A roundup of some of the North American equities that made moves in both directions
On the rise
Air Canada (AC-T) was up almost 14.5 per cent after announcing late Friday plans to lay off at least 20,000 employees as the COVID-19 pandemic continues to wreak havoc on the airline industry.
Effective June 7, the layoffs will impact more than half of the company's 38,000 employees, it said.
The move comes amid continuing border shutdowns and confinement measures that have tanked travel demand, prompting Air Canada to ground some 225 airplanes and slash flight capacity by 95 per cent.
Southwest Airlines Co. (LUV-N) increased 2.4 per cent after it said on Tuesday it recorded positive bookings on a net basis so far this month as passenger reservations outpaced trip cancellations, helping the company slow its cash burn rate.
Airlines have been the among the worst hit by the coronavirus crisis, which brought travel to a virtual standstill around the world.
Southwest said although it continues to estimate its average daily core cash spending to be in range of US$30-million to US$35-million in the second quarter, June daily cash burn rate would slow to low-$20 million range.
“The company has also recently experienced a modest improvement in passenger demand and bookings in June 2020,” Southwest said in a regulatory filing.
The U.S. carrier said it expects June capacity to fall between 45 per cent and 55 per cent from with a year ago, compared with a decline of 60 per cent to 70 per cent in May capacity.
IPL Plastics Inc. (IPLP-T) jumped almost 27 per cent after it issued a statement on Monday saying that it’s “aware of media speculation regarding potential transactions that could involve the company,” but that its policy is to not comment on market speculation.
On Sunday, a report surfaced that three private equity firms have made bids for the company.
“Furthermore, there is no additional material market update at this time as our recently issued Q1 2020 results, which were released and filed on May 13, 2020, included all relevant and necessary disclosures at this time,” it stated.
Under the new proposal, Silvercorp will offer 25 cents in cash and 0.1849 of a Silvercorp common share for total consideration of $1.30 per share. That compares with the previous offer of 60 cents in cash or 0.1195 of a Silvercorp common share.
Shares of Silvercorp slid over 7.5 per cent.
On the decline
Walmart Inc. (WMT-N) beat Wall Street expectations with its quarterly revenue and earnings on Tuesday and reported record U.S. online sales as stockpiling drove consumers to its stores and website during the coronavirus pandemic.
However, its shares fell 2.2 per cent.
The world’s largest brick-and-mortar retailer, like many other essential businesses, has seen a surge in demand late in March and early in April as “shelter-in-place” orders made consumers stock up on staples while limiting their trips to the grocers.
However, the company pulled its forecast for the full-year due to the uncertainty to its business caused by the pandemic. Walmart’s online business, which rose 74 per cent in the first-quarter, benefited from the retailer’s investments in store pick-up and delivery services. It said the strength of its own online operation made it decide to discontinue Jet.com, the online start-up it acquired in 2016 for US$3.3-billion.
The business was undergoing an overhaul last year by integrating its retail, technology, marketing, analytics and product teams with Walmart’s own online business.
The company added that grocery pickup and delivery for food and other consumables reached record sales volumes and also saw high demand for electronics, toys and sporting goods in the quarter.
Overall, sales at U.S. stores open at least a year rose 10 per cent, excluding fuel, in the first quarter ended April 30. Analysts had expected a gain of 8.8 per cent, according to IBES data from Refinitiv.
Delta Air Lines Inc. (DAL-N) increased 0.3 per cent after revealing it will keep planes no more than 60 per cent full through at least July, adding more flights to its schedule than demand would usually justify, people familiar with the matter said.
The move is part of a longer-term bet that CEO Ed Bastian highlighted to investors last month: that consumers’ perceptions of safety will be instrumental in reviving more routine travel, and that they will be willing to pay a premium for comfort.
Specific details could still change, the people said on condition of anonymity, citing the uncertain timing of a recovery from the coronavirus crisis that has decimated air travel demand.
Delta has publicly said that it will limit first class seating capacity at 50 per cent and main cabin at 60 per cent through June 30, and earlier announced that it was resuming some flights next month.
U.S. electric vehicle maker Tesla Inc. (TSLA-Q) dipped 0.7 per cent despite suffering a slump of 64 per cent in car registrations in China in April on the month, data from auto consultancy LMC Automotive showed.
Tesla’s China registrations, including imported cars, fell to 4,633 units, from 12,709 in March. Its sales are usually lower in the first month of each quarter than in the remaining two.
Data from China Passenger Car Association shows sales of Tesla’s Shanghai-made Model 3 sedan hit 3,635 units last month.
Tesla expects to make 4,000 units a week in June and start mass production of Model Y sport utility vehicles in the first quarter next year, its vice president, Tao Lin, told the official Xinhua news agency in an interview.
Home Depot Inc. (HD-N) missed estimates for quarterly profit on Tuesday, as the home improvement chain spent about US$850-million on benefits for employees keeping its stores and warehouses running through the COVID-19 pandemic.
Shares of Home Depot, which have gained 12.4 per cent this year, dropped nearly 3 per cent, as the company also scrapped its full-year outlook, citing uncertainties stemming from the pandemic.
Home Depot, which is heavily reliant on a solid housing market to drive sales, is at risk of a potential drop in home improvement spending this year as lockdown measures to control the spread of the novel coronavirus batter the economy.
Still, shelter-in-place restrictions and government stimulus checks had an initial benefit on Home Depot’s sales as people spent more on tools for do-it-yourself house projects, such as small repairs, painting and gardening.
The company also saw a surge in demand for cleaning supplies, but was forced to cut operating hours and limit the number of customers allowed in stores to maintain social distancing.
The company’s net earnings fell 10.7 per cent to US$2.25-billion, or US$2.08 per share, in the first quarter ended May 3, while analysts had expected earnings of US$2.27 per share, according to IBES data from Refinitiv.
Total net sales rose to 7.1 per cent to US$28.26-billion, beating estimates of US$27.54-billion. Same-store sales rose 6.4 per cent.
Following a share price jump of 20 per cent on Monday, Moderna Inc. (MRNA-Q) slipped 10.4 per cent in the wake of launching a US$1.34-billion share offering at an offer price of US$76 per share after the bell
The company had earlier said it plans to sell US$1.25-billion in common stock to raise money for vaccine development and manufacturing.
Its experimental COVID-19 vaccine, the first to be tested in the United States, produced protective antibodies in a small group of healthy volunteers, according to very early data released by the biotech company on Monday.
Overall, the study showed the vaccine was safe and all study participants produced antibodies against the virus.
An analysis of the response in the eight individuals showed that those who received a 100 microgram dose and people who received a 25 microgram dose had levels of protective antibodies to fend of the virus that exceeded those found in the blood of people who recovered from COVID-19, the illness caused by the coronavirus.
Newmont Corp. (NGT-T) was lower by 1.5 per cent after it said on Tuesday it expects costs to rise in 2020 as some of its operations are in care-and-maintenance mode, and the miner also cut its spending budget for the year due to reduction in non-essential activities.
The company now expects 2020 consolidated gold all-in sustaining costs to be US$1,015 per ounce compared with its earlier expectations of US$975 per ounce.
Newmont expects total 2020 capital expenditure at about US$1.3-billion.
Chesswood Group Ltd. (CHW-T) lost 10.4 per cent after saying it is temporarily suspending its monthly dividend as part of its plan to resume funding new business in the U.S. as closure restrictions due to the pandemic begin to lift.
The commercial equipment finance company says the decision was part of a move to also draw on its revolving credit facility as its customers’ businesses reopen.
The suspension of the dividend follows a reduction of its regular payment to shareholders in April to 3.5 cents per share from seven cents due to the pandemic.
Chesswood says it has granted payment deferrals and other accommodations to some of its customers, however the requests have decreased over the last few weeks. It says its focus will now turn to working with customers to return them to their regular payment schedules.
Chesswood says its operating subsidiaries have implemented several cost-cutting measures including staffing reductions, a temporary 20 per cent reduction in management compensation and temporary stop in payments of director compensation.
Kohl’s Corp. (KSS-N) slid 7.7 per cent despite reporting a surge in online sales in its coronavirus-hit first quarter on Tuesday and said it had reopened nearly half its stores as lockdowns eased across the United States.
Kohl’s was forced to close all its U.S. stores to curb the spread of the virus, hammering sales and sending shares in the retailer some 63 per cent lower so far this year.
But the company said that online sales rose 24 per cent overall in the quarter and more than 60 per cent in April, dwarfing earlier growth as the chain limited operations to its app and website.
“We have begun the rebuilding process, recently reopening about 50 per cent of our stores across the country,” Michelle Gass, chief executive officer, said.
The company, which owns over 1,100 stores in the United States, had earlier withdrawn its full-year forecast, suspended share buyback plan and borrowed money to combat the pandemic’s impact. At the end of the quarter, the company had $2 billion in cash at hand.
Kohl’s said net sales fell to US$2.16-billion from US$3.82-billion a year earlier.
For the quarter ended May 2, the company reported net loss of US$541-million, or US$3.50 per share, compared with a profit of US$62-million, or 38 US cents per share, a year earlier.
With files from staff and wires