A roundup of some of the North American equities making moves in both directions today
On the rise
Montreal-based Power Corp. (POW-T) was higher on Thursday in the wake of beating expectations as its net profit attributable to shareholders surged in the final quarter of 2020 as its life insurance business benefited from acquisitions.
The Montreal-based holding company says it earned $623-million or 92 cents per share, up from $179-million or 42 cents per share a year earlier.
Adjusted profits for the three months ended Dec. 31 increased to $627-million or 93 cents per share, compared with $357 million or 84 cents per share in the fourth quarter of 2019.
Power was expected to report 82 cents per share in adjusted profits, according to financial data firm Refinitiv.
For the full-year, its net income reached $1.99-billion or $3.08 per share, up from $1.11-billion or $2.53 per share in 2019. Adjusted profits increased 2.7 per cent to $3 per share from $2.92 in the prior year.
Power holds full control of Power Financial and with that majority stakes in Great-West Lifeco (GWO-T), IGM Financial Inc. (IGM-T) and Wealthsimple Financial Corp., as well as a minority stake in Pargesa Holding.
Canadian Solar Inc. (CSIQ-Q) soared with the premarket release of better-than-anticipated fourth-quarter 2020 results and 2021 guidance.
The Guelph, Ont.-based company reported quarterly revenue and earnings per share of US$1.041-billion and 11 US cents, exceeding the Street’s forecast of US$997.9-billion and a 55-US-cent loss. Its 2021 revenue is expected to be in a range of US$5.6-billion to US$6.0-billion, topping the consensus projection of US$4.93-billion.
It also said the carve-out IPO of its CSI Solar subsidiary remains on track.
Topaz Energy Corp. (TPZ-T) was up with the release of in-line fourth-quarter results and 2021 guidance after the bell on Wednesday.
In a research note, Raymond James analyst Chris Cox said: “2021 guidance is consistent with expectations into the print and reflective of the highly contracted infrastructure assets and a royalty portfolio that offers considerable transparency due to the quality of the counterparties. With the Company remaining in a net cash position even after its recent acquisitions, and with a recently up-sized $300-million credit facility that is entirely undrawn, we continue to view Topaz as uniquely positioned to continue consolidating assets within the basin, supporting a differentiated growth profile relative to peers, alongside an attractive 8-per-cent FCF yield at strip pricing. Accordingly, we reiterate our Outperform rating.”
AMC Entertainment Holdings Inc. (AMC-N) rose after the movie theater operator said it would have 98 per cent of its U.S. locations open from Friday.
Movie theatres all over shuttered their doors a year ago as the coronavirus pandemic swept the globe. While some movie theatres have opened over the past few months with limited capacity and enhanced safety protocols, the announcement by AMC to open nearly all of its U.S. theatres by month’s end means more people will have more locations to choose from if they want to see a film on the big screen.
AMC said that California is expected to open 52 of its 54 locations by Monday. The company is preparing to resume operations at the rest of its California locations once the proper local approvals are in place. AMC previously opened more than 500 of its theatres elsewhere around the country.
AMC’s safety protocols include social distancing and automatic seat blocking in each theatre, mandatory mask wearing, hand sanitizing stations, upgraded air filtration, contactless ticketing and mobile ordering for food and drinks.
Waterloo Brewing Ltd. (WBR-T) saw gains after announcing it’s cutting the prices it charges Ontario’s pubs and restaurants for its most popular brands in an effort to help them recover from the pandemic.
Waterloo CEO George Croft says that starting Monday the brewery will sell a selection of its most popular beers at essentially cost to Ontario pubs and restaurants, for the foreseeable future.
Mr. Croft says the hospitality sector has been among the hardest hit during the pandemic and that the coming months will be difficult.
Thousands of restaurants across the country have been forced to close due to the pandemic and a third wave in Ontario is threatening renewed restrictions.
Waterloo says the price of its Waterloo Dark, IPA, Craft Lager, Grapefruit Radler and Landshark 473-ml tall cans will be reduced by $10 per case of 24.
The price for a 20-litre keg will be cut by $25 per keg and the cost of a 58.6-litre keg will be reduced by $50 on select brands.
On the decline
Alimentation Couche-Tard Inc. (ATD-B-T) slid after it fell short of third-quarter revenue estimates, as people staying at home led to a steep decline in demand for fuel that overshadowed gains from selling more wine and snacks.
Fuel sales across the globe have been pressured as people, largely working and shopping from home, avoid venturing out due to fears of catching the novel coronavirus, with overall store traffic also being stressed due to renewed restrictions.
“Fuel volume results were highly variable with areas of renewed lockdowns showing very soft demand, while other areas strengthened,” Chief Executive Officer Brian Hannasch said on Wednesday.
For Couche-Tard, which dispenses fuel at about 10,800 outlets across several countries such as Canada and the United States, revenue from its fuel segment declined 29.7 per cent in the third quarter ended Jan. 31.
The slump dulled merchandise and service segment’s 5.6-per-cent jump in revenue from a sustained strong demand for grocery, alcohol and tobacco products during the pandemic.
Hexo Corp. (HEXO-T) declined after it reported a loss of $20.8-million in its latest quarter as its revenue nearly doubled compared with a year earlier.
The cannabis company says its loss amounted to 17 cents per diluted share for the quarter ended Jan. 31.
The result compared with a loss of $298.2-million or $4.52 per diluted share a year earlier when the company took large one-time charges related to its goodwill and intangible assets.
Net revenue in what was Hexo’s second quarter totalled nearly $32.9-million, up from $17-million in the same quarter a year earlier.
Last month, Hexo announced a deal to buy competitor Zenabis Global Inc. in $235-million deal that will give the cannabis company a European foothold and strengthen its domestic business.
Hexo CEO and co-founder Sebastien St-Louis says the Zenabis deal will help speed domestic and international growth.
Green Thumb Industries Inc. (GTII-CN) reversed course and finished lower after posting better-than-anticipated fourth-quarter financial results after the bell on Wednesday.
The Chicago-based cannabis company reported revenue of US$177-million, up 134 per cent year-over-year and exceeding the Street’s forecast of US$167-million. Gross margin improved by 3.17 per cent to 56.7 per cent, also topping expectations.
In a research note, BTIG analyst Camilo Lyon said: “As we look at the drivers of continued growth both near and long term, not only do we see an improving federal/legislative backdrop (Safe to Say SAFE is Coming Soon), but we also see continued positive momentum in GTII’s key markets (IL, PA, NV) that should be bolstered by forthcoming stimulus checks and increased travel (especially for the Las Vegas market), newly legalized markets (NJ) where GTII just opened its 2nd store, and soon to be legalized markets (NY with CT/PA likely thereafter). What’s more, as NJ and(and NY we expect too) begins adult use sales in earnest over the next 3-4 quarters (for now we model NY sales in ’22 of $74-million), we would expect gross margins to stay healthy in the mid-50′s range (and potentially migrate up) as greater scale efficiencies are realized on its cultivation assets that are not at full capacity (NJ) or have not yet been completed (NY). Taken together, we see GTII executing at a consistently high level as it expands its share position in its key markets (IL and PA) today while also investing in many robust future growth opportunities (NJ, NY, CT, and PA).”
Canopy Growth Corp. (WEED-T) was flat after announcing it has raised a US$750-million senior secured term loan in agreement with King Street Capital Management L.P. It also has the ability to obtain up to an additional US$500-million of incremental senior secured debt.
Centerra Gold Inc. (CG-T) fell after saying it believes tax claims by the Kyrgyz Republic State Tax Service are exaggerated or without merit.
The gold miner says its Kyrgyz Republic subsidiary, Kumtor Gold Co., has received more than US$100-million in tax claims from the state tax service.
The claims include US$106-million related to withholding taxes on dividends paid to Centerra in 2016 and 2017 and a claim for US$17 million related to payroll deductions not withheld in 2016 and 2017.
Centerra says the claims were initially raised by the state tax service in 2018, but were withdrawn or terminated.
The Canadian gold miner says the state tax service has now annulled its previous decision in order to revive such claims.
The state tax service has also made a claim against KGC for US$23-million in relation to payments to the Kyrgyz Republic Social Fund for 2011 through 2017.
Toronto-based Largo Resources Ltd. (LGO-T) slid after announcing its board has approved the construction of a new ilmenite concentration plant at its Maracás Menchen Mine in Brazil.
Commercial production from the new plant is expected early in 2023 and cost US$25.2-million with the majority of costs being incurred in 2022. Its capacity is expected to be approximately 150,000 tons of ilmenite concentrate per annum.
Dollar General Corp. (DG-N) forecast annual same-store sales and profit below estimates on Thursday, indicating the roll out of vaccines and a reopening economy would lead to a bigger-than-expected slowdown from a pandemic-fueled rush for lower-priced groceries.
The company’s shares, which have gained nearly 22 per cent over the last year, fell on Thursday.
Discount stores like Dollar General have been among the bigger retail beneficiaries of the COVID-19 health crisis, as Americans, facing higher unemployment rates and lower household income, looked for more affordable products to stock up their pantries.
However, the roll out of vaccines and the promise of a return to relative normalcy will have led analysts to expect sales to taper, especially in the second half of this year after new stimulus money has dried up.
The company said it expects full-year same-store sales to fall 4 per cent to 6 per cent, compared with analysts’ estimate of a 1.2% decline, according to IBES data from Refinitiv.
Dollar General forecast annual earnings per share of US$8.80 to US$9.50, below estimates of US$10.08.
Eldorado Gold Corp. (ELD-T) was lower after Greek lawmakers approved a revised contract with the miner on Wednesday, opening the way for restarting a major mining investment stalled for years over licensing and environmental concerns.
The Vancouver-based company has been embroiled for years in a standoff with Greece over environmental concerns around its Skouries, Olympias and Stratoni projects in northern Greece, known as the Kassandra mines.
The previous leftist Syriza government revoked permits and delayed licensing for Eldorado’s mining operations, prompting the company to halt part of its investment plan and seek several hundred million euros in compensation for lost revenue.
The two parties resorted to arbitration but failed to settle their differences.
The conservative government of Prime Minister Kyriakos Mitsotakis soon reopened talks with the company after taking power in 2019. It views the project as a vital investment for a country still struggling with the aftermath of a decade-long financial crisis.
Last month, Greece signed an amended agreement with Eldorado, including a bigger investment plan of $3.1-billion for the mines, creation of additional jobs and higher royalties.
Shares of Vine Energy Inc. (VEI-N) fell in their market debut on Thursday, after the Blackstone-backed natural gas explorer failed to impress investors in what was the first initial public offering by a U.S. shale producer since 2017.
The lackluster debut underscores a lack of investor optimism towards the shale industry, despite oil and natural gas prices rebounding from last year, when they crashed due to the COVID-19 pandemic.
Vine Energy’s stock opened at US$13.75 per share, giving the company a valuation of US$952.7-million.
The stock’s opening trade is a rare departure from the trend of eye-popping stock market debuts as the U.S. capital markets enjoy a record run. Tech heavyweights Coupang Inc. (CPNG-N), Roblox Corp. (RBLX-N) and Airbnb (ABNB-Q) all surged in their market debuts.
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With files from staff and wires
David Leeder