A roundup of some of the North American equities making moves in both directions today
On the rise
Oracle Corp. (ORCL-N) was up 2.2 per cent amid reports it has held preliminary talks with TikTok’s Chinese owner, ByteDance, and was seriously considering buying the app’s operations in the United States, Canada, Australia and New Zealand.
Oracle was working with some U.S. investors that already have a stake in ByteDance, including General Atlantic and Sequoia Capital, the Financial Times reported, citing people briefed about the matter.
ByteDance and TikTok did not have a comment on the FT report, while Oracle declined to comment.
Reuters reported earlier this month that Twitter Inc had approached ByteDance to express interest in acquiring the U.S. operations of TikTok, while Microsoft Corp was still the favorite to clinch a deal.
The Financial Times said on Monday Microsoft has also seriously considered a bid to take over TikTok’s global operations beyond the nations it outlined earlier in August.
Microsoft is particularly interested in buying TikTok in Europe and India, where it was recently banned by the Indian government after border tensions with China, the newspaper said.
Kirkland Lake Gold Ltd. (KL-T) was up 1.6 per cent after announcing it has have entered into a strategic alliance agreement with Newmont Corp. (NGT-T) to explore development opportunities around its Holt Complex and Newmont’s properties in Timmins, Ont.
Under terms of the agreement, Newmont will pay Kirkland Lake Gold US$75-million to acquire an option on certain mining and mineral rights related to the Holt Mine property.
They said the agreement also includes a “commitment by the two companies to work together to identify additional regional exploration opportunities around their respective land positions in the region where they may be able to cooperate in the future to advance projects and create value for both companies.”
Newmont shares were 1.3 per cent lower.
Ivanhoe Mines Ltd. (IVN-T) added 0.2 per cent in the wake of announcing a deal on Tuesday with China Nonferrous Metal Mining (Group) Co. Ltd (CNMC) under which the companies would jointly look for African mining projects to explore, develop or acquire.
Ivanhoe’s co-chairmen Robert Friedland and Yufeng Sun said the strategic partnership would also see the companies, both active in Democratic Republic of Congo, exploring production, smelting, and logistics opportunities.
Friedland hinted at possible mergers arising from the agreement with CNMC, saying the partnership would begin by “examining the synergies between the operations currently owned by our two companies.”
CNMC Chairman Wang Tongzhou said: “I strongly believe that cooperation is the best way to achieving the goals of both companies.”
Ivanhoe has previously said it is in talks with companies over its Kipushi and Western Forelands projects in the Congo, and its Platreef project in South Africa.
On the decline
“Based on an extensive forensic analysis and holistic review of GFL’s accounting practices, financial controls and reporting, and corporate governance, Spruce Point believes that without access to new capital, the Company’s shares are worthless and likely uninvestable for institutional investors,” it said.
“GFL’s executives have not only fostered what appears to be an extremely aggressive and opaque business model, but they have either deliberately concealed, or inattentively omitted, past failures and questionable business connections.”
Walmart Inc. (WMT-N) posted its biggest-ever growth in online sales on Tuesday as shoppers cashed in stimulus checks and ordered everything from electronics and toys to groceries from the safety of their homes amid the COVID-19 pandemic.
The near-doubling of online sales in the second quarter helped the retailer trounce Wall Street expectations for quarterly profit and same-store sales.
The results showed that the unprecedented spike in demand seen by big-box retailers at the peak of the coronavirus lockdowns has remained strong even as restrictions ease, with shoppers using their stimulus checks to shop for discretionary items like sneakers and clothes. This also helped Walmart reduce the number of markdowns or discounts.
However, as stimulus funds tapered off, sales at Walmart returned to normal, recording only a 4-per-cent rise in comparable sales in July. Shares of the company were down 0.7 per cent.
“The health crisis has created ... both tailwinds and headwinds to our business,” said Chief Financial Officer Brett Biggs on a call with investors. “In Q2, we saw stronger-than-expected sales due in large part to stock-up buying and stimulus spending, but the duration and extent of future government stimulus remains uncertain.”
Walmart executives also said the back-to-school season has been “choppy,” as more school districts rolled back their reopening plans to curb the spread of coronavirus and shoppers had little-to-no need for backpacks and uniforms.
Home Depot Inc. (HD-N) reported it biggest rise in quarterly same-store sales in at least two decades on Tuesday as demand for paint, tools and other home improvement products surged from consumers stuck indoors due to the COVID-19 pandemic.
Shares of the Dow component fell 1.1 per cent after the company said its same-store sales jumped 23.4 per cent in the second quarter, surging past analysts’ average estimate of a 10.5-per-cent rise.
Home Depot and smaller rival Lowe’s Cos Inc have been among a handful of corporate winners since the start of the pandemic, as more people took up do-it-yourself projects such as painting and gardening while at home.
The U.S. housing market’s stronger performance compared with the broader economy has also given people more impetus to remodel their homes, driving demand for home improvement tools and items.
“The massive shifts in spending that we are seeing will remain fairly similar for the foreseeable future until we have a reliable healthcare solution for COVID-19,” RBC capital Markets analyst Scott Ciccarelli wrote in a note to clients.
However, Mr. Ciccarelli warned investors that Home Depot’s current pace of sales growth would be difficult to top next year.
Net income rose 24.5 per cent to US$4.33-billion, or US$4.02 per share, in the quarter ended Aug. 2, despite the company spending US$480-million in additional benefits to compensate employees required to work in stores and warehouses amid the health crisis.
Analysts had expected a profit of US$3.71 per share, according to IBES data from Refinitiv.
Shares of Lowe’s (LOW-N), which reports second-quarter results on Wednesday, were down 0.3 per cent.
Kohl’s Corp. (KSS-N) signaled a slow start to the current quarter on Tuesday, as the department store chain discounts heavily and grapples with weak demand as fewer schools reopen due to the COVID-19 pandemic, sending its shares down nearly 15 per cent.
Kohl’s executives also said they would take a conservative approach to the second half of 2020, as the company prepares for further markdowns and discounts ahead of the all-important holiday season.
“Back-to-school season has been impacted by the crisis as families navigate how their kids will return to school this year,” Chief Executive Officer Michelle Gass said on the earnings call.
Retail giant Walmart Inc also said back-to-school season has been “choppy,” as more school districts rolled back their reopening plans.
U.S. department stores, which had been struggling to boost sales even before the pandemic, have had to sell products at lower prices and invest in their online businesses to keep pace with online-centric, off-price, and deeper-pocketed big-box retailers.
Cruise operator Carnival Corp. (CCL-N) lost 1.8 per cent despite saying late Monday it has launched an investigation into a ransomware attack on one of its brand’s information technology systems.
Carnival, which operates AIDA, Carnival and Princess cruises among others, in a regulatory filing said the attack included unauthorized access to personal data of guests and employees.
The company did not identify the brand that was affected and declined to provide more details, as the investigation process was at an early stage.
The attack adds to the woes of the company that has been already struggling with suspension of its cruises for months due to the COVID-19 pandemic amid travel restrictions across the world.
Boeing Co. (BA-N) dipped 1 per cent after it said late Monday it would offer employees a voluntary layoff package with pay and benefits for the second time this year, as the planemaker battles a coronavirus-induced slowdown in global air travel.
It will be offered to employees in the commercial airplanes and services businesses as well as corporate functions, Chief Executive Officer Dave Calhoun wrote in a note to employees, a copy of which was seen by Reuters.
“Unfortunately, layoffs are a hard but necessary step to align to our new reality, preserve liquidity and position ourselves for the eventual return to growth,” Mr. Calhoun said in the note.
“We anticipate seeing a significantly smaller marketplace over the next three years.”
The health crisis, which has hammered planemakers, airlines and suppliers, has added to the woes of Boeing that has been grappling with a production freeze and year-long grounding of the 737 MAX following two fatal crashes.
The company doesn’t have a set target at this time and was encouraging all eligible employees interested in the voluntary layoff package to apply, Boeing said in a statement.
With files from staff and wires