A roundup of some of the North American equities making moves in both directions today
On the rise
Enbridge Inc. (ENB-T) rose 0.1 per cent after the Minnesota Supreme Court declined on Tuesday to hear environmental and tribal challenges to the company’s Line 3 oil pipeline, a decision that removes one potential obstacle for the already-delayed project.
The ruling means the Minnesota Public Utilities Commission (MPUC), the state regulator that approved the Line 3 project last year, will not have to consider additional environmental issues.
The Supreme Cannabis Company Inc. (FIRE-T) jumped 1.5 per cent after it reported fourth-quarter net revenue was $19-million which was in line with expectations and up from $3.5-million a year earlier. Its net loss was $421,000 versus a profit of $234,000 a year earlier.
See also: Supreme Cannabis’ Q4 2019 revenue jumps 90 per cent above Q3 (Cannabis Professional)
A day after Health Canada announced the suspension of its cannabis growing and processing licences, shares of CannTrust Holdings Inc. (TRST-T) reversed early losses and closed 1.2 per cent higher.
On Tuesday, the company’s stock plummeted almost 15 per cent after the move, which is considered a major blow to what was once one of the most prominent and highly regarded marijuana growers in Canada.
On the decline
Shares of FedEx Corp. (FDX-N) were down almost 13 per cent after the delivery giant warned that it would miss analysts’ estimates, citing the impact of an ongoing trade dispute between the United States and China and a slowing global economy.
FedEx now expects adjusted earnings of US$11 to US$13 per share for full-year 2020 ending May 31. Analysts on average had expected a profit of US$14.69 per share, according to Refinitiv IBES estimates.
In its most recent quarter, FedEx said adjusted profit fell 14 per cent to US$3.05 a share. Analysts had been forecasting a number closer to US$3.15.
Citi analyst Christian Wetherbee said: “FedEx reported F1Q20 results which were in line with Citi and, as expected, lower than consensus. That said, the main event was a drastic guidance cut that took more than $2 per share (20 per cent) from the previous outlook. The cut equals almost a $900-million reduction in the EBIT outlook with only three quarters left in the fiscal year. Clearly the macro has decelerated in Europe and trade issues are having a building negative impact on Express, but the impact seems largely due to an inability to lower costs dynamically for two main reasons…first, the TNT integration has reduced workforce flexibility and FedEx continues to run duplicative networks in Europe and second, with the peak season approaching FedEx has little ability to cut capacity. Shares will be down on results, and we expect the recent gains to be erased with short-term downside toward $150.”
Net earnings attributable to the company rose to US$520.6-million, or 85 US cents per share, in the first quarter ended Aug. 25, from US$392.3-million, or 65 US cents per share, a year earlier. Net sales slipped 2.2 per cent to US$4-billion, missing the average analyst estimate of US$4.08-billion.
"We got off to a slower start in our other segments, and we’re taking actions to drive topline improvement for those segments,” General Mills Chief Executive Officer Jeff Harmening said in a statement.
Adobe Systems Inc. (ADBE-Q) fell 1.8 per cent after the software maker forecast tepid revenue for the current quarter.
In a research note, Citi analyst Walter Pritchard said: "Expect shares to react negatively to execution challenges in Digital Experience (DX) as this business has become key to maintaining current trajectory of growth. At the same time, tempering of estimates here is likely to happen off these results and we have highlighted that FY20 numbers here already looked high (Street was at 20-per-cent year-over-year growth vs. Citi 16 per cent). We note some encouraging comments in some areas on call such as CEO Narayen noting there are no clear holes in DX portfolio and CFO Murphy commenting that pricing was not a significant driver on DM performance. We do expect shares need to get through Nov 4th analyst day, where the company usually takes the opportunity to level set out year number to levels where it can outperform. We continue to like medium-term drivers here, including sustained DM growth (both units and price as driver) as well as positive secular trends in DX.
Exxon Mobil Corp. (XOM-N) was down 0.5 per cent on news Wednesday that it was looking to sell its 50-per-cent stake in the Gippsland Basin oil and gas development in Australia’s Bass Strait as part of a broader review of its portfolio of assets around the world. The Gippsland Basin joint venture, off the state of Victoria, has long been the mainstay oil and gas supplier into southeastern Australia, but output from the fields is in decline.
With files from Terry Weber, Brenda Bouw, staff and wires