A roundup of some of the North American equities making moves in both directions today
On the rise
T-Mobile US Inc. (TMUS-Q) was almost 12 per cent after a U.S. federal judge on Tuesday approved its merger with Sprint Corp. (S-N), rejecting a claim by a group of states that said the deal would violate antitrust laws and raise prices.
During a two-week trial in December, T-Mobile and Sprint argued the merger will better equip the new company to compete with top players Verizon Communications Inc and AT&T Inc , creating a more efficient company with low prices and faster internet speeds.
The states, led by California and New York, had said the deal would reduce competition, leading to higher prices.
The decision by U.S. District Court Judge Victor Marrero clears the path for the deal, which already has federal approval and was originally valued at US$26-billion.
Shares of Sprint jumped 77.3 per cent.
Medical device maker Neovasc Inc. (NVCN-T) was 13.5 per cent higher after announcing it has retained Joshua Mitts, a professor at Columbia University specializing in securities trading, to investigate “unusual” trading activity in its shares.
The Richmond, B.C.-based company said it believes there may have been “illegal market manipulation including possible shorting and distorting” of its shares.
Occidental Petroleum Corp. (OXY-N) rose 1.7 per cent after saying on Tuesday it expects to record about US$1.7-billion in impairment and other charges in the fourth quarter, related to the sale of its stake in gas pipeline operator Western Midstream Partners LP and costs from its Anadarko Petroleum purchase.
The oil and gas producer said in early January that it would cut its majority stake in pipeline operator Western Midstream to less than 50 per cent in 2020, as it seeks to reduce its debt that ballooned with the Anadarko deal.
Occidental also said last month that it had started laying off workers in a new cost-cutting move after having already dismissed staff “significantly” through voluntary programs.
The company has been selling assets and cutting costs since it outbid Chevron Corp. for Anadarko, quadrupling its debt to US$40-billion.
Aecon Group Inc. (ARE-T) was up 2.2 per cent after it announced that Fraser Crossing Partners, a joint venture with the company and Acciona, has reached financial close on the Pattullo Bridge Replacement Project in B.C.
The total contract is valued at $967.5-million, the company stated.
“This award adds another signature bridge project to Aecon’s strong backlog, further diversifying our presence in Western Canada and underscoring our preeminent reputation as a partner-of-choice for delivering critical infrastructure projects nationwide,” stated Aecon CEO Jean-Louis Servranckx.
AutoNation Inc. (AN-N) rose 6.4 per cent on Tuesday reported a 70-per-cent rise in quarterly profit, as higher demand for used vehicles helped the largest U.S. auto dealership chain offset a decline in new-vehicle sales.
The quarter also included a gain of 43 US cents per share related to property divestitures and a non-cash benefit related to an investment.
The company’s profits have been hurt as new-vehicle sales weakened after a long bull run since the end of the 2007 to 2009 economic crisis.
Chief Executive Cheryl Miller told Reuters low interest rates and a strong job market should sustain combined new and used vehicle sales at about 57 million vehicles in 2020, flat with last year.
AutoNation cut its inventories by 11,000 vehicles from a year ago, and expects to hold capital spending for 2020 to a similar level as the US$257-million spent in 2019, Miller said. AutoNation invested US$393-million in capital spending in 2018.
On the decline
TFI International Inc. (TFII-T) was down 0.9 per cent after releasing in-line fourth-quarter financial results after the bell on Monday and announcing an initial public offering in the United States with plans to list its common shares on the New York Stock Exchange (NYSE).
In a research note, Echelon Wealth Partners analyst Gianlucca Tucci said: “The North American freight environment has generally improved in recent years, which has led to a normalisation in freight rates and betterment in volumes, with management continuing to focus on improving the network efficiency in the US. We remind investors that TFII’s US TL presence via its US$558-million 2016 acquisition of XPO Logistics’ TL division makes it a serious player in that market – we expect the Company to continue to deliver quality revenue as these results prove. While moderate overcapacity faced by the industry in recent quarters has shown signs of abating, any additional economic weakness could further pressure pricing.”
TMX Group Ltd. (X-T), owner of the Toronto Stock Exchange, slid 2.9 per cent after it reported net income of $47.5-million or 84 cents in the most recent quarter, down from $69.8-million or $1.24 a year earlier.
Excluding items, TMX reported earnings per share of $1.31, ahead of the $1.25 markets had been expecting. Revenue fell 4 per cent to $202.8-million but still topped analysts’ forecasts of $198.2-million. The results were released after the close of trading on Monday.
Centerra Gold Inc. (CG-T) lost 0.1 per cent with declining gold prices despite announcing its annual gold production exceeded the upper end of its 2019 guidance.
“In 2019, the Company exceeded its consolidated gold production guidance, delivering more than 783,000 ounces of gold," said president and CEO Scott Perry. "Given our actual gold production, our all-in sustaining costs per ounce sold is expected to be below the lower end of our 2019 guidance range.”
“For 2020, we are estimating consolidated gold production to be in the range of 740,000 to 820,000 ounces and 80 million to 90 million pounds of payable copper production from Mount Milligan. This reflects the addition of Ã?ksut gold production as it ramps up during the year. Centerra’s consolidated all-in sustaining cost on a by-product basis per ounce sold for 2020 is expected to be in the range of $820 to $870 per ounce.”
Shares of Under Armour Inc. (UAA-N) plunged 19.2 per cent after the company said it anticipates a big financial hit from the viral outbreak in China and saying separately that it may need to restructure this year at a cost of hundreds of millions of dollars.
The athletic gear company anticipates the virus outbreak in China will drag first-quarter sales down by US$50-million to US$60-million. It’s also looking at pre-tax charges this year of between US$325-million to US$425-million related to restructuring. The company said Tuesday that it may scuttle the opening of its flagship store in New York City.
The Baltimore company swung to a loss of US$15.3-million in the final quarter of 2019, or 3 US cents per share. Its adjusted profit was 10 US cents per share, meeting the expectations of analysts polled by Zacks Investment Research. But its revenue of US$1.44-billion was just short of Wall Street projections.
Under Armour Inc. expects fiscal full-year revenue to be down at a low single-digit per cent compared to a year ago. Earnings are forecast between 10 US cents and 13 US cents per share.
Hasbro Inc. (HAS-Q) slid 0.9 per cent after it beat holiday-quarter profit estimates on Tuesday, boosted by lower costs and demand for toys based on Disney’s Frozen and Star Wars franchises.
The Rise of Skywalker, the final installment in the over four-decade old Star Wars saga, has grossed over US$1-billion worldwide since its December release and was a boon for Hasbro, which has the license to make toys based on the franchise’s droids, stormtroopers and lightsabers.
Revenue from Hasbro’s partner brands unit, which includes sales of toys based on the Star Wars and Frozen movies, rose nearly 50 per cent to US$408.5-million in the fourth quarter.
Hasbro’s costs fell to 40.4 per cent of its total revenue from 43.3 per cent a year earlier, helped by an about 30-per-cent cut in advertising spending.
Boeing Co. (BA-N) dipped 0.1 per cent despite booking no new orders for airplanes last month, the first time it has come up empty-handed in January since 1962, as the U.S. planemaker’s once best-selling jet, the 737 MAX, remained grounded following two fatal crashes.
The airplane maker, struggling with a crisis that dates back to the second of the two crashes last March, also said it delivered just 13 planes to customers last month. A year ago, it sealed 45 orders after cancellations in January and delivered 46 planes.
Most airline customers are avoiding placing fresh orders for the 737 MAX until the aircraft is cleared by regulators to fly again, leaving Boeing trailing European rival Airbus SE and swallowing huge monthly financial losses.
The Paris-based planemaker last week posted its biggest January order haul in at least 15 years, as it booked gross orders for 296 aircraft, or 274 net orders after cancellations.
With files from Terry Weber, Brenda Bouw, staff and wires
David Leeder