A roundup of some of the North American equities making moves in both directions today
On the rise
Uber Technologies Inc. (UBER-N) jumped 2.4 per cent following a Bloomberg report that it has made an offer to acquire food-delivery startup Grubhub Inc. (GRUB-N).
The two companies are currently in talks about a deal and could reach an agreement as soon as this month, the report said, citing people familiar with the matter.
Ride-hailing company Uber said it does not comment on rumors and speculations, while GrubHub did not immediately respond to a request for comment.
Shares of Grubhub jumped over 29 per cent.
Bombardier Inc. (BBD.B-T) was 2.3 per cent higher after Alstom Chairman and Chief Executive Henri Poupart-Lafarge said it plans to stick to the terms of its previously-agreed rail deal.
In February, the French TGV high-speed train maker Alstom agreed to buy the rail division of Bombardier for up to 6.2 billion euros ($6.7-billion) in a cash-and-shares deal aimed at creating the world’s No. 2 train manufacturer and a challenger to Chinese leader CRRC Corp.
Alstom added on Tuesday that it hoped to close its deal with Bombardier, which is subject to regulatory clearance, in the first half of 2021.
See also: Inside Bombardier’s decision to sell its rail business to France’s Alstom
TransAlta Corp. (TA-T) was up 0.2 per cent after earning a profit of $27-million in its latest quarter compared with a loss a year ago, helped by strong earnings from its U.S. coal operations and its wind and solar business.
The power generator says it has modified its operating procedures and restricted non-essential access to its facilities due to the COVID-19 pandemic, but they all remain fully operational.
TransAlta’s profit amounted to 10 cents per diluted share for the quarter ended March 31 compared with a loss of $65 million or 23 cents per diluted share a year ago.
Revenue totalled $606 million for the quarter compared with $648 million in the first three months of 2019.
The company says it started construction on its Windrise wind farm in April and expects the project to be fully commissioned for second half of 2021 due to a delay in the manufacturing of turbines from one of its suppliers due to COVID-19 pandemic.
See also: From coal to renewable energy: Inside CEO Dawn Farrell’s ambitious plan to transform TransAlta
Caesars Entertainment Corp. (CZR-Q) jumped 3 per cent despite misseing quarterly revenue estimates on Monday as it shuttered its casinos amid nationwide lockdowns to contain the spread of the COVID-19 pandemic.
The gambling industry, which counts on air travel and large groups of people in close proximity, is one of the hardest hit from the restrictions imposed to check the health crisis.
“Our first-quarter performance reflects the significant revenue declines we experienced as a result of the closures and stable year-over-year labor costs in March,” Chief Executive Officer Tony Rodio said in a statement.
He said the company was taking aggressive steps to strengthen its financial position, which included furloughing 90 per cent of its employees in North America.
Caesars said almost all its casinos worldwide have been closed since March 17 and warned of an estimated daily cash burn of US$9.3-million. As of March 31, it had more than US$2.6-billion in liquidity.
SunTrust analyst Barry Jonas said investor focus is squarely on Caesars’ current cash burn rate and the phased property reopening strategy.
On the decline
Restaurant Brands International Inc. (QSR-T) was down 0.5 per cent after Tim Hortons China said Tuesday it received an investment from Chinese tech giant Tencent, as the Canadian coffee brewer seeks to expand in the Chinese market.
Tim Hortons said in a statement on its Weibo it will use the funds to upgrade digital infrastructure and open more stores in China. The company said it would expand store numbers in China from 50 now to 1,500.
Fried chicken chain Popeyes, owned by Restaurant Brands, is forging ahead with the opening of its first outlet in China despite the coronavirus outbreak and plans to set up “a few more” by the end of the year in several Chinese cities, its executives said on Tuesday.
The Cajun-inspired fast food company, which said last year it planned to open 1,500 restaurants in China over the next decade, open its first outlet in the financial hub of Shanghai on Friday.
“It will have a temporary effect,” Korhan Kurdoglu, vice chairman of restaurant operator TFI Tab Foods Investments (TFI), said of the coronavirus, which has infected 4.2 million people worldwide after emerging in China last year.
TFI is the partner of Popeye’s owner Restaurant Brands International Inc’s in China.
U.S.-listed shares of B.C.-based cannabis firm Tilray Inc. (TLRY-Q) were down 7.6 per cent after the company reported a wider first-quarter loss after it cut jobs and restructured.
The Nanaimo, B.C.,-based company said its net loss for the period ended March 31 amounted to US$184.1-million or US$1.73 per share, compared with a loss of US$29.4-million or 31 US cents per share in the same quarter last year. The results were released after Monday’s close.
Tilray says the increase in net loss from a year ago was caused by severance costs from the layoffs, changes in the fair value of warrant liabilities connected to the company’s offering of common stock and warrants, and increased operating expenses related to growth initiatives. Tilray’s revenue rose by 126.2 per cent from the first quarter of last year to reach US$52.1-million.
Hyatt Hotels Corp. (H-N) slid almost 6 per cent after saying late Monday it would lay off 1,300 people globally as it tries to cope with the coronavirus crisis, which has virtually halted global travel by keeping people indoors.
Hyatt said it had also cut pay for senior management, board members and all employees in corporate offices as part of a restructuring, adding that the staff who were being laid off would be eligible for severance pay.
“Due to the historic drop in travel demand and the expected slow pace of recovery, Hyatt has made the extremely difficult decision to implement layoffs and restructure roles across its global corporate functions, beginning June 1, 2020,” Hyatt said in a statement.
The company declined to break down the job cuts by region.
Resolute Forest Products Inc. (RFP-T) sat down 6.5 per cent as it reported a loss of US$1-million in its latest quarter compared with a profit of US$42-million in the same quarter last year as its revenue fell.
Chief executive Yves Laflamme says the first-quarter results reflect a resurgence in prices for lumber that began late in 2019 together with lower maintenance costs in pulp and paper, offset by lower newsprint prices.
Resolute says the loss amounted to a penny per share for the quarter ended March 31 compared with a profit of 45 US cents per share a year earlier.
Sales totalled US$689-million, down from US$795-million.
Excluding special items, Resolute reported a loss of US$29-million or 33 US cents per share, compared with a profit of US$30-million or 32 US cents per diluted share in the first quarter of 2019.
Analysts on average had expected an adjusted loss of 36 US cents per share and US$715 million in revenue, according to financial markets data firm Refinitiv.
Hertz Global Holdings Inc. (HTZ-N) fell 5.5 per cent after it raised going concern doubts as the car rental company tries to cut costs and avoid debt default amid a blow to its business due to the COVID-19 pandemic.
The company had a total debt of US$18.75-billion as of March 31 and had last week said its lenders had extended the deadline for certain loan repayments to May 22, giving it more time to chalk out a financing plan to avoid bankruptcy.
The Estero, Florida-based company, whose largest shareholder is billionaire investor Carl Icahn with 38.94-per-cent stake as of March 11, said it was in talks with key stakeholders and advisors to develop a financing strategy.
Hertz said on Monday it expects US$2.5-billion in annualized savings from cost-cutting measures it took such as layoffs and sale of excess fleet before the shut down of the used-car market.
“We are doing absolutely everything we can to preserve liquidity,” Chief Executive Officer Kathryn Marinello said in the quarterly report.
BlackRock Inc. (BLK-N) dropped 7.9 per cent as its top shareholder PNC Financial Services Group Inc. planned to sell its entire 22-per-cent stake in the world’s largest asset manager.
PNC will sell its common and preferred shares in a secondary offering and BlackRock will repurchase US$1.1-billion in common shares, assuming the sale goes well.
The Pittsburgh-based lender currently owns about 35 million shares in the asset manager, which is valued at roughly US$17.3-billion, based on BlackRock’s last close on Monday, according to Reuters calculation. It also holds preferred shares.
The United States’ biggest mall owner Simon Property Group (SPG-N) was lower by 0.9 per cent after it reported a 20.2-per-cent decline in quarterly profit and scrapped it annual forecast on Monday as the mall operator was forced to temporarily close all its U.S. retail properties in March due to the COVID-19 pandemic.
Mall operators are set for a rough few months as lockdown measures to contain the spread of the coronavirus pushed many retail tenants to the brink of collapse.
Net income attributable to Simon’s shareholders fell to US$437.6-million, or US$1.43 per share, in the first quarter ended March 31, from US$548.5-million, or US$1.78 per share, a year earlier.
Funds from operations (FFO), a key metric for real estate investment trusts, fell to US$980.6-million, or US$2.78 per share, from US$1.08-billion, or US$3.04 per share, a year earlier.
Simon said it had reopened 77 retail properties in regions where the lockdown restrictions had eased.
Tesla Inc. (TSLA-Q) slid narrowly lower after Chief Executive Elon Musk on Monday said production was resuming at the automaker’s sole U.S. vehicle factory, in California, defying an order to stay closed and saying if anyone had to be arrested it should be him.
On Tuesday, U.S. President Donald Trump urged California to allow Tesla Inc to reopen its electric vehicle assembly plan.
Mr. Musk over the weekend threatened to leave California for Texas or Nevada over his factory’s closure. His move has highlighted the competition for jobs and ignited a rush to woo the billionaire executive by states that have reopened their economies more quickly in response to encouragement from Trump.
California Governor Gavin Newsom on Monday said he spoke to Mr. Musk several days ago and that the Tesla founder’s concerns helped prompt the state to begin its phased reopening of manufacturing last week.
Tesla, which also has a vehicle plant in Shanghai and is building another in Berlin, on Saturday sued the county, alleging it had violated California’s constitution by defying Newsom’s orders allowing manufacturers to reopen.
TMX Group Ltd. (X-T) was lower by 2.4 per cent after it reported its first-quarter profit and revenue grew compared with a year ago as stock trading surged in volatile markets caused by the COVID-19 pandemic.
The company, which operates the Toronto Stock Exchange, says it earned $70.1-million or $1.24 per diluted share for the quarter ended March 31, up from a profit of $61.2-million or $1.09 per diluted share a year ago.
Revenue totalled $220.3-million for the quarter compared with $197.5-million in the first quarter of 2019.
On an adjusted basis, TMX says it earned $1.53 per diluted share in its first quarter, up from $1.03 per diluted share in the same quarter last year.
Analysts on average had expected an adjusted profit of $1.56 per share and $214.2 million in revenue for the quarter, according financial markets data firm Refinitiv.
With files from Terry Weber, staff and wires
David Leeder