dipped after saying its net loss almost doubled to $47-million in the fourth quarter as revenues dropped due to a blast furnace upgrade.
The Hamilton-based steel maker says it lost 53 cents per diluted share, compared with a loss of 27 cents per share or $24-million a year earlier.
Adjusted profits increased to $45-million or 15 cents per diluted share, compared with a loss of $13-million or 15 cents per share in the fourth quarter of 2020.
Revenues decreased three per cent to $424-million from $435-million in the prior year’s quarter as shipping volume fell 23 per cent while average selling prices climbed 10 per cent to $728 per ton.
Stelco was expected to earn 31 cents per share in adjusted profits on $465-million of revenues, according to financial data firm Refinitiv.
For the full-year, Stelco lost $159-million or $52-million on an adjusted basis on $1.52-billion of revenues. That compared with a $20-million profit and $42-million adjusted profit on $1.84-billion of revenues.
“Our end-markets are very strong as the broader economy and our key markets continue to grow and diversify,” stated executive chairman and CEO Alan Kestenbaum.
“Stelco is positioned to capitalize on emerging opportunities, in particular in the electric vehicle market, with increased capacity to produce a full suite of products in response to market demands.”
Canadian Tire Corp Ltd. (CTC.A-T) fell despite breezing past profit estimates and posted a 13-per-cent growth in holiday-quarter revenue on Thursday, as the home and sporting goods retailer’s online sales more than doubled on the back of a pandemic-led boom in e-commerce.
Demand for pool supplies, garden equipment and other home-related items has boomed since the onset of the COVID-19 outbreak as people splurge more on remodeling their living spaces during lockdowns.
Canadian Tire has been investing more in e-commerce in recent months, and doubling down on sportswear and apparel at its Mark’s and SportChek stores to attract younger shoppers.
Overall retail revenue jumped about 15 per cent to $4.58-billion, while company revenue rose about 13% to $4.87-billion in the fourth quarter ended Jan. 2.
Canadian Tire has also been controlling costs by centralizing operations including marketing and sourcing for its multiple retail banners, even as it incurs heavy supply chain costs due to the health crisis.
The automotive, home and sporting goods retailer’s net income attributable to its shareholders jumped about 46 per cent to $488.8-million, or $7.97 per share.
Excluding items, Canadian Tire earned $8.4 per share, crushing a Refinitiv IBES estimate of $6.69.
Shares in the company have jumped about 5 per cent this year.
The Nanaimo-based cannabis company revealed Wednesday that its fourth quarter net loss dropped to US$2.9 million or two cents per share, from a loss of US$219.1-million or US$2.14 per share during the same quarter the year prior.
Tilray chief executive Brendan Kennedy attributed the significant reduction to the company signing European distribution deals, taking advantage of a surge in new cannabis store openings, unveiling a new sour cherry tetrahydrocannabinol product and reducing some prices to drive sales.
“2020 was a year in which the Tilray team delivered outstanding results despite challenging conditions,” said Mr. Kennedy, on a call with analysts.
“While the pandemic presented unanticipated challenges, it did not hinder our progress.”
Streamlining the company and reducing losses has become increasingly important for Tilray as it nears its merger date and as the illicit market remains resilient.
The Tilray-Aphria deal is expected to close in the second quarter 2021 and deliver at least US$100 million of annual pre-tax cost synergies within two years of closing.
The new company will operate under the Tilray name with Aphria chief executive Irwin Simon at the helm. It is expected to control more than 17 per cent of the retail cannabis market — the largest share held by any Canadian licensed producer.
The amount of cannabis Tilray sold decreased by 54 per cent to reach 6,901 kilograms in its fourth quarter, from 15,039 kilograms in the prior year.
The decrease was due almost entirely to the reduction of bulk sales, Tilray said.
Its average cannabis net selling price per gram dropped to $7.99 from $8.15 in the third quarter as Tilray faced pressure to keep prices competitive in the Canadian recreational market.
Analysts and investors appeared pleased with Tilray’s quarter, especially because revenue reached US$56.5-million, up from US$46.9-million previously.
Brenda O’Farrell, a senior analyst at Investing.com, called Tilray’s performance “stellar” in a note and said it “did not disappoint.”
“As the cannabis sector overall continues to find its footing, one of the big questions the industry is wrestling with is: Is bigger better?,” she wrote.
“Well, Tilray’s results are taking the guesswork out of that query and investors were quick to notice.”
Gold miner Newmont Corp. (NGT-T) closed down after saying n Thursday that fourth-quarter adjusted profit more than doubled, driven by higher prices on the back of safe-haven buying during the pandemic.
The miner said averaged realized gold price jumped 25 per cent to US$1,852 per ounce in the quarter, while attributable gold production fell about 11 per cent to 1.6 million ounces.
The company cited the sale of Red Lake and Kalgoorlie, and lower production at Cerro Negro for the drop in production.
The world’s largest gold miner said adjusted profit rose to US$856 million, or US$1.06 per share, in the quarter, from US$410-million, or 50 US cents per share, a year earlier.
Walmart Inc. (WMT-N) lost ground after it forecast slowing sales for fiscal 2022, following a blockbuster year that saw demand for essentials and other items soar as consumers flocked to the retailer during lockdowns linked to the coronavirus pandemic.
The world’s biggest retailer forecast adjusted net sales to grow in the low single digits in fiscal 2022 which ends Jan. 31, much lower than the 8.5-per-cent growth seen in the preceding year. It also expects earnings per share to be flat-to-slightly up, below the 2.2-per-cent growth analysts had been expecting, according to Refinitiv.
Shares were down after Walmart also said it took on about US$1.1-billion in pandemic-related costs during the quarter, including higher wages for warehouse workers, bonuses for store employees and costs related to keeping its stores clean.
Walmart, which employs 1.5 million people in the United States, said it was raising wages to more than US$15 per hour on average.
An early start to the holiday season and a boost from stimulus money late in the fourth quarter drove demand for electronics, toys and groceries.
Sales at U.S. stores open at least a year surged 8.6 per cent, excluding fuel, in the three months ended Jan. 31, well above analysts’ expectations for a 5.6-per-cent rise, according to IBES data from Refinitiv.
“The guidance that we’re going to give this morning really doesn’t include any material stimulus because we just don’t know what will happen. If we get more stimulus certainly that’s a tailwind for us,” Chief Financial Officer Brett Biggs told Reuters in an interview.
Online sales rose 69 per cent in the quarter, blowing past a 35-per-cent increase in the year-earlier period, but slower than a 79-per-cent surge in the third quarter.
The retailer has relied on its scale and strengthening online presence during the pandemic to attract new customers looking for a one-stop shop for their daily needs.
Operating income rose 3.1 per cent to US$5.49-billion in the quarter, while adjusted earnings were US$1.39 per share. Analysts on average were expecting the company to earn US$1.51 per share.
The restaurant franchising company says it earned a net profit attributable to shareholders of $20.1-million or 81 cents per diluted share for the quarter ended Nov. 30, down from $20.7-million or 83 cents per diluted share a year earlier.
Revenue fell to $127.2-million from $156.8-million.
MTY says system sales for the quarter in Canada were down 30 per cent as it was hit by a wave of restrictions related to the pandemic in Quebec and Ontario.
System sales in the U.S. for the fourth quarter rose four per cent, while international system sales fell 40 per cent.
The company behind more than 80 brands including Thai Express, Tiki-Ming, Tutti Frutti and Valentine said 338 locations were temporarily closed at the end of the quarter because of the pandemic, while 408 were closed as of Wednesday.
Lithium miner Albemarle Corp. (ALB-N) plummeted despite reporting a better-than-expected quarter on Wednesday after taking steps to cut costs to battle lower demand and said it sees higher volumes in the current year.
After the coronavirus dented growth prospects last year, Albemarle and its peers like SQM are now expecting to cash in on surging demand for the battery metal lithium, critical to electric vehicles that have become massively popular amid climate change concerns.
Albemarle has earlier said it looks to double production at its lithium facility in Silver Peak, Nevada, part of a plan to boost supply for the burgeoning electric vehicle market, while Chilean miner SQM has said its current plans to boost its production of lithium carbonate and lithium hydroxide by the second half of 2021 remained on track.
“Longer-term, we expect lithium demand to grow in line with greater EV adoption. We are accelerating our lithium growth projects to capitalize on this trend and generate strong investment returns,” Albemarle said on Wednesday.
However, Albemarle warned that it expects pricing to be down slightly, and forecast adjusted profit in the range of US$3.25 to US$3.65 per share for 2021. It earned a profit of US$4.12 per share in 2020.
Tesla Inc. (TSLA-Q) slid after reducing the price of its cheaper variants of the Model 3 sedan and the Model Y sports utility vehicle (SUV), while raising prices for their performance variants.
The price of its Model 3 Standard Range Plus has been lowered to US$36,990 from US$37,990, while the Model Y Standard Range’s price came down to US$39,990 from US$41,990, according to the website.
The carmaker has been making various models in its lineup more affordable at a time when legacy automakers are trying to make inroads in the electric vehicle market.
The standard range of the Model Y was launched in January, bringing its SUV’s price closer to that of the Model 3 sedan, the electric-car maker’s least expensive car.
The prices for the Performance variant of the Model 3 rose to US$55,990 from US$54,990 and Model Y to US$60,990 from US$59,990, the website showed.
The price cuts come as Tesla looks to ramp up its deliveries. Overall, the company delivered 499,550 vehicles during 2020, above Wall Street estimates of 481,261 vehicles.
With files from staff and wires