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A roundup of some of the North American equities making moves in both directions today

On the decline

Dollarama Inc. (DOL-T) closed down 0.3 per cent on Wednesday after suspending its financial guidance due to the COVID-19 pandemic as it reported its fourth-quarter profit rose compared with a year ago.

“At this point in time, it is impossible to forecast the impact of the pandemic on the Canadian economy, the duration and scope of measures imposed by various levels of government in an attempt to curb the spread of the virus and the Corporation’s future performance in this unprecedented context,” the company said in a release.

The retailer says it saw sales surge in February and early March as customers stocked up, but then drop off as increasingly strict measures were taken to slow the spread of the novel coronavirus.

The comments came as the retailer reported a fourth-quarter profit of $178.7-million or 57 cents per diluted share, up from $171.0-million or 53 cents per diluted share in the same period a year earlier.

Methanex Corp. (MX-T) was down 4.7 per cent after announcing it is deferring approximately $500-million of previously announced capital spending on its Geismar 3 methanol project for up to 18 months, citing “the significant uncertainty in the global economy from the COVID-19 pandemic, resulting in a challenging commodity price and project execution environment.”

The company is reducing other near-term capital spending by approximately $25-million by “deferring planned maintenance activities, where prudent and without compromising safety, to preserve cash and support balance sheet strength.”

Teck Resources Ltd. (TECK.B-T) was down 5.4 per cent after it suspended its 2020 financial forecasts on Wednesday and said it expected steelmaking coal production to drop to about 80-85 per cent of normal levels in an initial two-week slowdown from March 25 due to the coronavirus outbreak.

The Canadian miner also said, however, steelmaking coal sales for the first quarter are estimated at 5.6 million tonnes, exceeding the company’s previous outlook of 4.8 million to 5.2 million tonnes.

The company said it would temporarily slow down operations and reduce staff by up to 50 per cent at its steelmaking coal and Highland Valley Copper mine in British Columbia as part of moves to ensure safety in the virus outbreak.

All employees available for work during the lockdown period would be given regular wages, Teck Resources said, adding that it expects mine site clean coal inventories to be drawn down in order to support sales.

Project construction activities at the Quebrada Blanca Phase 2 project in Chile are still on hold, the company said.

See also: Canadian mining companies prepare pandemic plans for coronavirus

BlackBerry Ltd. (BB-T) was down 17.9 per cent after its quarterly results, released after the bell on Tuesday, fell short of expectations on the Street.

Raymond James analyst Steven Li said: “The spotty Enterprise Software (ESS) performance has been a drag for much of F2020. This 4Q, ESS showed improvement (strong billings) but now BB has to contend with some severe headwinds in the automotive vertical with many assembly plants idled by COVID-19. Cylance has also been a little slower than expected (products delay leading to some customer losses, but has now launched). We have cut our forecasts and now reflect a 6-per-cent decline in revenues for F2021 (was expecting 14-per-cent growth previously).”

Corus Entertainment Inc. (CJR.B-T) finished flat after announcing is delaying its decision on whether to pay a quarterly dividend in June as it gauges the impact of the COVID-19 pandemic.

“It is too soon to gauge the impacts of the current COVID-19 outbreak, given the many unknowns related to it,” the company said. “These include the duration and severity of the outbreak. COVID-19 is altering business and consumer activity in affected areas and beyond which may materially impact the Company. The Company’s financial priorities remain unchanged. Importantly the Company remains committed to increasing its financial flexibility over the longer term. In this environment, however, the Company believes it is prudent to conserve cash out of an abundance of caution. As such, the Company expects to refrain from buying back shares under its share buyback program in the immediate term. Consistent with this approach, the Board of Directors has elected to defer its decision on the declaration of the June dividend at this time. The outside date for a decision on the declaration of the June dividend is June 9, 2020, by which point the Company expects to have more clarity on the nature and length of the impact of the COVID-19 pandemic. For greater clarity, the Company is not reducing, eliminating or temporarily suspending the dividend at this time.”

The company announced the moves as it reported a second-quarter profit attributable to shareholders of $18.5 million or nine cents per diluted share, up from $6.3 million or three cents per diluted share in the same quarter a year earlier.

Uni-Select Inc. (UNS-T), a Quebec-based distributor of auto paint and after-market parts to collision and repair centres, was down 10.2 per cent after announcing approximately half of its employees are being furloughed and a third of its sites being temporarily closed as a result of the COVID-19 pandemic.

Desjardins Securities analyst Benoit Poirier said: “Bottom line, while the automotive aftermarket industry should perform well during an economic downturn, we believe lockdowns in North America and the UK could result in a slower recovery as car fleets are currently less utilized. We therefore expect UNS’s financial position to deteriorate in the coming quarters and would prefer to remain on the sidelines despite the stock’s attractive valuation.”

Xerox Holdings Corp. (XRX-N) lost 7.1 per cent on the heels of announcing Tuesday it has decided to abandon its US$35-billion hostile cash-and-stock bid for HP Inc. (HPQ-N) after the coronavirus outbreak put the brakes on its takeover campaign.

The decision came after Xerox said earlier this month it would postpone meetings with HP shareholders to focus on coping with the coronavirus pandemic. It is a blow to billionaire investor Carl Icahn, who owns big stakes in both companies and had pushed for their merger.

Xerox’s board concluded that pursuing the takeover without having access to HP’s books, so that it could assess the impact of the coronavirus pandemic on HP’s business, would be too risky, the sources said.

Xerox was set to challenge HP’s board at the latter’s annual meeting of shareholders in May, but will now abandon this effort as well as its tender offer for HP’s shares, the sources added, requesting anonymity ahead of an official announcement.

Shares of HP were 14.5 per cent lower.

Denver-based Whiting Petroleum Corp. (WLL-N) dropped 44.8 per cent after it said on Wednesday it had started Chapter 11 bankruptcy proceeding amid a rout in crude oil prices that has seen fuel plunge to 18-year lows.

The company has more than US$585-million in cash on its balance sheet and will continue to operate its business in the normal course without material disruption to its vendors, partners or employees.

Whiting said it also reached an agreement with some of its creditors to lower its debt levels.

Caterpillar Inc. (CAT-N) dipped 4 per cent in the wake of saying late Tuesday it would withhold annual salary increases for senior executives, managers and salaried employees to contain costs due to the impact of the coronavirus epidemic on its business.

Caterpillar said while it does not yet know the full impact of the economic uncertainty on its business, it needs to act with a “sense of urgency” to respond to this “extremely challenging” situation.

“These decisions are difficult and were not made lightly,” the company said.

As a result, Caterpillar said it will not pay out bonuses to eligible employees next year.

Macy’s Inc. (M-N) slid 9.9 per cent after the S&P Dow Jones Indices said on Tuesday the retailer will be removed from the benchmark S&P 500 stock index, as coronavirus-induced store closures compound the retail sector’s struggles with a shift to online shopping.

The company’s shares have plunged more than 70 per cent so far this year, leaving Macy’s with a market value of US$1.52-billion as of Tuesday’s close, according to Refinitiv IBES data.

“Macy’s has a market capitalization more representative of the small-cap market space,” S&P said, adding that the company would become part of the S&P small-cap 600 index, effective April 6.

Macy’s will be replaced in the S&P 500 by air conditioning company Carrier Global Corp. (CAR-N), which was down 12.5 per cent.

With files from staff and wires

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