A roundup of some of the North American equities making moves in both directions today
On the rise
Spin Master Corp. (TOY-T) jumped higher after releasing better-than-anticipated fourth-quarter results after the bell on Monday.
The Toronto-based toymaker reported adjusted EBITDA of US$52-million, blowing past the consensus projecting on the Street of US$32-million due largely to stronger-than-expected gross margins and declining expenses.
It also released initial 2021 year-over-year revenue guidance of mid-to-high single digit revenue growth.
Rare earth manufacturer Neo Performance Materials (NEO-T) and Energy Fuels Inc. (EFR-T) rose a day after launching a rare earth production initiative spanning the European and North American regions.
China is the world’s largest producer of rare earths, a group of 17 minerals used in everything from consumer electronics to military equipment.
China has threatened to stop exporting these minerals to the United States. Reviving domestic rare earths production has become a priority in Washington as relations with Beijing have frayed.
Under the agreement, uranium miner Energy Fuels said it would process the monazite sands into a mixed rare earth carbonate in Utah for use as feed material for Neo’s rare earth production plant in Europe.
Energy Fuels also said it would continue to evaluate developing additional U.S rare earth production capabilities in Utah in the future.
George Weston Ltd. (WN-T) was up despite reporting its fourth-quarter profit fell compared with a year ago as it was hit by one-time charges.
The company, which operates through Loblaw, Choice Properties and Weston Foods, says it earned a profit available to common shareholders of $289-million or $1.88 per diluted share for the quarter ended Dec. 31.
The result was down from a profit of $433-million or $2.81 per diluted share a year earlier.
However, on an adjusted basis, George Weston says it earned $2.03 per diluted share, up from an adjusted profit of $1.69 per diluted share in the fourth quarter of 2019.
Revenue for the fourth quarter of 2020, which included 13 weeks, totalled $13.81-billion, up from $12.11-billion a year earlier when George Weston’s fourth quarter only had 12 weeks.
Analysts on average had expected an adjusted profit of $1.89 per share and $14.06-billion in revenue, according to financial data firm Refinitiv.
Canopy Growth Corp. (WEED-T) on Tuesday launched its CBD-infused Quatreau sparkling water line in the United States, as it seeks to secure a firm footing in the country’s rapidly growing cannabis market ahead of expected reforms under President Joe Biden.
The company’s U.S.-listed shares, up 41 per cent through Monday’s close, continue to rise on the Nasdaq.
After years of oversupply woes in Canada, cannabis producers are banking on the much larger U.S. market opening up soon as leading Democrats lend support to laws allowing easier banking access, decriminalization of marijuana and other favorable changes.
Canopy President and Chief Product Officer Rade Kovacevic told Reuters that the U.S. market is currently fragmented, presenting an opportunity for a larger company to scale up in the region.
Quatreau comes in four variants and would be available for online sales in U.S. states that permit consumption of cannabidiol (CBD), Canopy said.
Merck & Co Inc. (MRK-N) saw gains on news it will help make rival Johnson & Johnson’s (JNJ-N) single-shot COVID-19 vaccine in a partnership set to be announced on Tuesday by U.S. President Joe Biden.
After scrapping development of its own COVID-19 vaccine candidates in January, Merck last month said it was working on a deal to open up its manufacturing capacity to other vaccine makers.
The deal with J&J comes just days after the U.S. government authorized its one-dose COVID-19 vaccine and as the company looks to increase its production. The drugmaker said on Monday it was working on signing up new manufacturing partners.
J&J is shipping about four million doses of its vaccine in the United States this week, but the next shipments hinge on when its new, larger manufacturing plant receives regulatory approvals.
The drugmaker expects to deliver another 16 million doses by the end of this month.
J&J’s vaccine is expected to be easier to distribute because it only needs to be refrigerated, while vaccines from Pfizer Inc /BioNTech SE and Moderna Inc need to be frozen. Those vaccines also require two shots.
On the decline
Shares of Target Corp. (TGT-N) announced it will invest US$4-billion annually over the next several years as the big box retailer upgrades stores and strengthens its online business, hoping to cement gains made during the pandemic that led to blowout holiday quarter results.
Shares, up 80 per cent for the year before Tuesday’s announcement, fell on the expected hit to margins.
Target’s push over the last year to use its retail outlets as fulfillment centers for online orders has drastically cut delivery times and enabled it to swipe market share from smaller rivals who rely more on their store traffic.
Sales through the company’s same-day deliveries and store pick-up services more than tripled, while total revenue rose 21.1 per cent to US$28.34-billion in the quarter.
“We’re in a position to play offense and lean into the opportunity to build on last year’s momentum,” Chief Operating Officer Michael Fiddelke said.
Fire & Flower Inc. (FAF-T) dipped with the pre-market announcement that its set to convert $52-million of its outstanding debentures into 91.2 million common shares.
In a research note, ATB Capital Markets analyst David Kideckel said: “We believe this early conversion is positive as it simplifies FAF’s capital structure, reduces interest costs, and provides the Company additional flexibility to execute its growth strategy in Canada and the US. We believe that the conversion of debentures is one more step of FAF consolidating itself as a mature Company, with enhanced access to traditional non-dilutive bank financing at a lower cost. We maintain our view of FAF as one of the best-positioned Canadian cannabis retailers to explore the Canadian cannabis market, and the U.S. cannabis retail market once it is legal to do so, given the Company’s partnership with Alimentation Couche-Tard (ATD.B-T) and its differentiated digital capabilities with Hifyre. We note that a potential expansion into the US is not captured in our current estimates, offering significant upside to investors. As such, we reiterate our positive outlook and our constructive stance on the stock.”
Zoom Video Communications (ZM-Q) reversed course and fell after it forecast current-quarter revenue above expectations, as the video-conferencing platform benefits from increased users due to remote work and online learning against the backdrop of broader stay-at-home orders.
Video conferencing services such as Zoom stand to benefit from the adoption of hybrid work models by many businesses, part work-from-office and part work-from home, that demand the usage of its platform to stay connected.
The company forecast current-quarter revenue between US$900-million and US$905-million, compared with estimates of US$829.2-million, according to IBES Refinitiv data.
Zoom users have surged in the past year, as more people used it for socializing, virtual meetings and e-classes. The platform said it has 1,644 customers contributing more than US$100,000 in trailing 12 months revenue, more than double from a year earlier.
The company reported quarterly revenue of US$882.5-million, compared with estimates of US$811.8-million.
On an adjusted basis, the Zoom earned US$1.22 per share, beating estimates of 79 US cents per share.
With files from staff and wires
David Leeder