A roundup of some of the North American equities making moves in both directions today
On the rise
The US$2-billion factory started delivering cars in just 357 days, a record for global automakers in China. The first 10 customers from the public received their China-made Model 3 sedans on Tuesday.
Houston-based Apache Corp. (APA-N) increased 26.8 per cent after announcing with French multinational Total S.A. that they’ve made a major oil discovery offshore Suriname with the closely watched Maka-Central 1 well.
Apache’s exploration offshore Suriname has been on the radar as it is just over the border from an Exxon Mobil-led consortium’s giant fields off Guyana, which are estimated to hold more than 6 billion barrels of oil.
The Make-Central 1 well confirmed a geologic model with 73 metres (240 feet) of oil pay and 50 metres (164 feet) of light oil and gas condensate pay, and more appraisal planning was underway, Apache said in a statement.
The independent U.S. oil producer’s agreement with Total SA for joint development offshore Suriname included a $100 million payment at the outset, and additional pay for expenses recorded in the exploration.
“This appears to be a significant discovery and should be viewed very positively,” RBC Capital Markets analyst Scott Hanold said.
That’s up from 7.5 million tonnes a year earlier and 100,000 tonnes more than Canadian National Railway’s shipment record in the fourth quarter of 2018.
Shares of Canadian National Railway Co. (CNR-T) was up 0.02 per cent after saying it moved 7.5 million tonnes over the last three months. That included an all-time monthly record of 2.79 million tonnes in October and the second best December on record despite a work stoppage.
“After considering the potential benefits and disadvantages of the re‑domiciliation, the board of directors has determined that a re‑domicile to Canada best serves the company’s interest,” it stated.
In a research note released Tuesday, Laurentian Bank Securities analyst Jacques Wortman said: “We see no impact on the value of CIA shares as a result of this announcement.”
Goldman Sachs Group Inc. (GS-N) was up 0.7 per cent after the Wall Street bank said on Tuesday it has overhauled its main business units ahead of its quarterly results next week, as it seeks to provide investors with greater transparency into its financial performance.
The latest changes are part of a broader strategic overhaul under Chief Executive Officer David Solomon, who is looking to build a bigger consumer business to shield revenue from wild swings in financial markets that have pressured its trading arm.
The bank said it would report its future earnings, starting with the latest December quarter, under the newly named units - investment banking, global markets, asset management and consumer & wealth management.
Goldman renamed its institutional client services business as global markets, while investment management will now be called asset management. The bank is also doing away with its investing and lending unit, it said in a regulatory filing.
It added a new consumer and wealth management segment that includes management and other fees related to managing assets, providing investing and wealth advisory services.
“To date in 2020, Precision has redeemed $32-million of its 2021 senior notes and reaffirms its 2020 targeted debt reduction range of $100-million to $150-million, which includes the remaining balance of the 2021 senior notes,” the company stated.
On the decline
Bank of Nova Scotia (BNS-T) slid 0.9 per cent after saying late Monday it will record an after-tax gain of $175-million in its fiscal first-quarter results, driven by the sale of a large part of its stake in a bank in Thailand, but offset by a series of one-time charges.
Scotiabank preannounced four items that will affect its results for the quarter that ends Jan. 31, which will be reported on Feb. 25. The bank made the disclosure one day before chief executive officer Brian Porter is scheduled to discuss the bank’s outlook at a conference on Tuesday hosted by Royal Bank of Canada.
Scotiabank expects an additional $410-million in after-tax revenue for the period from a deal to reduce its 49-per-cent stake in Thanachart Bank Public Company Ltd., a Thailand-based lender, which was announced last August. But some of that gain will be offset by charges as Scotiabank makes more conservative allowances for credit losses, reforms the way it values certain derivatives and writes down the value of a piece of software that will soon be discontinued.
- James Bradshaw
Canaccord Genuity analyst John Bereznicki said: “We believe this program should allow Total to continue to reduce its leverage through 2020 and look for a further capital update in the May time frame.”
HLS Therapeutics Inc. (HLS-T) slide 4.5 per cent on the heels of announcing that its Vascepa product was added to Health Canada’s Register of Innovative Drugs and, as a result, will benefit from data protection for eight years.
“We are pleased to announce this development and remain on track for a mid-February 2020 launch for Vascepa,” HLS CEO Greg said in a release. “Having taken into consideration all aspects of the granted indication for Vascepa, we now believe that peak year sales for the product in Canada could reach CAD$200-300 million per year, up from our previous estimate of CAD$150-250 million per year.”
Pier 1 Imports Inc. (PIR-N) plummeted over 6 per cent in the wake of a late Monday announcement that it plans to close up to 450 stores, cut jobs and warned about its ability to continue as a going concern
Pier 1 has drafted a bankruptcy plan and made a presentation to creditors last month, with a plan to create a smaller post-bankruptcy company with about US$900-million in annual sales, a person familiar with the matter said on Monday.
Harvest Health & Recreation Inc. (HARV-C) dipped 9.4 per cent after it announced it has filed a suit against Falcon International, Inc. “requesting termination and rescission of the merger agreement and return of money Harvest paid to Falcon under the merger agreement.”
The complaint was filed in U.S. Federal Court, District of Arizona. “Harvest alleges that Falcon has failed to meet its legal obligations in multiple ways, including the failure to provide auditable financial records, which precludes Harvest from moving forward with the transaction,” the company stated in a release.
American Airlines Group Inc. (AAL-Q) was 0.4 per cent lower after it said it had reached a confidential agreement with Boeing Co. (BA-N) to address damages the airline incurred in 2019 due to the ongoing grounding of its fleet of Boeing 737 MAX aircraft.
American, the largest U.S. airline, said the compensation will be received over several years. The airline will use more than US$30-million of the compensation for the airline’s 2019 employee profit-sharing program.
Shares of Boeing were up 1 per cent.
With files from Terry Weber, Brenda Bouw and wires