A roundup of some of the North American equities making moves in both directions today
On the rise
Zoom Video Communications Inc. (ZM-Q) raised its annual revenue forecast by more than 30 per cent after comfortably beating quarterly estimates on Monday as it converts more of its huge free user base to paid subscriptions.
Shares of Zoom, which have surged almost four-fold this year, jumped over 40 per cent. On Monday, they hit a record closing high of US$325.1.
Since the start of the pandemic, Zoom has worked to convert the mass of free users into paying customers, which is important because the company relies on both its own data centers and cloud providers such as Amazon.com and Oracle Corp to provide its serving, meaning it must bear costs for free users.
The company said revenue rose 355 per cent to US$663.5-million, topping analysts’ average estimate of US$500.5-million. The company’s gross profit rose to 71 per cent from 68 per cent, but remains far below the 80-per-cent range Zoom operated at before free users flocked to the service.
The company, founded and headed by former Cisco manager Eric Yuan, raised its annual revenue target for fiscal year 2021 to a range of US$2.37-billion to US$2.39-billion, from US$1.78-billion to US$1.80-billion previously.
Excluding items, the company earned 92 US cents per share, beating the average analyst estimate of 45 US cents, according to IBES data from Refinitiv.
Crescent Point Energy Corp. (CPG-T) was 0.9 per cent higher after it announced reactivation of economic volumes previously shut-in and provided revised 2020 guidance along with a preliminary outlook for 2021.
It said capital expenditures expected to be approximately $665-million in 2020, in-line with the lower end of the prior range.
It also said its preliminary 2021 outlook is to sustain or exceed second half 2020 production “with continued excess cash flow generation.”
Crescent Point said it anticipates being able to generate annual average production in 2021 that is in-line with, or exceeds, its estimated second half 2020 production while spending approximately $500-million to $550-million in development capital.
The company said it continues to work through its plans for 2021 and expects to formalize its annual guidance early in the new year.
In a research note, ATB Capital Markets analyst Patrick O’Rourke said: “Overall, we view the event as neutral to positive, with the Company now formalizing the previously suggested resumption of production. While the increased guidance is generally being driven by pricing and volumes that previously existed and not necessarily by asset outperformance, it will certainly push up both production and cash flow estimates which is positive, along with modestly better than anticipated capital spend guidance. The first look at 2021 guidance is informal at this time, but certainly conveys a strategy that focuses on FCF generation and debt reduction at the expense of top line production growth, a theme that is common across industry at this time.”
Vancouver-based Well Health Technologies Corp. (WELL-T) rose 28 per cent in the wake of announcing it has a deal to buy a majority stake in Circle Medical Ltd., a U.S. telehealth provider for US$14-million.
Well also announced a $23-million offering with a group of investors led by Hong Kong business leader Mr. Li Ka-shing. The company said the group has bought about 4.8 million shares for $4.77 each. The stock closed at $4.83 on Monday.
The proceeds are expected to be primarily used to fund and support the transaction as well as general working capital, the company said.
Walmart Inc. (WMT-N) sat up 6.3 per cent after unveiling the perks of its new membership program, Walmart Plus, which will grant subscribers unlimited free delivery, fuel discounts and no checkout lines.
Touted as a rival to Amazon.com Inc’s Prime subscription, Walmart’s new loyalty program will cost $98 a year or $12.95 a month. It will become available to all U.S.-based customers on Sept. 15.
Amazon Prime, which offers U.S. shoppers fast shipping, streaming video and other services, costs US$119 a year or US$12.99 a month.
“We are a company committed to meeting our customers’ needs,” said Janey Whiteside, chief customer officer at Walmart. “We’ve designed this program as the ultimate life hack for them.”
The service aims to both attract new customers and turn existing ones into even more loyal shoppers, Ms. Whiteside said.
Eastman Kodak Co. (KODK-N) jumped 22.1 per cent after D.E. Shaw reported a 5.2-per-cent stake in a regulatory filing.
The hedge fund said it has bought 3.94 million shares, and they aren’t being held for the purpose of changing or influencing control of company.
On the decline
The sales agents include major banks such as Goldman Sachs & Co, Bank of America Securities Inc, Citigroup Global Markets Inc and Morgan Stanley & Co, the electric carmaker said in a filing.
The move comes a day after a 5-for-1 stock split took effect, Tesla’s first since its initial public offering about a decade ago.
The company’s high-flying stock has soared over 70 per cent since its split was announced on Aug. 11, and was trading at over US$2,000 on Friday on a split-adjusted basis. The stock was one of the costliest on Wall Street.
Barrick Gold Corp. (ABX-T) lost 0.8 per cent despite saying on Tuesday it has lost a court challenge in Papua New Guinea over rights to a highlands gold mine and intends to appeal to the country’s Supreme Court, prolonging a dispute that has halted output as gold prices soar.
Papua New Guinea refused to extend Barrick’s lease over the remote Porgera mine in April, and this week the National Court dismissed Barrick’s request for a review of that decision.
“The company disagrees with numerous grounds outlined in the ruling,” the miner said on Tuesday in a statement issued by Barrick Niugini Ltd, which operated Porgera as a joint-venture between Barrick and China’s Zijin Mining Group.
Barrick Niugini “intends to urgently appeal the ruling to the Supreme Court,” the statement said. It was not clear whether any appeal had yet been filed.
The dispute over the lease has stopped production at Porgera, which last year turned out nearly 600,000 ounces of gold. It comes at a time when investor nerves over the COVID-19 crisis has sent the gold price to a record high.
Schlumberger (SLB-N) was down 1.4 per cent after it said on Tuesday it would merge its North America fracking business with Liberty Oilfield Services Inc. (LBRT-N) for a 37-per-cent stake in the new company as oilfield service activities remain crippled due to weak oil demand.
Shares of Liberty were up over 36 per cent.
Oil producers have slashed spending on drilling and fracking wells as the coronavirus pandemic hurt energy consumption.
Schlumberger, which reported a second straight quarterly loss in July, had said that North American revenue fell to US$1.18-billion in the second quarter, less than half of what it was a year earlier, with only slightly better conditions expected in the current quarter.
Liberty’s revenue slumped about 84 per cent to US$88.4-million in the second quarter and it posted a net loss of US$445.7-million, compared with a profit of US$22-million a year earlier.
The combined company would have a market capitalization of US$1.2-billion, the companies said in a joint statement, adding 2019 combined revenue would have been US$5.2-billion.
With files from Brenda Bouw, staff and wires