A roundup of some of the North American equities making moves in both directions today
On the rise
BCE Inc. (BCE-T) rose 1.2 per cent after announcing it has struck an agreement for the exclusive Canadian rights of original series made for the upcoming U.S. streaming platform HBO Max.
The pact with Warner Bros., announced Wednesday, will secure a fresh selection of programming to help fortify Bell’s Crave streaming brand in an increasingly crowded market where Apple TV Plus and Disney Plus arrive in November.
The deal also confirms that HBO Max isn’t headed to Canada as a standalone option when it launches stateside next May, a move that would’ve thrown another streaming competitor into the ring.
Meanwhile, AT&T Inc. (T-N) shares increased 0.4 per cent on a late Tuesday announcement that the HBO Max streaming video service will cost US$15 per month -- the same price it currently charges for HBO - when it launches in May 2020, marking an aggressive entry into the streaming wars.
The announcement of the price drew woo’s from the audience of financial analysts and investors attending the WarnerMedia presentation on Tuesday.
HBO Max is expected to reach 75 million to 90 million global subscribers by 2025, with about 50 million of these coming from the United States.
General Electric Co. (GE-N) jumped 11.6 per cent after revealing on Wednesday it posted a US$1.3-billion loss in the third quarter, and said revenue was flat as it struggles to restore growth and profits after taking a US$22-billion accounting charge a year ago.
On an adjusted basis, the Boston-based conglomerate generated more profit than expected, beating analysts estimates, and vowed to deliver US$1-billion more cash this year than it had previously forecast.
The results signaled “progress in the transformation of GE,” Chief Executive Officer Larry Culp said.
The company said it now expects full-year industrial free cash flow to be between $0 and US$2-billion, compared with its earlier forecast of negative US$1-billion to positive US$1-billion.
goeasy Ltd. (GSY-T) was up 0.4 per cent after it announced it has completed an amendment to its senior secured revolving credit facility provided by a syndicate of banks. The amendment increased the maximum principal amount available by $120.5-million in borrowing capacity, increasing the limit from $189.5-million to $310-million.
Raymond James analyst Brenna Phelan said: “goeasy’s ability to successfully obtain access to lower cost, more diversified sources of funding has been a big contributor to what we see as its best in class execution. This incremental borrowing capacity extension plus a 25 bps rate reduction is another positive step that gives additional visibility into goeasy successfully executing on the significant loan growth runway ahead. Furthermore, as highlighted in this morning’s press release, goeasy’s current ROE and payout structure enables the company to fund~$150-million of loan book growth annually through its internally generated cash flows (i.e., a significant portion of Raymond James’ net loan growth forecasts of $220-million and $245-million for 2020 and 2021, respectively) .”
Mattel Inc. (MAT-Q) increased 13.7 per cent after reporting a surprise jump in quarterly revenue after the bell on Tuesday as newer models energized demand for its flagship Barbie brand, while the launch of dolls based on Korean pop-sensation BTS lifted international sales.
Worldwide Barbie gross sales rose 10 per cent to US$412.8-million in the third quarter, while analysts had expected a 1.2-per-cent drop on fears that demand would ease in the run-up to the release of the Disney princess movie Frozen 2, the doll rights to which are owned by Hasbro Inc.
First Quantum Minerals Ltd. (FM-T) gained 0.5 per cent after South Korea’s LS Nikko Copper announcing it has signed a contract to buy 120,000 tons per year of copper concentrate for 15 years starting in 2020, the South Korean copper smelter said on Wednesday.
The deal will help LS Nikko Copper ensure a stable supply of copper concentrate, a key raw material to make electrolytic copper, gold and silver, the company said in a statement.
Under the deal, LS Nikko Copper will receive copper concentrate from Panama’s Cobre Panama, operated by FQM.
Electronic Arts Inc. (EA-Q) added 2.5 per cent after it announced it has postponed the release of its basketball game NBA Live to coincide it with the launch of new gaming consoles next year.
The postponement came despite the release of better-than-expected results after the bell.
Sony’s next-gen PlayStation “PS5” and Microsoft Corp’s Xbox Project Scarlett are expected to launch next year during the holiday season.
Credit Suisse analyst Stephen Ju said: " 2QFY20 beat on both top line and bottom line, driven by strong Live Services growth at 50% with strength across multiple franchises – management cited contributions from Ultimate Team, Sims, and the completed transition for FIFA Online as the larger contributors to the segment’s recovery. Given the impact to FY21, EA did offer an earlier-than-anticipated update for the year with Battlefield set to ship instead in FY22 vs. the historical two-year rotation cycle as it looks to avoid the lower installed base of the new consoles to be released next year. Despite the company’s expectations for bookings growth for FY21, we suspect that this will touch off an extended debate given the size of Battlefield’s contribution. As we think through the long term health of the franchise, we think spending another year in development with the optionality to return to Battlefield One level of consumer traction with what is hopefully a higher-quality product is perhaps the preferred result. Our updated estimates contemplate a flat year-over-year revenue and EPS outcome, and we have also made numerous changes for FY22 and beyond. Our target price for EA shares edges higher, to $118, and we maintain our Outperform rating based on the following ongoing multi-pronged secular shift for the industry: 1) further positive mix shift to digital, 2) consumer adoption of microtransactions driving incremental monetization, as well as 3) the expansion of EA’s addressable market to target the global online user base."
On the decline
Maple Leaf Foods Inc. (MFI-T) plummeted 13.7 per cent after its third-quarter profit fell compared with a year ago, hurt by difficult pork market conditions including volatile hog prices and the Chinese import suspension of Canadian pork.
The company says strong performance in prepared meats, value-added pork and poultry and plant protein, and a favourable resolution of an income tax audit was more than offset by the difficult pork market and investments in its plant protein business.
On an adjusted basis, Maple Leaf says it earned three cents per share in the quarter, down from an adjusted profit of 29 cents per share.
Analysts on average had expected a profit of 31 cents per share for the quarter, according to financial markets data firm Refinitiv.
Centerra Gold Inc. (CG-T) was down 16.1 per cent after its third-quarter results, released before the bell, fell short of expectations on the Street.
The Toronto-based miner reported a net loss of $165.1-million, or 56 cents per common share, and adjusted earnings of $75.4-million, or 26 cents per common share after including an adjustment for the impairment recorded on the Mount Milligan Mine and the additional settlement expense relating to Kyrgyz Republic Strategic Agreement.
Torstar Corp. (TS.B-T) lost almost 30 per cent after it suspended its quarterly dividend as it reported a $40.9-million loss attributable to shareholders in its latest quarter.
The publisher of the Toronto Star newspaper says it suspended the regular payment to shareholders of 2.5 cents per share as part of its plan to preserve its cash and strengthen its financial position.
The board of directors plans to review the dividend policy again in the fourth quarter of 2020, the company says.
The decision came as Torstar reported a loss of 50 cents per share for the quarter ended Sept. 30 compared with a loss attributable to shareholders of $18.8 million or 23 cents per share in the same quarter last year. Operating revenue fell to $111.8 million compared with $126.4 million.
On an adjusted basis, Torstar says it lost 21 cents per share in its most recent quarter compared with an adjusted loss of 22 cents per share in the same quarter last year.
Analysts on average had expected $112 million of revenue and an adjusted loss of 15 cents per share, according to financial markets data firm Refinitiv.
-The Canadian Press
Molson Coors Brewing Co. (TAP-N) dipped 2.9 per cent after announcing on Wednesday it plans to cut hundreds of jobs, streamline its operations and expand its product line beyond beers as it restructures its business.
The company will halve the number of its business units to two in North America and Europe and shut down its Denver office, and make Chicago its North American operational headquarters.
The brewer, which is looking to save about $150 million in cost, expects to cut 400-500 jobs in its U.S., Canada and international segments. The company had about 17,750 employees at the end of 2018.
Yum Brands Inc. (YUM-N) slid 5.8 per cent after missing third-quarter profit expectations on Wednesday, hit by a write down in the value of its investment in delivery company GrubHub and unrelenting troubles at its Pizza Hut chain.
The Louisville, Ky.-based company also reported same-store sales below Wall Street estimates.
Same-store sales at Pizza Hut were flat in the reported quarter, compared with the growth of 1.46-per-cent forecast by analysts. KFC same-store sales rose 3 per cent, also missing expectations.
“They’ve (Pizza Hut) done a lot of marketing, they’ve launched a lot of value-priced items... it still doesn’t seem to be working,” Edward Jones analyst Brian Yarbrough said.
With files from staff and wires
David Leeder