A roundup of some of the North American equities making moves in both directions today
On the rise
In a technical report, the company said it plans to expand the sulfide ore processing facility at the Kansanshi mine by 25 million tonnes per annum (mtpa), which will boost annual throughout to 52 mtpa.
First Quantum expects to spend nearly $650 million for the expansion in about two years, starting in the second half of 2023. This expansion plan will continue to be further refined before project approval is sought, the company added.
Reuters had reported earlier in January that the Canadian miner was weighing an investment of around $1 billion to lift output at the Kansanshi copper mine, despite a feud with state miner ZCCM-IH over project funding.
The oil pipeline operator said the Alberta Energy Regulator approved the installation of a 400-meter bypass pipeline that enables the western portion of Polaris to transport diluent to customers north of Fort McMurray. The company detected a leak in its system late last month and reported a spill of 90 cubic meters (566 barrels) of light oil, 80 meters from a wetland and one kilometre from the Clearwater River.
Its outage caused Imperial Oil Ltd to shut all production at its 220,000 barrel-per-day (bpd) Kearl oil sands site.
Repair work on the pipeline, which supplies ultralight oil from Edmonton to oil sands sites, will continue, while the cause of the leak remains under investigation, Inter Pipeline said.
The Montreal-based company says the profit amounted to 12 cents per share for the quarter ended June 30 compared with a profit of 29 cents per share a year ago.
Aimia’s profit from continuing operations totalled $6.1 million or three cents per share for the quarter, down from $34.7-million or 22 cents per share in the same quarter a year ago.
Aimia has been working to reinvent itself since it sold its flagship Aeroplan program to Air Canada last year.
The Montreal-based company acquired a 10.85-per-cent stake in Clear Media Ltd., one of China’s largest outdoor advertising firms, earlier this year.
Loblaw Cos. Ltd. (L-T) was higher by 0.6 per cent on expanding its investment in the health care sector, spending $75-million for a minority stake in telemedicine provider Maple Corp., a Toronto startup that has seen demand for its online doctor services swell this year because of the coronavirus pandemic.
Loblaw has been investing in health care since it bought the Shoppers Drug Mart drugstore chain in 2014. Loblaw acquired QHR Corp., a software firm that provides electronic medical record-keeping for doctors, for about $170-million in 2016. Shoppers has experimented with offering services such as cosmetic dentistry and dermatology in some locations. Last month, it opened a medical clinic in Toronto and plans to expand the business.
As concerns over COVID-19 mounted in March, Shoppers partnered with Maple to make virtual consultations available through the retailer’s website. About a month ago, Shoppers launched a test in British Columbia, giving access to the Maple service on iPads in 160 stores. Customers have primarily used the service for conditions such as skin problems, allergies, and infections of the eye, throat and urinary tract.
- Susan Krashinsky Robertson and Sean Silcoff
“The additional capital spending will grow 2021 Montney production at Karr and Wapiti, with the acceleration enabling the company to continue to maximize capital efficiencies, drive down per unit operating costs and increase adjusted funds flow,” it stated.
Paramount said it now expects higher production in 2021 to drive adjusted funds flow “at recent strip pricing in excess of anticipated 2021 capital spending, reducing the company’s debt levels and strengthening leverage metrics.”
Paramount said it expects to finalize its 2021 capital budget in the first quarter of 2021.
In a research note, ATB Capital Markets analyst Patrick O’Rourke said: "Overall, we view the event as neutral to modestly positive. While some concerns may linger for investors surrounding Wapiti runtimes, we believe it is directionally positive to see the plant back online ahead of our prior (conservative) estimate, which modestly improves our 2020 production estimates (all of which is accountable to Q3/20). The pull forward of 2021 capex into H2/20 may seem aggressive at first blush, however given the demonstratable cost improvements at the 2-1 Karr pad and added security of increased hedging, it improves 2021 metrics in our modeling and allows POU to show some (if modest) FCF in 2021, where we believe investors have now firmly set their sights.”
Apple Inc. (AAPL-Q) gained 0.2 per cent after it introduced a cheaper version of its smartwatch, its latest attempt to broaden the appeal of its trend-setting products while many consumers are forced to scrimp during the coronavirus pandemic.
The scaled-down Apple Watch follows on the heels of a budget iPhone the company released five months ago as the economy cratered and unemployment rates rose above the levels reached during the Great Recession more than a decade ago.
Apple also took the wraps off a new high-end watch model, a next-generation iPad and a couple of new subscription services during a virtual event held Tuesday. The company normally also rolls out its new iPhones at this time of year, but production problems caused by the pandemic have delayed their release until at least October.
CEO Tim Cook didn’t mention iPhones during Tuesday’s one-hour presentation recorded at the company’s massive, but now mostly empty, headquarters in Cupertino, California.
Tesla Inc. (TSLA-Q) jumped 7.7 per cent, rising for the fifth day, as data from auto consultant LMC Automotive showed the electric-vehicle maker’s China car registrations rose month over month in August.
Kraft Heinz Co. (KHC-Q) rose 0.3 per cent after it said on Tuesday it is stepping up its marketing budget and planning an overhaul of its supply chain, hoping to save US$2-billion by 2024 and put a halt to years of weak sales and brand deterioration.
Packaged food companies like Kraft Heinz and Campbell Soup that market tinned food and salty snacks have for years faced a perception that their products are unhealthy. At the same time, the industry is battling aggressive competition from cheaper private label brands from Walmart and Kroger .
At its virtual investor day, Chicago-based Kraft Heinz said it plans to increase spending on marketing by 30 per cent to just over US$1.4-billion, a move many shareholders have hoped for since media and advertising veteran Miguel Patricio took over as CEO in July 2019. Shares of Kraft Heinz have risen 4.6 per cent since then.
“We are totally rethinking our operations in manufacturing logistics and procurement - it is absolutely critical because in the five next years, we are going to improve our operations big time,” Mr. Patricio told Reuters in an interview ahead of the presentation - his first major strategic update.
The company has begun streamlining its supply chain, Mr. Patricio said, and is trying to build better relationships with suppliers - many of whom have in the past been critical about Kraft Heinz’s culture under the management of cost-focused private equity firm 3G Capital.
On the decline
The offering consists of 1.1 million Class A subordinate voting shares, plus an overallotment option to purchase an additional 15 per cent. The note offering is valued at US$800-million.
Ag Growth International Inc. (AFN-T) was down over 9 per cent on the heels of the premarket announcement that a commercial grain storage bin manufactured by the Company and located at a customer’s export terminal in North Vancouver, BC, collapsed on Sept. 11.
The company said the cause of and any responsibility for the incident is not yet known, and it is not able to determine any costs it may incur related to the incident.
In a research note, RBC Dominion Securites analyst Andrew Wong said: "Depending on the cause of the failure, we think this could result in reputational harm, additional costs to AGI. We expect the news may weigh on AGI shares in the near term until more clarity is provided, as this incident follows the recent project re-engineering and additional work on two other projects in 2019 that resulted in $20-million of additional costs.
“However, we note that aside from these recent incidents, the company has not had any major operational issues and has demonstrated a strong track record of accountability and project execution across a large product portfolio. We also continue to expect a strong earnings rebound in 2021 due to significant crop volumes and a healthy international backlog.”
DLS, an Illinois-based business unit of R.R. Donnelley & Sons Co., provides logistics services through a third-party logistics network of internal sales personnel, commissioned sales agents, and approximately 140 agent-stations. DLS' primary transportation modes include less-than-truckload, truckload, freight forwarding, expedited, parcel and intermodal.
TFI expects the acquired operations to generate approximately US $22.5-million in operating income during the first four full quarters after closing, before potential synergies and non-cash amortization of intangible assets and related purchase accounting adjustments.
Cruise operator Carnival Corp. (CCL-N) said Tuesday it expects to post a loss of US$2.9-billion in the third quarter, hurt by the suspension of cruises due to the COVID-19 pandemic, sending the cruise operator’s shares down almost 10.5 per cent
The cruise business is one of the worst affected from the health crisis and has forced operators, including Japan’s Luminous Cruise, to file for bankruptcy, or to raise money even at the cost of pledging ships.
Carnival, which has already raised billions in debt, said it was planning to raise a further US$1-billion through a stock offering.
The company, which completed its first seven-day cruise last weekend on its Italian brand, Costa Cruises, also said in a filing that the loss figure the third quarter ended Aug. 31 included non-cash impairment charges of US$0.9-billion.
The Princess Cruises operator also said its 18 less efficient ships, which accounted for about 12 per cent of pre-pandemic capacity but only 3 per cent of its operating income in 2019, have left or are expected to leave the fleet.
“We continue to take aggressive action to emerge a leaner more efficient company,” Chief Executive Officer Arnold Donald said.
However, Miami-based Carnival said cumulative advanced bookings for the second half of 2021 are at the higher end of its historical range even as it advertises and markets less, signaling strong pent-up demand for cruising among consumers.
U.S. homebuilder Lennar Corp. (LEN-N) slid 3.9 per cent in the wake of topping Wall Street estimates for quarterly profit and revenue on Monday as record-low mortgage rates boosted demand from buyers.
The U.S. housing sector is emerging as one of the few areas of strength in an economy suffering a record slowdown because of the COVID-19 pandemic, with U.S. homebuilding accelerating by the most in nearly four years in July.
Lennar said orders, an indicator of future sales, rose 16.4 per cent to 15,564 homes in the third quarter. The company sold 13,842 homes in the period, up from 13,522 homes a year earlier, while the average price of homes sold rose to $396,000 from $394,000.
“Fundamentals in the housing market continued to remain strong supported by record low interest rates and a continued undersupply of new and existing inventory,” Executive Chairman Stuart Miller said.
Net earnings attributable to the company rose to US$666.4-million, or US$2.12 per share, in the three months ended Aug. 31, from US$513.4 million, or US$1.59 per share, a year earlier.
Revenue rose marginally to US$5.87-billion.
Analysts on average had expected Lennar to earn US$1.55 per share on revenue of US$5.48-billion, according to IBES data from Refinitiv.
Shares in Nikola Corp. (NKLA-Q) sank 8.2 per cent on Tuesday after the short-selling research house which has alleged the electric truckmaker misled investors over its technology said the company had failed to address most of its queries.
Nikola has rejected the accusations and threatened to take legal action against short-seller Hindenburg since its research into the company sparked the first of a series of falls in the company’s shares last week.
Bloomberg News reported late on Monday that the U.S. Securities and Exchange Commission (SEC) was probing Nikola to assess the merits of Hindenburg’s claims that it had misled investors about its business prospects.
“Nikola’s response has holes big enough to roll a truck through,” the short seller said in a new report on Tuesday.
Nikola, which has denied any allegations of wrongdoing and said it had contacted and briefed the SEC on its concerns regarding the short-seller’s report, could not immediately be reached for comment on Tuesday.
.With files from staff and wires