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A roundup of some of the North American equities making moves in both directions today

On the rise

TC Energy Corp. (TRP-T) was up and Pembina Pipeline Corp. (PPL-T) fell following a premarket announcement of a plan to develop a carbon transportation and sequestration system in Alberta.

The companies say the project will form the backbone of Alberta’s carbon capture utilization and storage industry.

It will be capable of transporting more than 20 million tonnes of carbon dioxide annually.

Pembina and TC Energy plan to retrofit existing pipelines as well as build new systems to connect the province’s largest sources of industrial emissions to a sequestration location northeast of Redwater, Alta.

They say that by using existing assets it speeds up timing of the project, reduces environmental and community impacts and is cheaper.

Pembina and TC Energy hope to have the first phase to be operational as early as 2025.

Lennar Corp. (LEN-N), currently the No. 2 U.S. homebuilder, was higher after it beat quarterly profit, helped by higher prices due to a tight supply.

The COVID-19 pandemic fueled demand for spacious and more expensive homes as millions of Americans work from home and take classes remotely.

But the health crisis has hurt the homebuilders’ ability to ramp up construction due to labor supply disruptions as well as shortage of lumber and other raw materials. This has pushed up prices as buyers scramble to get hold of available inventory.

Lennar’s homebuilding gross margin rose by 450 basis points to 26.1 per cent in the three months ended May 31, a record for the second quarter, helped by higher-than-expected sales price per home.

It also raised its average sales price forecast by 5 per cent to US$420,000, while reaffirming its outlook for annual deliveries of between 62,000 homes and 64,000 homes.

However, higher prices amid supply shortage stoked fears of home purchases becoming less affordable and hampering a recovery in sales.

U.S. new home sales dropped 5.9 per cent to a seasonally adjusted annual rate of 863,000 units in April.

U.S. grocery store operator Kroger Co. (KR-N) saw gains after it raised its forecast for annual profit and posted a smaller-than-expected decline in quarterly same-store sales that signaled a gradual easing in demand for grocery from levels seen at the height of the pandemic.

The supermarket chain forecast adjusted profit per share between US$2.95 and US$3.10 in 2021, versus its prior range of US$2.75 to US$2.95. Analysts on average were expecting earnings of US$2.86 per share.

The grocer has bolstered its business through its “Restock Kroger” program and its partnership with UK-based Ocado Group Plc to use robots to more quickly stock, sort and dispatch goods. It has also tied-up with third parties such as Instacart Inc to handle deliveries.

Same-store sales, excluding fuel, fell 4.1 per cent in the first quarter ended May 22, compared with estimates of a 6.7-per-cent decline, according to IBES data from Refinitiv.

Kroger said it expects 2021 adjusted same-store sales to fall between 2.5 per cent and 4 per cent, while it had earlier projected a decline between 3 per cent and 5 per cent. Analysts on average expect same-store sales to decline 4.38 per cent, according to IBES data from Refinitiv.

On the decline

Suncor Energy Inc. (SU-T) slid after announcing late Wednesday it has reached an agreement in principle to increase its minority ownership of the Terra Nova offshore oilfield.

The Calgary-based company says its stake in the Newfoundland and Labrador facility will increase to 48 per cent from about 38 per cent as part of a restructuring of ownership.

“Although this agreement in principle is not a guarantee, it sets a path forward in the next few months to secure a return to operations for many years to come,” company president and chief executive officer Mark Little said in the release.

By Suncor’s estimates, there are still 80 million barrels of oil left in the Terra Nova field.

Details about the other partners, including which companies might be selling their stakes and for how much, weren’t immediately available.

The agreement must still be approved and finalized, and is contingent upon the Newfoundland and Labrador government coming through with its promise of more than $500-million in cash and royalty adjustments, the release said.

The Terra Nova oilfield is one of four offshore oil installations in the province and sits about 350 kilometres southeast of St. John’s. It hasn’t produced oil since December 2019.

Aimia Inc. (AIM-T) slipped after announcing approval of a normal course issuer bid to purchase for cancellation up to 7,349 million of its common shares, or 10 per cent of the public float as at June 8.

“Aimia believes that the market price of its common shares may, from time to time, not reflect the inherent value of the company, and that repurchases of common shares pursuant to the NCIB may represent an appropriate and desirable use of the company’s funds. Therefore, Aimia believes that it is in its best interest to proceed with this NCIB, while maintaining sufficient financial flexibility to execute on the company’s future strategic direction and capital allocation priorities,” it said.

Ford Motor Co. (F-N) reversed early gains in the wake of saying on Thursday that an improvement in its automotive business will help the company post second-quarter adjusted operating earnings above its own expectations.

Adjusted earnings before interest and taxes will also be significantly better than a year earlier, the company said, despite the continuing semiconductor crunch that has made automakers forecast billions in losses.

Lower-than-anticipated costs and favorable market factors drove an improvement in the automotive business.

Net income for the quarter is expected to be significantly lower, as the prior year included a US$3.5-billion gain on investment in self-driving startup Argo AI, the automaker said.

U.S.-listed shares of German biotech CureVac NV (CVAC-Q) plummeted after it said on Wednesday after the bell its COVID-19 vaccine was only 47 per cent effective in a late-stage trial, missing the study’s main goal and throwing in doubt the potential delivery of hundreds of millions of doses to the European Union.

The disappointing efficacy of the shot known as CVnCoV emerged from an interim analysis based on 134 COVID-19 cases in the study with about 40,000 volunteers in Europe and Latin America.

The stakes for CureVac and prospective buyers of its vaccine in Europe had risen after age limits were imposed on the use of the Johnson & Johnson and AstraZeneca vaccines due to a link to extremely rare but potentially fatal clotting disorders.

CureVac’s shot was also expected to help in low and middle-income countries that have lagged far behind richer nations in the global immunization drive.

As CureVac’s only major supply deals, the European Union in November secured up to 405 million doses of the vaccine, of which 180 million are optional. That was followed by a memorandum of understanding with Germany for another 20 million doses.

Lordstown Motors (RIDE-Q), which recently raised concerns about its ability to remain in business, slid after saying on Thursday it did not have any binding purchase orders or commitments from customers.

The U-turn comes after President Rich Schmidt on Tuesday said at an Automotive Press Association event in Detroit the company had firm and binding orders for the first two years of production of its electric pickup truck.

“Although these vehicle purchase agreements provide us with a significant indicator of demand for the Endurance, these agreements do not represent binding purchase orders or other firm purchase commitments,” the company said in a filing with the U.S. securities regulator.

On Monday, just days after the company said it may not have enough money to stay in business over the next year, Chief Executive Steve Burns and Chief Financial Officer Julio Rodriguez resigned.

The resignations followed the company’s reports of conclusions from an internal investigation into claims made by short-seller Hindenburg. Hindenburg, which took a short position on Lordstown shares in March, alleged that the company had misled consumers and investors.

Although, Lordstown declined Hindenburg’s accusations of overstating the viability of its technology and misleading investors about production plans, it has acknowledged that it overstated the quality of pre-orders for its electric truck.

With files from staff and wires

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