A roundup of some of the North American equities making moves in both directions today
On the rise
Brookfield Infrastructure Partners LP (BIP.UN-T) rose in the wake of the premarket announcement that it has sold 100-per-cent of its stake in Enwave, its North American district energy business, through two separate transactions for total consideration of US$4.1-billion on an enterprise value basis.
Ontario Teachers’ Pension Plan Board and IFM Investors have agreed to acquire 100 per cent of Enwave’s Canadian business. Concurrently, QIC and Ullico have agreed to acquire 100 per cent of Enwave’s U.S. business.
Net proceeds to BIP are expected to be approximately US$950-million.
Brookfield Property Partners LP (BPY.UN-T) was up reported a loss in its latest quarter compared with a profit a year earlier when it benefited from higher valuation gains, as well as strong performance in several of its investments.
The real estate company says it lost US$38-million or 40 US cents per unit for the quarter ended Dec. 31 compared with a profit of US$1.55-billion or US$1.00 per unit in the same quarter a year earlier.
Company funds from operations and realized gains totalled US$287-million or 30 US cents per unit, down from US$459-million or 48 US cents per unit in the same quarter a year earlier.
Brookfield Asset Management Inc. offered US$5.9-billion last month to buy the stake in Brookfield Property Partners that it does not already own.
Brookfield Property Partners says a special committee of independent directors has hired external legal and financial advisers and they are considering the proposal worth US$16.50 per unit.
Top U.S. oil producer Exxon Mobil Corp. (XOM-N) was up on Tuesday after it posted its first annual loss as a public company as the COVID-19 pandemic hammered energy prices and it reduced the value of its shale gas properties by more than US$20-billion in the fourth quarter.
Exxon cut up to 15 per cent of its workforce and delayed oil and gas projects after accepting oil prices could remain below US$60 a barrel for years. It added US$22-billion to its debt last year to cover its dividend and project spending.
The company reported a net annual loss of US$22.44-billion for 2020, compared with a full-year profit of $14.34 billion in 2019.
Exxon posted four straight quarters of losses in 2020 and is under fire from activist investors pushing for board changes and a better strategy for a global transition to cleaner fuels.
On Tuesday it named former Petronas President Tan Sri Wan Zulkiflee Wan Ariffin to its board of directors, and said it was in discussions with other candidates.
ConocoPhillips (COP-N) rose as it reported a smaller-than-expected quarterly loss on Tuesday, thanks to steadying crude prices that also saw the top U.S. independent oil producer raise its capital budget for 2021.
Crude oil prices are holding on to gains from a rebound in late-2020 after a coronavirus-induced slump, with Brent crude hovering around US$58 per barrel on Tuesday, after averaging around US$45 in the last three months of 2020.
ConocoPhillips, which completed the US$13.3-billion buyout of rival Concho Resources in January, the biggest pure shale acquisition by any company since 2011, set a US$5.5-billion spending budget for 2021, much of which will be used to sustain current production.
Only about US$400-million will be invested in major projects, primarily in Alaska, and in ongoing exploration appraisal activity, the company said.
On a sequential basis, ConocoPhillips’ fourth-quarter production excluding Libya climbed 7.3 per cent to 1.1 million barrels of oil equivalent per day. Average realized price was US$33.21 per barrel of oil equivalent, 7 per cent higher than the third quarter.
The company reported a net loss of US$772-million in the quarter, compared with US$450-million in the third.
Excluding a non-cash impairment charge related to its Alaska North Slope Gas and Lower 48 assets, it posed a loss of 19 US cents per share, while analysts were expecting a loss of 28 US cents per share, according to Refinitiv IBES data.
United Parcel Service Inc. (UPS-N) saw gains after it posted a 26.6-per-cent rise in quarterly adjusted profit, as its home delivery volume surged to a record on pandemic-fueled online purchases of holiday gifts and staples ranging from food to furniture.
The world’s biggest parcel delivery company, which is also delivering COVID-19 vaccines, said its adjusted net income rose to US$2.33-billion, or US$2.66 per share, in the fourth quarter ended Dec. 31, from US$1.84-billion, or US$2.11 per share, a year earlier.
During the quarter, UPS and FedEx Corp began delivering COVID-19 vaccines to hospitals and health clinics as part of the U.S. government’s Operation Warp Speed project, fueling continued strength in its specialty healthcare business. Fourth-quarter revenue jumped 17.4 per cent in the key domestic segment at UPS, which has been inundated with packages from Amazon and other online retailers.
Total revenue rose to US$24.90-billion from US$20.57-billion.
Ford Motor Co. (F-N) was up after announcing it will invest US$1.05-billion in its South African manufacturing operations, including upgrades to expand production of its Ranger pickup truck.
The investments aim to increase Ford’s installed capacity in South Africa from 168,000 to 200,000 vehicles, said Andrea Cavallaro, operations director of Ford’s International Market Group.
“It’s the biggest investment in Ford’s 97-year history in South Africa and one of the largest ever in the local automotive industry,” he told an announcement event.
Ford joins global carmakers including Volkswagen , Toyota and Nissan in ramping up production in Africa, viewed by the industry as a large, untapped market for new car sales.
On the decline
Spot silver prices, an alternative focus in the battle between a pack of small traders and Wall Street hedge funds since late last week, fell more than 4% to $27.66 an ounce after hitting an eight-year high a day earlier.
Analysts said the silver pullback may show the limits of small investors’ impact in a large market, while posts on the popular Reddit forum WallStreetBets expressed concern that silver buying could cost traders their grip on some stocks.
After falling almost 31 per cent on Monday, shares of GameStop Inc. (GME-N) continued to plummet and were halted briefly following a 42-per-cent slump when the markets opened as a buying spree led by small investors subsided as a Reddit-driven trading frenzy that has shocked global financial markets over the past week started to show signs of fizzling out.
Other Reddit favourites, including Canada’s BlackBerry Ltd. (BB-T) and movie theater operator AMC Entertainment Holdings Inc. (AMC-N), also slumped although it remains 500% higher than the start of the year, before the organized band of small buyers piled in and forced a “squeeze” that required big funds to close short positions by buying shares at very high prices.
Online broker Robinhood, on whose platform much of the buying and selling has taken place, confirmed on Monday it had raised another US$2.4-billion from shareholders following a US$1-billion boost last week as it strives to meet demands for additional collateral to cover trades.
Imperial Oil Ltd. (IMO-T), one of Canada’s biggest crude producers and refiners, was lower after it swung to a quarterly loss, dented by impairment charges of $1.17-billion related to abandoned assets in Alberta.
Along with the rest of Canada’s oil and gas industry, the company endured a torrid 2020 in which the coronavirus pandemic crushed fuel demand.
Crude prices have since rebounded from historic lows and demand is slowly picking up, though the recovery remains tentative while many oil companies have been focused on repairing their balance sheets.
Imperial, majority owned by U.S. oil major Exxon Mobil Corp , said its refinery throughput averaged 359,000 barrels per day (bpd) for the fourth quarter ended Dec. 31, higher than 341,000 in the prior quarter.
Production came in at an average 460,000 barrels of oil equivalent per day (boepd) in the quarter, up 26 per cent from previous quarter.
The Calgary-based company posted a quarterly loss of $1.15-billion, or $1.56 per share, from a profit of $3-million, or breakeven per share, in the third quarter.
In a research note, ATB Capital Markets analyst William Lacey said: “Overall, we view the release as being positive as upstream production was the highest in 30 years, driven by record production at Kearl.”
Dorel Industries Inc. (DII.B-T) fell after two shareholders said on Tuesday they would vote against a take-private deal from Cerberus Capital Management, a day after the private equity firm sweetened its bid for the Canadian bicycle maker.
Investment advisory firms Brandes Investment Partners and Letko, Brosseau & Associates Inc, which own about 7 per cent and 12 per cent of outstanding class B subordinate shares of Dorel, respectively, said the revised offer “significantly undervalues” the company.
Cerberus on Monday raised the deal value to about $16 per share from $14.50 per share, or about $470 million, three months earlier.
Under the earlier deal, affiliates of Cerberus and the family shareholders of Dorel would pay $14.50 apiece for shares of the company that the family does not currently hold.
The drugmaker is trying to deliver two billion doses of the vaccine in 2021 at a breakneck pace as countries rush to sign supply deals in an effort to control a pandemic that has killed over 2 million people globally.
Pfizer has supplied 65 million doses of the vaccine globally and 29 million doses to the United States as of Jan. 31. It expects to supply 200 million doses to the U.S. government by the end of May.
The U.S. Centers for Disease Control and Prevention said it had distributed just under 50 million doses total of Pfizer and Moderna Inc’s COVID-19 vaccines as of Feb. 1.
About 32 million of them have been administered and 17 million of those doses were Pfizer’s vaccine, according to the CDC data.
The vaccine was among the first to be authorized for emergency use in the United States and several other countries, and analysts have forecast billions in sales.
In the fourth quarter, the vaccine brought in sales of US$154-million.
The company now expects full-year adjusted earnings of US$3.10 to US$3.20 per share, up from its prior forecast of US$3 to US$3.10 per share.
Excluding items, Pfizer earned 42 US cents per share, but missed market expectation of 48 US cents per share, according to IBES data from Refinitiv.
China’s Alibaba Group Holding Ltd. (BABA-N) dipped in the wake of beat Walling Street estimates for third-quarter revenue on Tuesday, as its e-commerce business benefited from a switch to online shopping triggered by the coronavirus pandemic.
The results come as China clamps down on company founder Jack Ma’s business empire, having forced the suspension of a US$37-billion IPO for financial affiliate Ant Group.
In November, Alibaba’s China-focused Singles Day sale - the world’s biggest online shopping event that eclipses the revenues generated on U.S. shopping holidays Black Friday and Cyber Monday - registered sales of US$74-billion in November.
Alibaba’s total revenue rose 37 per cent to 221.08 billion yuan (US$34.24-billion) in the three months ended Dec. 31, above analysts’ estimates of 214.38 billion yuan, according IBES data from Refinitiv.
Core commerce revenue from its main e-commerce sites rose 38 per cent to a record high of 195.54 billion yuan, powered by the company’s Chinese operations as the economy rebounded from the COVID-19 crisis.
Net income attributable to ordinary shareholders was 79.43 billion yuan, or 28.85 yuan per American depository share, compared to 52.31 billion yuan, or 19.55 yuan per ADS, a year earlier.
Revenue for cloud computing rose 50 per cent year on year, hitting 16.12 billion yuan, as the division posted a positive EBITA for the first time.
Alibaba also said it was “unable to complete a fair assessment” of the impact that Ant’s stalled IPO will have on the company.
The latest turnaround strategy from the company, which has struggled for years to grow sales beyond baby boomers, comes after a decade-long effort to grow sales overseas and draw younger riders with cheaper and newer models.
Harley said it would invest between US$190-million to US$250-million a year in its strongest motorcycle segments - touring, large cruiser and trike - to achieve mid single-digit growth in bike revenue.
Under Chief Executive Jochen Zeitz, who took charge last year, Harley has shifted the focus back to big bikes, traditional markets like the United States and Europe, and older and wealthier customers.
As part of the strategy, the company has trimmed its workforce, global dealer network, eliminated slow-selling models and exited 39 markets where weak sales and profits do not justify investment.
Harley posted a loss of 63 US cents per share in the fourth quarter, compared with a profit of 9 US cents per share a year earlier. Analysts surveyed by Refinitiv, on average, expected the company to report a quarterly profit of 14 US cents a share.
With files from staff and wires