A roundup of some of the North American equities making moves in both directions today
On the rise
Franco-Nevada Corp. (FNV-T) rose 2.4 per cent on Tuesday after releasing third-quarter results after the bell on Monday that exceeded expectations on the Street.
Industrial Alliance Securities analyst George Topping said: “Franco delivered a strong Q3 led by contributions from Cobre and Marcellus. We expect FNV to surpass the high end of its guidance for the year and deliver upwards of 15% GEO growth next year as Cobre continues its ramp up. We continue to recommend FNV as the go-to option for generalists and/or those looking to hedge their portfolio with a quality, dividend paying, safe gold equity. Even with the gold price dropping (down p4 per cent or $50 per ounce) over the past week, FNV shares have stayed flat.”
Tyson Foods Inc. (TSN-N) gained 7.4 per cent despite falling short of Wall Street estimates for quarterly sales and profit as a fire at one of its slaughterhouses hit volumes in its beef business, the company’s biggest segment.
The maker of Ball Park hotdogs and Jimmy Dean sausages has gained nearly 55 per cent this year. Excluding items, the company earned US$1.21 per share, compared with the average analyst estimate of US$1.29, according to IBES data from Refinitiv.
Walt Disney Co. (DIS-N) shares were up 1.4 per cent with the highly anticipated launch of its new streaming service.
It said demand for Disney+, was well above its expectations in a launch on Tuesday marred by complaints from users about glitches and connection problems.
Disney+ is relying on its extensive library of movies and TV shows as well as a new slate of content to take on market leader Netflix Inc and Apple TV+, Apple Inc’s newly launched streaming service.
On the decline
Hudbay Minerals Inc. (HBM-T) plummeted 8.5 per cent after reporting third-quarter results late Monday that fell largely in-line with expectations on the Street.
Citing growth concerns, an equity analyst at Scotia Capital downgraded Hudbay shares on Tuesday.
Elsewhere, RBC Dominion Securities’ Sam Crittenden said: “We expect a neutral reaction to Q3 results, with operational and financial results largely as expected. Hudbay reiterated guidance although it noted that Manitoba unit cost guidance could be at or slightly above the prior range. Next catalysts could include announcing a new CEO (Peter Kukielski remains interim CEO), advancing growth initiatives in Manitoba, and obtaining surface rights for the higher-grade Pampacancha deposit in Peru.”
The Toronto-based cannabis company reported an adjusted core loss of $23.9-million, in the third quarter ended Sept. 30, up from $3.20-million in the year earlier. Revenue rose to $12.70-million from $3.76-million.
Ensign Energy Services Inc. (ESI-T) fell 14.2 per cent after it reported a loss per share in the third quarter of 24 cents, up from a a loss in the year-earlier quarter of 21 cents.
The Calgary-based company also cut its dividend by 50 per cent from the prior quarter to 6 cents a share and said it will discontinue its dividend reinvestment plan.
Raymond James analyst Andrew Bradford said: "The miss by itself will challenge ESI’s stock this morning. The 50-per-cent dividend cut is another matter entirely... On one hand, the market had been effectively pricing a dividend cut for some time now - last night’s yield was 17.9 per cent; and the now-lowered dividend (6-cent quarterly) still provides a 9-per-cent yield. On the other hand, this is Ensign’s first dividend cut in its 32-year history; its unblemished dividend record had been a differentiating feature for the stock. And the dividend cut was voluntary - that is, no covenants were pressing on ESI. Even with our cut to our forward EBITDA estimates, ESI’s covenants would have remained onside. Ensign also discontinued its DRIP. Participation in the DRIP was around 40 per cent - that is, ESI was only ‘paying’ 60 per cent of its $78-million annual dividend obligation in cash. The remaining 40 per cent was being paid in stock. Cutting the dividend by 50 per cent and discontinuing a 40-per-cent DRIP will only save ESI $8-million annually. The reason for the cut was clearly to eliminate dilution.
“Under some circumstances, dividend cuts can move stocks higher. However, we’re not sure this is one of those circumstances. The cut wasn’t necessary, it preserves only a small amount for Ensign’s balance sheet, and the macro headwinds for North American drillers seemingly trump all manner of financial tinkering we’ve seen to date.”
After the bell on Monday, the company said lower fourth-quarter net revenue (compared to third-quarter net revenue of approximately $24.8-million) and about $1.6-million of packaging and inventory adjustments (charged to cost of sales) in the quarter are expected to contribute to negative adjusted EBITDA in the quarter.
In response, an equity analyst at BMO Nesbitt Burns downgraded its stock.
Tammy Chen said: "We previously considered the company to be a relatively stronger operator. We now believe Organigram is also experiencing the challenges that have impacted some of its peers.”
CBS Corp. (CBS-N) lost 3.6 per cent after missing Wall Street estimates for quarterly revenue.
The media company reported a net earnings of US$319-million, or 85 US cents per share, in the third quarter ended Sept. 30, down from US$488-million or US$1.29 per share, a year earlier. The owner of popular television channels such as Nickelodeon and MTV posted a 1-per-cent rise in revenue to US$3.30-billion, but missed analysts’ average estimate of US$3.36-billion, according to IBES data from Refinitiv.
With files from Terry Weber, Brenda Bouw staff and wires