A roundup of some of the North American equities making moves in both directions today
On the rise
Thomson Reuters Corp. (TRI-T) rose after it said its revenue rose in the third quarter on gains in its legal and corporates divisions, as cost cuts helped the news and information company raise its 2020 free cash flow outlook.
The company said Tuesday’s results gave it “increasing confidence” about its full-year financial forecast, but that the course of the unfolding COVID-19 pandemic could change this.
Thomson Reuters, which owns Reuters News, said in a statement that its quarterly revenue rose 2 per cent to US$1.44-billion, while its operating profit rose 21 per cent to US$318-million.
“I’m very pleased to report our markets and businesses continue to prove resilient in the face of a challenging broader macro-environment,” Chief Executive Steve Hasker said.
Adjusted earnings before interest, tax, depreciation and amortization surged 42 per cent from a US$100-million cost cutting program this year related to the pandemic and higher revenue, Thomson Reuters said.
Thomson Reuters' adjusted earnings of 39 US cents per share were ahead of the 38 US cents analysts expected, according to IBES data from Refinitiv, while the company’s quarterly revenue was also slightly above Wall Street expectations.
Thomson Reuters reaffirmed its full-year guidance of revenue rising between 1 per cent to 2 per cent and increased its free cash flow forecast to about US$1.1-billion, which was at the higher end of the previous outlook.
The Mississauga-based company reported revenue of $162.3-million, exceeding the $152-million forecast on the Street and up from $117.4-million during the same period year ago. Adjusted EBITDA rose to $78.1-million from $39.1-million and also exceeding expectations ($59.6-million).
“There is no doubt that Cargojet’s Domestic Overnight Network continues to benefit from the elevated levels of e-Commerce, but we are equally focused on ensuring that we are building strong long-term growth in our ACMI and Charter businesses. We are also continuing to invest in growth opportunities while prudently strengthening our Balance Sheet with an overall reduction of $92 million in net-debt on a year-to-date basis,” said President and CEO Dr. Ajay Virmani.
ATB Capital Markets analyst Patrick O’Rourke said: “BTE’s Q3/20 financial results can largely be viewed as positive, with both production and CF coming in modestly ahead of expectations, though, in our view, the production beat vs. expectations partially emanated from a noisy quarter relating to shut-in resumptions. The real driver of positivity, in our view, came from the better than anticipated cash costs – particularly for unit operating costs, where the Company improved the midpoint of its 2020 guide by 7 per cent. A formal 2021 budget is expected in December, but the Company has provided investors guideposts in its current corporate presentation. Despite strong execution on costs, the challenge for BTE remains high leverage and weak commodity prices. BTE provided investors with an update to operations, which includes bringing on production two Duvernay wells drilled earlier in the year, drilling of two gas wells at Pembina O’Chiese this winter, and a 30 well drilling program in the Viking.”
Mondelez International Inc. (MDLZ-Q) was higher in the wake of forecasting 2020 earnings to grow more than 5 per cent and reporting better-than-expected quarterly results as consumers avoided stepping out and stocked candies and cookies at home during the COVID-19 pandemic.
Known for Oreo cookies and Cadbury chocolates, Mondelez said it was planning to reinstate its share buyback program in the fourth quarter, as business was performing well.
Sales rebounded in Asia, Africa, Middle East and Europe as stores reopened after long lockdowns and consumers working or attending classes at home bought more chocolates and biscuits.
“We do not expect a repeat of the disruption that we saw at the beginning of the crisis ... continue to see those (emerging) markets recuperating with bumps,” Chief Executive Officer Dirk Van de Put said.
On an adjusted basis, the company earned 63 US cents per share, a cent more than expectations.
On the decline
Canadian fertilizer maker Nutrien Ltd. (NTR-T) was down after it narrowed its full-year profit forecast and said it has seen an improvement in market conditions globally, helped by higher crop and fertilizer prices.
The Saskatchewan-based company, the world’s biggest fertilizer maker by capacity, also posted a net loss for the third quarter, hurt by an impairment charge of US$823-million.
The company said it now expects 2020 adjusted net earnings to fall in the range of US$1.60 to US$1.85 per share, compared with its previous forecast of US$1.50 to US$1.90 per share.
Nutrien lowered the top-end of its full-year forecast for adjusted earnings before interest, taxes, depreciation and amortization to US$3.5- to US$3.7-billion, from US$3.5- to US$3.8-billion.
The company posted a net loss of US$587-million, or US$1.03 per share, for the third quarter ended Sept. 30, compared with a profit of US$141-million, or 24 US cents per share, a year earlier.
The impairment charge was related to a less favorable long-term outlook for phosphate prices and expected global supply imbalance, the company said.
Rival Mosaic Co. (MOS-N) on Monday reported a quarterly adjusted profit of 23 US cents per share, beating analysts' average estimate of 17 US cents per share, helped by higher gross margins.
Bausch Health Companies Inc. (BHC-T) fell after it reported a profit of US$71 million for its third-quarter compared with a loss of US$49 million in the same quarter last year as revenue was hurt by the pandemic.
The Quebec-based drug company says the profit amounted to 20 US cents per share for the quarter ended Sept. 30 compared with a loss of 14 US cents per share in the third quarter of 2019.
Revenue totalled US$2.14-billion, down from US$2.21-billion a year ago.
The company says the COVID-19 pandemic hurt revenue by about US$150-million in the quarter.
Bausch Health says its adjusted earnings before interest, taxes, depreciation and amortization were US$948-million for the third quarter of 2020 compared with US$942-million for the third quarter of 2019.
Gibson Energy Inc. (GEI-T) was down after its third-quarter results fell narrowly below expectations on the Street.
After the bell on Monday, the Calgary-based company reported earnings before interest, taxes, depreciation and amortization of $95.7-million, falling short of the analyst’s $109-million projection.
In a research note, Raymond James analyst Chris Cox said: “Overall, a relatively uneventful quarter despite the modest headline miss, with corporate line-items driving substantially all the variance relative to our forecasts. Core Infrastructure results were largely as expected, with contribution from this segment growing into year-end with a combined 1.5 MMbbl of storage at Hardisty anticipated to be brought online in 4Q20. Looking ahead, we are encouraged by commentary signaling a resumption of commercial negotiations on incremental growth projects. From a financial perspective, Gibson remains well-positioned to handle any incremental capital if/when those opportunities emerge; Gibson exited the quarter with a D/EBITDA of 2.7 times - below the company’s 3.0-3.5 times target.”
PayPal Holdings Inc. (PYPL-Q) lost ground after beating Wall Street estimates for quarterly revenue and profit on Monday, boosted by a surge in digital payments as COVID-19 lockdowns worldwide drove more businesses online, but it forecast current-quarter profit below expectations.
For the fourth quarter, PayPal expects adjusted profit to grow in a range of 17 per cent to 18 per cent, below analysts' estimated growth of about 24 per cent, according to IBES data from Refinitiv.
PayPal Chief Executive Dan Schulman said in a call with analysts that the company was giving a more prudent estimate for the fourth quarter in part because of uncertainty due to the pandemic and its impact on the global economy, as well as Tuesday’s U.S. presidential election and concerns about social unrest.
Like other companies in the digital payments sector, PayPal has been profiting from a boom in online transactions this year, heavily driven by pandemic restrictions that have pushed more business into the virtual realm.
The San Jose, California-based company processed a total of US$247-billion in payments in the third quarter, up 36 per cent from the year-earlier period, and added 15.2 million net new active customers.
The company said it was on track to process just shy of US$1-trillion in payments this year.
Revenue rose about 25 per cent to US$5.46-billion, compared with analysts' average estimate of US$5.43-billion.
On an adjusted basis, PayPal earned US$1.07 per share. Analysts had expected it to earn 94 US cents per share.
Victoria-based Aurinia Pharmaceuticals Inc. (AUP-T) fell after its drug candidate for the treatment of dry eye syndrome did not meet the main goal in a mid-to-late stage study.
With files from staff and wires