A roundup of some of the North American equities making moves in both directions today
On the rise
Centerra Gold Inc. (CG-T) was higher on Tuesday after saying its wholly owned subsidiaries that own and operate the Kumtor Mine have filed for Chapter 11 bankruptcy protection in the U.S. in a move to protect its interests after the government of the Kyrgyz Republic seized the mine in the central Asian country.
The Toronto-based miner says the Kumtor Gold Co. and Kumtor Operating Co. started the filing in the Southern District of New York.
The court-supervised process provides for a worldwide stay of all claims against the companies.
The Kyrgyz Republic issued a statement last month that it took control of the Kumtor mine because of what it said was the “abdication of its fundamental duties of care” by Centerra.
The Canadian miner has said the seizure was unjustified and initiated binding arbitration against the government.
Centerra also says it is conducting a strategic review related to its ownership of KGC and KOC in light of the recent events involving the Kumtor mine.
CGI Inc. (GIB.A-T) rose after announcing before the bell it has extend its long-term partnership with Shell, signing a new five-year contract valued at more than $200-million.
The Montreal-based firm will help Shell to grow its Fleet Solutions business, by continuing its work to modernize its end-to-end mobility management and fuel payments platform .
California-based data analytics firm Cloudera Inc. (CLDR-N) jumped after private-equity firms KKR & Co. (KKR-N) and Clayton Dubilier & Rice LLC agreed to take the firm private in a US$5.3-billion dollar deal.
Cloudera, which provides cloud-based software and platform to enterprises, including financial firms and government agencies, counts Carl Icahn as its largest shareholder. The activist investor holds about 17.8 per cent of Cloudera’s total shares, according to Refinitiv data.
With an uptick in demand since the COVID-19 pandemic last year, major cloud services providers including Amazon.com Inc , Alphabet Inc’s Google and Microsoft Corp have been pushing to provide products similar to ones offered by Cloudera.
Bloomberg Law reported in June last year that Cloudera had been exploring a sale after getting takeover interest.
Cloudera, which also posted first-quarter results on Tuesday, canceled its earnings call scheduled on June 2 following the take-private offer. The company’s quarterly revenue rose 7 per cent to US$224.3-million and net loss per share narrowed to 14 US cents.
The deal, expected to close in the second half of this year, includes a 30-day “go-shop” period, which allows the company to consider alternative offers, Cloudera said.
ExxonMobil Corp. (XOM-N) rose after saying it would proceed with an US$8-billion development of Brazil’s Bacalhau oil discovery along with Equinor and Petrogal Brasil.
First oil from the field, which will be operated by Norway’s Equinor, is expected in 2024, with output set to reach 220,000 barrels per day, the companies said in a joint statement.
“Estimated recoverable reserves for the first phase are more than one billion barrels of oil,” said Equinor Executive Vice President Arne Sigve Nylund.
The field has a break even cost of below US$35 per barrel, Equinor said, around half the current market price of crude oil.
Equinor and Exxon each hold a 40-per-cent stake in Bacalhau, while Petrogal Brasil holds 20 per cent. Brazilian government company Pre-sal Petroleo SA (PPSA) is also a partner via a so-called production sharing agreement, ensuring public involvement in the project.
Coinbase Global Inc. (COIN-Q) rose after launching a tie-up with Apple and Alphabet Inc’s Google on Tuesday that will allow users to add cards from their accounts to the payment apps run by the two tech giants.
The Coinbase card added to the wallets can be used to spend digital currencies, the biggest U.S. cryptocurrency exchange said in a blog post.
On the decline
Pembina Pipeline Corp. (PPL-T) was lower after it said on Tuesday it would buy rival Inter Pipeline Ltd (IPL-T) in an all-stock deal, valuing it at about $8.3-billion to create one of Canada’s top energy infrastructure companies.
The deal comes nearly four months after Inter Pipeline launched a strategic review as it fended off a $7.1-billion hostile takeover from investment firm Brookfield Infrastructure Partners.
Pembina’s offer of $19.45 per share represents a 10.8-per-cent premium to Inter Pipeline’s Monday close.
The companies said they expect near-term cost savings due to the deal of $150-million to $200-million annually.
Bank of Nova Scotia (BNS-T) slipped on Tuesday after it reported a higher second-quarter profit boosted by lower loan loss provisions and improving returns from its Canadian banking division.
For the three months that ended April 30, Scotiabank earned $2.46-billion in profit, or $1.88 per share, compared with $1.32-billion, or $1 per share, in the same quarter last year.
Adjusted to exclude some items, Scotiabank said it earned $1.90 per share. On average, analysts expected earnings per share of $1.77, according to Refinitiv.
Revenue fell 3 per cent to $7.74-billon, as the bank’s lending margins decreased by 9 basis points year over year. (100 basis points equal one percentage point).
As with other major Canadian banks that reported earnings last week, Scotiabank benefitted from a continuing drop in provisions for credit losses - the funds set aside to cover loans that may default. The bank recorded $496-million in provisions, compared with $1.85-billion in the same quarter last year.
- James Bradshaw
See also: Falling loan loss provisions fuel rising profits for big banks
Canopy Growth Corp. (WEED-T) was lower after reporting a smaller adjusted loss for the fourth quarter on Tuesday as the pot producer benefited from cost-cutting measures and a pandemic-driven jump in demand for weed products.
The company, which sells a range of products from dried flowers to gummies, chocolates and drinks mixed with weed, slashed total operating expenses by 73 per cent in the quarter.
Its revenue surged 38 per cent to $148.4-million thanks to a rise in demand from customers using weed products for recreation and entertainment during lockdowns.
But the revenue figure missed a Refinitiv IBES estimate of $151.8-million, hit by weakness in its international cannabis business that suffered from coronavirus-induced store closures.
The company is “a little concerned” that the restrictions, especially in Canada, will continue to impact its current-quarter performance, Chief Executive Officer David Klein told Reuters in an interview.
But Mr. Klein expects the situation to gradually improve, saying the company should be able to post quarter-over-quarter improvement in profitability throughout its fiscal year 2022.
Canopy also said it was on track to deliver savings of $150-million to $200-million within the next 18 months.
Mr. Klein said the company’s cost reduction had been “mostly implemented.”
See also: Hexo to become Canada’s top recreational cannabis seller with $925-million deal to buy Redecan
Abbott Laboratories (ABT-N) dropped after it cut its full-year 2021 profit forecast due to a projected drop in COVID-19 diagnostic testing demand.
“This has been driven by several factors, including significant reductions in cases in the U.S. and other major developed countries, accelerated rollout of COVID-19 vaccines globally and, most recently, U.S. health authority guidance on testing for fully vaccinated individuals,” the drugmaker said.
Abbott generated billions in sales for its COVID-19 tests last year, but analysts have cautioned that demand is likely to fall this year.
The company now expects full-year adjusted profit from continuing operations of US$4.30 to US$4.50 per share. It had forecast at least $5 per share in January. Analysts expect US$5.04 per share, according to Refinitiv data.
Abbott sees second-quarter adjusted profit from continuing operations of at least US$1 per share, compared with analysts’ estimates of US$1.23 per share.
With files from staff and wires