A roundup of some of the North American equities making moves in both directions today
On the rise
Shares of Apple Inc. (AAPL-Q) jumped 4.8 per cent on Wednesday in the wake of exceeding investor expectations with its first-quarter financial results and providing an optimistic view of its growth in China.
“Simply put Apple’s results and outlook across most metrics were clearly better than expected,” said Citi analyst Jim Suva in a research note in which he laid out reasons to believe the U.S. tech giant’s trillion dollar market cap “can go higher.”
“Yes, RCI reported weak 1Q results, and for a stock that was recently priced for perfection, the reaction by investors was swift,” said Maher Yaghi. “We do not have a crystal ball, and we cannot be certain if these results will carry into 2Q."
The Toronto-based miner reported revenue and earnings per share of $334-million and 17 cents, exceeding the Street’s expectation of $251.8-million and 7 cents.
Curaleaf Holdings Inc. (CURA-CN) was up 13.2 per cent after announcing the acquisition of Cura Partners Inc, which owns the Select wholesale cannabis brand, in an all-stock transaction valued at $1.27-billion.
The Massachusetts-based company said the deal includes Select’s manufacturing, processing, distribution, marketing and retailing operations and all adult-use cannabis products marketed under the Select brand name, including all intellectual property.
“The highly complementary acquisition brings together two of the strongest cannabis brands, Curaleaf and Select, to offer a full-range of products across the U.S,” the company said in a release. “The combination will provide immediate geographic diversification with Curaleaf’s footprint on the East Coast and Select’s brand strength on the West Coast.”
On the decline
Advanced Micro Devices Inc. (AMD-Q) erased early gains and finished 3 per cent lower after its quarterly revenue and profit beat Wall Street estimates as it sold more chips in data centers and servers.
Before market open, the uranium miner announced a loss of $18.3-million, down from a $57.8-million profit during the same period a year ago. Revenue fell to $297.5-million from $439.4 -million.
“Our results reflect the outlook we provided for 2019 and the normal quarterly variation in contract deliveries, which are weighted to the second half of the year,” said president and CEO Tim Gitzel.
“2018 ended with a lot of moving pieces, and that hasn’t changed through the first quarter. In fact, a number of pieces have been added. Despite this, we continue to execute on our strategy to add long-term value, doing what we said we would do.”
The grocery and drugstore retailer announced a profit attributable to common shareholders of $198-million or 53 cents per share. That compared with a profit of $377-million or 98 cents per share a year ago.
Revenue came in at $10.66-billion, up from $10.34-billion, as its food retail business saw same-store sales growth of 2.0 per cent. Its drugstore same-store sales growth, which includes its Shoppers Drug Mart business, was 2.2 per cent as pharmacy same-store sales growth was 1.2 per cent and front store same-store sales growth was 3.1 per cent.
On an adjusted basis, Loblaw says it earned a profit from continuing operations attributable to common shareholders of 78 cents per share, down from 81 cents in the same quarter last year.
Excluding an accounting change related to its leases and a change related to the spin-out of the company’s stake in Choice Properties, Loblaw says it earned an adjusted profit of 84 cents per share in its most recent quarter.
The Toronto-based REIT said it as entered into an agreement to sell 22,815,000 trust units on a bought deal basis at a price of $13.15 each.
The REIT was featured in John Heinzl’s Yield Hog column on Wednesday.
Its net loss was $89.5-million or 71 cents per share, versus net income of $112.2-million or 87 cents a year ago. Its adjusted loss was 29 cents per share versus a profit of $1.13 per share a year ago.
Analysts were expecting revenue of $1.16-billion and a loss of 24 cents per share in the first quarter of 2019.
On Monday, Canfor announced it will reduce output by approximately 100 million board feet spread across its B.C. mills. because of low lumber prices and the high cost of wood supplies.
“While our BC based lumber business experienced significant challenges due to lower than anticipated market prices and difficult operating conditions, our US South and European operations generated solid financial returns,” said president and chief executive officer Don Kayne. “We look forward to adding a further 200 million board feet to our US South operations during the second quarter with the upcoming close of the Elliott acquisition, which will help offset the escalating log cost and fibre supply issues impacting our BC operations."
“We look forward to adding a further 200 million board feet to our U.S. South operations during the second quarter with the upcoming close of the Elliott acquisition, which will help offset the escalating log cost and fibre supply issues impacting our B.C. operations.”
Canadian Natural Resources Ltd. (CNQ-T) was down 3.2 per cent after cutting its May and June production expectations in reaction to to ongoing maintenance requited on one of its oil sands upgrader at its Albian mines in Alberta after an April fire.
“The planned 38 day turnaround at the Scotford Upgrader is targeted for April and May 2019, during which time the South Upgrader will run at a restricted gross processing rate of approximately 200,000 bbl/d of SCO,” the company said. “Upon completion of the planned maintenance, May and June average gross production at the Albian mines is targeted to be approximately 245,000 bbl/d versus the Company’s previously targeted gross curtailment production volumes at the Albian mines of approximately 255,000 bbl/d. The Company continues to optimize other assets in Alberta to mitigate the impacts of curtailment on its production.”
Rocky Mountain Dealerships Inc. (RME-T) dipped 4 per cent after it reported first-quarter sales of $177.7-million compared with $219.7-million for the same period in 2018, due primarily to “a decline in same-store new equipment sales for the quarter as we limit presale activity and focus on distributing existing inventory.”
Analysts were expecting revenue of $236-million in the latest quarter.
- Brenda Bouw
AltaCorp Capital analyst Thomas Matthews said: “Overall, we view the results as incrementally positive, as Whitecap beat consensus cashflow by 3 per cent ($161.2-million vs 156.7-million), while beating production estimates by 2 per cent (70.7 mboe/d vs 69.5 mboe/d). In addition, Whitecap also announced a 5.6-per-cent dividend increase to $0.0285 per share ($0.342 per share annualized), resulting in a current dividend yield of 6.4%. Whitecap stressed that the recent improvements to pricing would not translate to a budget increase, and as such has maintained capex guidance at $425-$475-million with average production guidance for 2019 remaining at 70-72 mboe/d. Overall, with the dividend bump strengthening shareholder returns, strong Q1 operations which should set Whitecap up to meet the high end of their guidance in 2019. With a disciplined approach to use free cash to pay down debt instead of deploy more capital to the drill bit, we believe Whitecap’s disciplined approach should be well received by the equity markets.”
With files from staff and wires