A roundup of some of the North American equities making moves in both directions today
On the rise
Canadian Tire Corp Ltd. (CTC.A-T) jumped after it blew past analysts’ estimates for first-quarter profit, as pandemic-weary people bought more bikes, patio furniture and pool supplies online to stay entertained during the COVID-19 pandemic.
E-commerce has been booming since the outbreak of the pandemic, despite accelerated vaccination efforts, as people are still wary of walking crowded store aisles and prefer ordering everything from furniture to food supplies online.
The company’s online sales more than tripled in the quarter ended April 3.
The online surge compensated for a slowdown in store sales earlier this year following a resurgence of coronavirus cases that had triggered a fresh round of lockdowns and strict distancing recommendations, including limited store capacity and sale of non-essential items.
The retailer has been investing more in e-commerce in recent months, sending personalized promotions to about 10 million members of its loyalty program and ramping up its in-store pickup and curbside delivery programs.
The Toronto-based retail chain’s revenue rose 16.7 per cent to $3.32- billion from a year earlier, and beat analysts’ average estimate of $2.92-billion, according to Refinitiv IBES data.
The automotive, home and sporting goods retailer posted a net income of $186.4-million, or $2.47 per share, compared with an income of $12.2-million, or a loss of 22 cents per share, a year earlier.
Excluding items, Canadian Tire earned $2.57 per share, compared with a Refinitiv IBES estimate of 62 cents per share.
Cargojet Inc. (CJT-T) was higher after Reuters reported it has threatened to move work to the United States unless it wins exemption from rules aimed at preventing pilot fatigue because of their cost.
The Mississauga-based company has said it wants to reduce costs and grow in the United States as Canada’s largest cargo carrier benefits from an increase in air freight demand due to a decline in “belly capacity” from passenger aircraft grounded during the pandemic.
Cargojet, which reported 30 per cent higher quarterly revenues this month, has hired more than 60 pilots in the past three to four months to meet stronger demand and comply with Canadian rules that went into effect in December. Those shorten the number of hours pilots can work at night and extend their rest periods, among other conditions.
But 65 per cent of Cargojet’s 283 pilots on Wednesday voted against supporting the company’s bid for an exemption from regulator Transport Canada, their union Unifor said by email. The company does not need union support for the exemption but hoped to have it.
Cargojet, which operates certain flights for Amazon, had offered to protect jobs as part of the deal. Cargojet Chief Executive Ajay Virmani told analysts this month he was seeking a U.S. investment or partner for its “growth strategy across the border.”
WSP Global Inc. (WSP-T) rose after reporting a big increase in net profits in the first quarter despite lower net revenues.
The Montreal-based engineering firm says its net earnings attributable to shareholders was $87.9-million or 77 cents per diluted share, up from $14.2-million or 13 cents per share a year earlier.
Excluding one-time costs, adjusted profits for the three months ended March 27 were $94.2-million or 83 cents per share, compared with $63.3-million or 60 cents per share in the first quarter of 2020.
The company says it pre-tax earnings increased mainly due to better productivity across the regions in which it operates, lower financing, acquisition and restructuring costs.
With two fewer billable days in the quarter, net revenues decreased four per cent to $1.67-billion from $1.74-billion a year earlier.
WSP was expected to post 60 cents per share in adjusted profits on $1.69-billion of revenues, according to financial data firm Refinitiv.
“Given our performance to date, our strong balance sheet, healthy backlog and proposal activity, we are optimistic that we will return to growth in Q2 and are reiterating our outlook,” stated CEO Alexandre L’Heureux.
“We believe this positions us favourably to achieve our 2019-2021 strategic ambitions notwithstanding these unprecedented times.”
Quebecor Inc. (QBR.B-T) was flat after it reported its first-quarter profit fell compared with a year ago as its revenue climbed higher, helped by gains in its telecommunications business.
The company says its net income attributable to shareholders totalled $121.3-million or 49 cents per share for the quarter ended March 31, down from a profit of $131.6-million or 52 cents per share a year ago.
Revenue for the quarter totalled $1.09-billion, up from nearly $1.06-billion in the first quarter last year.
The increase in revenue came as its telecommunications revenue rose to $914-million from $874.7-million a year ago.
Meanwhile, Quebecor’s media revenue held steady at $174.8-million, while sports and entertainment revenue fell to $31.2 million compared with $34.8-million in the same quarter last year.
The company says its adjusted income from continuing operating activities totalled 52 cents per share, up from 44 cents per share in the first quarter of 2020.
Home Capital Group Inc. (HCG-T) saw large gains in the wake of the release of strong quarterly results before the bell.
The Toronto-based lender reported normalized earnings per share of $1.25, well above the consensus forecast on the Street of $1.03 with net interest income and loan-loss provision recovery topping estimates.
On the decline
Canada Goose Holdings Inc. (GOOS-T) forecast annual revenue above $1-billion for the first time on Thursday, after surging online sales and strong Chinese demand helped the apparel maker post a surprise profit.
Shares of Canada Goose fell as global e-commerce revenue jumped 123.2 per cent, with the COVID-19 pandemic accelerating a shift to online shopping.
Direct-to-consumer sales in Mainland China also doubled from a year earlier.
China’s wealthy, who usually make the bulk of their purchases while traveling abroad, are shopping more online and in local stores as restrictions ease.
The luxury winterwear maker is doubling down on its investment plans in China and opening new stores to cater to affluent consumers, who cannot travel as freely as they used to during the health crisis.
Overall revenue rose about 48 per cent to $208.8-million in the fourth quarter ended March 28, beating analysts’ estimates of $164.8-million, according to IBES data from Refinitiv.
Excluding items, Canada Goose earned a surprise profit of 1 cent per share, while analysts on average were expecting a loss of 11 cents.
The company also expects total revenue to exceed $1-billion in fiscal 2022, with its high-margin, direct-to-consumer business making up nearly 70 per cent of it.
Aiming to boost profit margins, Canada Goose has sharpened focus on its consumer business since the onset of the pandemic.
Analysts expect revenue to soar 30.2 per cent to $1.12-billion.
Miner Turquoise Hill Resources Ltd. (TRQ-T) lost ground in the wake of beating estimates for first-quarter profit, helped by increased production of copper and gold at its Oyu Tolgoi mine in Mongolia and higher commodity prices.
However, the company cut its outlook for full-year gold and copper output to reflect modification of the mine design in Phase 4B and increased uncertainty resulting from COVID-19 related controls now in place at the site.
Oyu Tolgoi is one of the world’s largest copper-gold-silver mines. Rio Tinto owns 51 per cent of Turquoise Hill, which in turn owns 66 per cent of the Oyu mine. The rest of the mine is owned by government of Mongolia.
Turquoise’s first-quarter copper production rose 29 per cent to 45,449 tonnes and gold output increased by 461.5 per cent to 145,656 ounces at Oyu Tolgoi, from last year.
The company now sees full-year copper production between 150,000 tonnes and 180,000 tonnes, from its previous outlook of 160,000 tonnes to 180,000 tonnes.
It sees gold output for the full year between 400,000 ounces and 480,000 ounces, from previous outlook of 500,000 ounces to 550,000 ounces.
Turquoise’s March-quarter income attributable to owners of the company rose to US$236.7-million, or US$1.18 per share, from US$45.2-million, or 22 US cents per share, a year earlier.
Analysts on an average were expecting a profit of 70 US cents per share, according to Refinitiv IBES.
In a research note, RBC Dominion Securities analyst Sam Crittenden said: “We could see a negative reaction to TRQ shares on Q1/21 results that were mixed relative to expectations, while 2021 production guidance was revised down due to the previously disclosed pit wall slippage and COVID impacts. Taking new mine plans and revised commodity assumptions (as of March 31) into account, the funding gap was maintained at $2.3B. The focus remains on discussions with the government and the start of block caving operations, which is under pressure as it approaches the planned June start date.”
TransAlta Corp. (TA-T) was lower with the premarket release of first-quarter financial results that blew past expectations on the Street.
The Calgary-based power generator reported comparable EBITDA of $310-million, up 41 per cent year-over-year and topping the consensus projection of $302-million. Free cash flow rose to $129-million from $109-million a year ago.
“Overall, we view the print as neutral as the strong quarterly performance is offset by a cost overrun at Sundance 5 and the Kaybob Cogen project termination, ” said ATB Capital Markets analyst Nate Heywood. “The significant 41-per-cent increase in Comparable EBITDA year-over-year is attributable to the Company’s hydro and marketing segments. TA’s financial outperformance was largely driven by the changing Alberta market fundamentals, which drove Alberta spot power prices to $95/MWh, compared to spot prices of $67/MWh in Q1/20. The Company also announced a new energy supply agreement with one of its large industrial customers at the Sarnia Cogeneration facility.”
U.S. cannabis firm Green Thumb Industries Inc. (GTII-CN) fell after it posted an almost 90-per-cent jump in quarterly revenue late Wednesday that beat expectations, lifted by strong demand for its pot-infused products and higher traffic at its retail outlets.
The cannabis industry has enjoyed a surge in demand from customers staying at home during the pandemic. It is also benefiting from burgeoning investor interest as expectations rise that Democratic lawmakers will soon pass legislation granting the industry access to federal banking.
Green Thumb last week agreed to buy privately-owned Dharma Pharmaceuticals in Virginia, soon after the U.S. state legalized marijuana’s recreational use, expanding its footprint to 13 states.
“As the green wave continues to gain momentum, it is more important than ever to maintain our focus on strong execution and high-value capital allocation,” Chief Executive Officer Ben Kovler said in a statement.
Chicago-based Green Thumb’s revenue rose to US$194.4-million in the first quarter ended March 31, beating a Refinitiv IBES estimate of US$187.46-million, thanks to robust growth in its retail business in Illinois and Pennsylvania.
Net income attributable to the company was US$10.4-million, or 5 US cents per share, compared with a net loss of US$4.2-million, or 2 US cents per share, a year earlier.
China’s top e-commerce platform Alibaba Group Holding Ltd. (BABA-N) on Thursday reported its first quarterly operating loss since going public in 2014 due to a record anti-monopoly fine.
Its U.S.-listed shares fell, even as the company forecast 2022 revenue above market expectations, betting that the broader pandemic-driven shift to online shopping will remain resilient.
But the strong outlook was overshadowed by a regulatory crackdown that resulted in the suspension of a US$37-billion IPO of its affiliate Ant Group and a US$2.8-billion fine for anti-competitive business practices.
The fine by China’s markets regulator in April was the largest-ever of its kind.
Alibaba forecast annual revenue to be 930 billion yuan (US$144.12-billion) for the fiscal year ended March 2022, above analysts’ average estimate of 928.25 billion yuan.
It posted a net loss attributable to ordinary shareholders of 5.48 billion yuan, or 1.99 per American depository share (ADS), mainly due to the anti-monopoly fine.
Excluding items, Alibaba earned 10.32 yuan per ADS, below expectation of 11.11 yuan.
Mogo Inc. (MOGO-T) dropped with bitcoin prices after announcing that it intends to increase its ownership position in Coinsquare from 19.99 per cent to approximately 37 per cent through the acquisition of an additional 5.4 million common shares through a secondary transaction with an existing shareholder and by exercising a portion of its rights under the original investment agreement.
Mogo also holds a purchase warrant in Coinsquare that would increase its total ownership interest to approximately 48 per cent.
With files from staff and wires