A roundup of some of the North American equities making moves in both directions today
On the rise
Barrick Gold Corp. (ABX-T) was 3.4 per cent higher in early afternoon trading on Wednesday after predicting a flat production profile over the next five years, as it reported better-than-expected third quarter profit numbers with gold bullion prices on the rise.
Earlier this year, Toronto-based Barrick swallowed African-focused miner Randgold Resources Ltd. for US$6-billion, as it tried to address a falling production and reserve profile that had set in over the past five years.
In a regulatory filing on Wednesday, Barrick said it expects to produce between 5.15 and 5.6 million ounces of gold between 2020 and 2024 - in line with what it expects to produce this year.
- Niall McGee
Keyera Corp. (KEY-T) rose 3.5 per cent after its third-quarter results exceeding expectations on the Street.
In a research note released before the bell, Raymond James analyst Chris Cox said: “Another solid quarter for the company, led by continued outperformance from the Marketing segment. This in turn is serving to further bolster the funding outlook, with Management reiterating previous commentary that it will not issue any equity (outside of the DRIP) for the current committed capital backlog. Offsetting this enthusiasm, we believe the Market will continue to take a wait-and-see approach to performance from the G&P business until the company can demonstrate in the current market that rationing processing capacity in the West Central region can insulate overall margins.”
Wendy’s Co. (WEN-Q) sat flat after it reported on Wednesday that North America same-store sales rose 4.4 per cent in the third quarter, powered by new launches such as the $5 Biggie Bag deal and spicy chicken nuggets.
The fast food burger chain also raised its full year outlook for global systemwide sales to 3.5 per cent to 4 per cent, from 3 per cent to 4 per cent. Adjusted revenues rose 10.1 per cent to US$351.1-million.
Tesla Inc. (TSLA-Q) increased 0.15 per cent after revealing plans to double the number of repair and maintenance shops, add about 100 charging stations and revamp showrooms in China as the electric vehicle maker gears up to open its Shanghai plant.
The moves mark a departure from the approach chief executive Elon Musk announced in March, when he said the company would shut many of its retail stores worldwide to cut costs.
Tesla had already treated China, the world’s biggest electric vehicle market, differently than elsewhere. The company and Musk openly disdain marketing, but in China Tesla has offered racing events and showroom parties.
“Building cars from the Shanghai factory is just the first step,” Tesla vice president Tao Lin said at an industry conference last month in Beijing. “Next we must deliver cars very well to our customers and provide very good after-sales service.
DHX Media Ltd. (DHX-T) jumped 5.4 per cent despite its first-quarter loss grew compared with a year ago as it was hit by one-time reorganization charges and a non-cash foreign exchange loss.
The company, which is changing its name to Wildbrain, says the loss amounted to $16.0-million or 12 cents per share for the quarter ended Sept. 30 compared with a loss of $2.4-million or two cents per share a year earlier.
Revenue at the producer and distributor of child and youth-oriented programming totaled $112.3-million, up from $104.0-million in the same quarter last year.
Xerox Holdings Corp. (XRX-N) increased 2 per cent on a Wall Street Journal report that is considering making a cash-and-stock offer for personal computer maker HP Inc. (HPQ-N) valued at US$27-billion.
The report, citing sources familiar with the matter, said Xerox’s board discussed the possibility on Tuesday.
On Monday, Xerox had said it will sell its 25-per-cent stake in Fuji Xerox, its joint venture with Fujifilm Holdings, for US$2.3-billion amid investor concern over the deal. Last year, Xerox had dropped its US$6.1-billion plan to merge with Fujifilm after lobbying by two of its main investors, Carl Icahn and Darwin Deason.
Shares of HP Inc. were 10.1 per cent higher.
Bird Construction Inc. (BDT-T) was up 2.9 per cent after recording third-quarter net income of $6.8-million or 16 cents per share on construction revenue of $378.6-million. That compared with net income of $4.4-million or 10 cents per share on $381.4 million of construction revenue in for the same quarter in 2018.
Analysts were expecting EPS of 14 cents and revenue of $430.1-million, according to S&P Capital IQ.
Alaris Royalty Corp. (AD-T) sat 4.9 per cent higher after it reported revenue of $30-million in the third quarter, which it said was the largest quarter in the corporation’s history and an increase of 32.3 per cent on a per-share basis compared to the prior-year period, or 82 cents versus 62 cents.
Adjusted EBITDA was $25.9-million, an increase of 29 per cent versus a year ago. Earnings came in at 57 cents per share versus 52 cents a year earlier and ahead of expectations of 44 cents, according to S&P Capital IQ consensus.
Desjardins Securities analyst Maher Yaghi said: “Stripping out acquisitions from constant-currency growth, organic growth was likely around 4.4 per cent — up vs last quarter’s 3.6 per cent. This acceleration is encouraging, in our view, as we had seen a slight setback in growth in the previous quarter. After trailing ACN for years, its growth now compares with ACN’s FY20 organic growth guidance of 3–6 per cent. Also noteworthy, every reporting segment showed positive organic growth on a yearly basis — which we have not seen at CGI in recent memory. All in, results show a continued path for expansion and position the company well to continue its build-and-buy strategy.”
Bloomin’ Brands Inc. (BLMN-Q), the parent company of Outback Steakhouse, was up over 9 per cent after revealing on Wednesday it would explore strategic options, including a sale, two months after activist investor Jana Partners disclosed plans to push for changes at the company.
“Despite this continued progress, we believe the current stock price does not reflect the value of the company. That is why the time is right to explore strategic alternatives,” David Deno, chief executive officer of Bloomin’ Brands, said in a statement.
Jana Partners was not immediately available for comment.
In August, the hedge fund disclosed a 9-per-cent stake in Bloomin’ Brands and said it plans to discuss strategic alternatives with the management, returning for the second time, after reaching a settlement in 2018.
WSP Global Inc. (WSP-T) was 0.8 per cent higher after it missed expectations even though its net earnings increased 6.6 per cent to $93.7 million in the third quarter on higher revenues.
After the bell on Tuesday, the Montreal-based engineering consultancy earned 89 cents per diluted share, up from 84 cents per share or $87.9 million a year earlier.
Adjusted net earnings were $99.8 million or 95 cents per share, up from $99.3 million or 95 cents per share in the prior year.
Net revenues for the period ended Sept. 28 climbed 15.3 per cent to $1.69 billion, up from $1.47 billion in the third quarter of 2018.
WSP was expected to earn $1.10 per share in adjusted profits on $1.7 billion of revenues, according to financial markets data firm Refinitiv.
Raymond James analyst Frederic Bastien said: “We maintain our constructive rating on WSP Global after yesterday’s solid 3Q19 results. These, in our view, are evidence that scale matters in the engineering consulting industry. Our Best Pick for 2019 is not only leveraging its global footprint and technical leadership to produce consistent EBITDA growth, but also drawing on a dynamic team to create new opportunities for the business. Look no further than the recently announced Ecology & Environment, Orbicon and Lievense acquisitions for proof. All three deals solidify WSP’s core design practice in OECD countries and at the same time accelerate the growth of its advisory, planning and permitting services. Add to that a clean bill of health on all metrics we consider key to the sector—including margins, ROIC, DSO and leverage—and there’s good reason to believe WSP’s valuation should command a premium in the market.”
Papa John’s International Inc. (PZZA-Q) stock rose 5.1 per cent after it said on Wednesday its finance head would leave the company next year as new Chief Executive Officer Rob Lynch made a slew of top level changes to turn around the pizza chain’s stuttering business.
Mr. Lynch, who was previously president of Arby’s Restaurant Group Inc, took over the top job in August and was tasked by activist investor Starboard Value to improve Papa John’s sales, which have been dented by the negative publicity surrounding its founder John Schnatter.
Mr. Schnatter resigned as CEO in 2017 after he came under fire for criticizing the National Football League’s leadership over national anthem protests by players.
Spin Master Corp. (TOY-T) rose 0.2 per cent after saying earnings fell in the third quarter as several challenges, including U.S. tariffs on Chinese production, affected results.
The Toronto-based toy manufacturer, which reports in U.S. dollars, says it earned $92.1-million, or 89 cents per share in the quarter ending Sept. 30, compared with $107.9-million or $1.06 per share in the same quarter last year. The company said adjusted net income was $93.2-million, or 90 cents per share, compared with $117.7-million or $1.15 per share last year.
On the decline
That led an equity analyst at Raymond James to lower his rating for the B.C.-based tech company.
Steven Li said: "“SWIR is pivoting towards a stronger business model (more recurring services, higher margin). 2019 was a substantial investment year for the company which we expected but now it looks like 2020 will also be in transition with revenues flattish at best (as IoT growth is offset by PC-OEM declines and VW delays). Shares inexpensive but with few catalysts near-term, we are moving to sidelines for now.”
After releasing weaker-than-anticipated quarterly results, Badger Daylighting Ltd. (BAD-T) dropped over 17 per cent.
That led an equity analyst at Industrial Alliance Securities to lower his rating for the stock.
Elias Foscolos said: "BAD’s 2020 EBITDA guidance of $175-195-million is below our previous forecast and consensus, and we view increasing truck builds in the face of decreasing utilization as a conflicting signal.”
Bombardier Inc. (BBD-B-T) slid 1 per cent after announcing on Wednesday it had alleviated technical problems that have held up deliveries of trains to Swiss Federal Railways (SBB) as the Canadian plane-and-train-maker aims to complete the long-delayed contract by mid-2021.
The company said the reliability of the 23 trains in operation had increased by a factor of seven in recent weeks and ride comfort had substantially improved thanks to new software.
Bombardier said last week it was on track to complete a handful of large rail contracts, including the Swiss order, that have weighed on margins as it restructures.
In the last quarter, Maple Leaf fell short of analysts’ forecasts, citing, in part, the impact of “abnormal erratic” pork market conditions.
Uber Technologies Inc. (UBER-N) shares fell as much as 9 per cent to a record low on Wednesday after shares held by early investors became available for sale following a six-month restriction since the ride-hailing company’s initial public offering.
Uber made its market debut at US$45 per share in May, but has since lost more than 40 per cent in value as the loss-making company struggled to retain investor confidence.
Much of Uber’s nearly 1.68 billion outstanding shares were under lock-up. In the IPO filing, Uber had said about 76 per cent of its shares held by insiders, venture capitalists and other investors were under the restriction.
With files from Terry Weber, Brenda Bouw and wires