A roundup of some of the North American equities making moves in both directions today
On the rise
Tilray Inc. (TLRY-Q) soared on Wednesday amid signs the Reddit community behind the recent retail trading frenzy and the GameStop short squeeze is now talking up the cannabis sector..
The cannabis producer has seen a rise in short interest in the past week, with 36.6 per cent of its freefloat out on loan, according to estimates from financial analytics firm Ortex on Wednesday.
The proportion of Tilray shares out on loan amount to 41 million shares, Ortex said, comparing this to stock exchange data for Jan. 29 which showed 30.8 million shares or 27 per cent of the freefloat on loan.
Shares in other pot firms, including Canopy Growth Corp. (WEED-T), Aphria Inc. (APHA-T) and Aurora Cannabis Inc. (ACB-T), were also on the rise.
See also: Wednesday’s analyst upgrades and downgrades
Cameco Corp. (CCO-T) jumped in the wake of beating expectations even as the uranium miner reported that is net income attributable to common shareholders decreased 39 per cent to $80-million in the fourth quarter due to the impact of COVID-19.
The Saskatoon-based company says its profit for the quarter ended Dec. 31 amounted to 20 cents per diluted share, which fell from a profit of 32 cents per diluted share or $128-million a year earlier.
Revenue totalled $550-million, down 37 per cent from $874-million.
On an adjusted basis, Cameco says it had a profit of $48-million, compared with a profit of $94-million from the same time a year earlier.
Cameco had an adjusted profit of 12 cents per diluted share, which fell from a profit of 24 cents per diluted share.
Analysts’ on average had expected revenue of $427.5-million and an adjusted net loss of four cents per share for the quarter, according to financial data firm Refinitiv.
In a research note, Scotia Capital analyst Orest Wowkodaw said: “. CCO released stronger-than-anticipated Q4/20 results. Although limited 2021 guidance was somewhat mixed relative to our expectations, our 8-per-cent NAVPS increased by 5 per cent. Overall, we view the update as positive for the shares.
“CCO shares are rated [sector outperform] based on improving fundamentals. We anticipate growing global decarbonization initiatives to materially increase support for nuclear, which by extension, is positive for uranium. In our view, an inevitable resumption in long-term contracting is likely to serve as a significant catalyst for CCO shares ahead.”
Online demand for Under Armour’s (UAA-N) apparel and accessories, and stronger Asia-Pacific sales helped it post a surprise holiday-quarter profit and top revenue estimates on Wednesday, sending its shares up.
The company said revenue in its Asia-Pacific market jumped 26 per cent, cushioning a sharp decline in its Europe, Middle East, and Africa (EMEA) market, where several stores have been closed due to a resurgence in COVID-19 cases.
While the health crisis has led to a fall in attendance at gyms, it has given people more time to workout at home or opt for outdoor exercises including running and biking, leading to a rise in demand for training shoes, running shorts and t-shirts.
With shoppers still limiting trips outside their homes, a large chunk of that demand has come from people shopping online. Under Armour said its e-commerce sales rose 25 per cent, helping its high-margin direct-to-consumer segment jump 11 per cent.
Overall revenue fell about 3 per cent to US$1.40-billion in the three months ended Dec. 31, but topped a Refinitiv IBES estimate of US$1.27-billion.
Excluding items, Under Armour posted a surprise profit of 12 US cents per share, while analysts were expecting a loss of 7 US cents.
Under Armour also said it expects revenue growth percentage to be in high single-digits in 2021, boosted by growth in its North America as well as international markets, but the forecast fell short of market estimates of a 12.65-per-cent growth.
The apparel and shoes maker also forecast 2021 adjusted profit per share to be between 12 US cents and 14 US cents, in line with estimates.
Lyft Inc. (LYFT-Q) rose after it said late Tuesday it could become profitable on an adjusted basis by the third quarter of this year despite the pandemic, three months ahead of a previous target, forecasting a rebound in ride-hail demand beginning in the second quarter of 2021.
Lyft expects COVID-19 vaccine distribution to scale up in the second quarter, allowing more people to return to pre-pandemic normality, and said its own cost cuts were ahead of target. That will help it achieve a profit.
“Based on the improvements we’ve made, there is a chance we can achieve profitability in Q3. Obviously, pulling in profitability would require a strong summer rebound,” Lyft Chief Financial Officer Nelson Chai said during an investor call, adding the more optimistic outlook should increase investor confidence.
The company reported roughly US$570-million in fourth-quarter revenue, a 44-per-cent decline on a yearly basis, but an uptick of 14 per cent compared with the third quarter. Analysts on average had expected the company to post revenue of US$562-million, according to Refinitiv data.
Lyft reported a loss in adjusted earnings before interest, taxes, depreciation and amortization of US$150-million in the fourth quarter, indicating it must improve to reach its year-end target of adjusted EBITDA profitability. That compares with a US$185-million adjusted EBITDA loss projected by analysts on average.
The smaller-than-expected loss is largely due to Lyft shaving off more costs than originally anticipated, including for software hosting services, payment processing and insurance, John Zimmer, the company’s president, told Reuters in an interview.
Lyft’s number of active riders in the fourth quarter decreased by more than 45 per cent on a yearly basis to 12,552, but revenue per active rider rose by $1 to $45.40 - a record number, the company said.
Lyft shares have recovered from their record lows during the early months of the virus outbreak in the United States and are trading at roughly the same level as a year ago. Shares of larger rival Uber Technologies Inc. (UBER-N ) have gained more than 47 per cent over the past 12 months.
Eli Lilly’ & Co. (LLY-N) was up after its combination antibody therapy to fight COVID-19 was granted emergency use authorization by the U.S. Food and Drug Administration.
Lilly’s combination therapy of two antibodies, bamlanivimab and etesevimab, helped cut the risk of hospitalization and death in COVID-19 patients by 70 per cent, data from a late-stage trial showed in January.
Twitter Inc. (TWTR-N) saw gains as it posted solid results for the last three months of 2020, capping what CEO Jack Dorsey called “an extraordinary year” for the platform. New users signed on in large numbers to follow the world’s events in real time despite the challenges of election misinformation and intensifying calls to ban now former President Donald Trump.
The San Francisco-based company earned US$222.1-million, or 27 US cents per share, in the October-December period. That’s up 87 per cent from US$118.8-million, or 15 US cents per share, a year earlier.
Revenue grew 28 per cent to US$1.29-billion from US$1-billion. Analysts, on average, were expecting earnings of 29 cents per share and revenue of US$1.18-billion, according to a poll by FactSet.
Twitter had 192 million daily users, on average, in the quarter, up 27 per cent year-over-year. By comparison, Facebook had 1.84 billion daily users on average in December 2020, an increase of 11 per cent year-over-year. Twitter does not disclose monthly user figures.
Twitter said it expects 2021 revenue to grow faster than expenses — meaning it would turn a profit — but did not give more specific guidance. And that’s assuming the coronavirus pandemic continues to improve and the company sees a “modest” effect from new privacy changes associated with Apple’s iOS 14.
Apple is preparing to roll out a new privacy control in the early spring to prevent iPhone apps from secretly shadowing people, which could hurt companies that rely on tracking people to show personalized advertisements — like Facebook and Twitter.
Toronto-based Goliath Resources Ltd. (GOT-X) jumped after announcing a non-brokered private placement and strategic investment by Eric Sprott through 2176423 Ontario Ltd. for a total of $2-million, representing a 8.5-per-cent stake in the company.
The offering will consist of 4,189,090 units priced at 55 cents each for gross proceeds of $2.304-million. Each unit will consist of one common share and a warrant to purchase an additional common share at 86 cents for a 24-month period and subject to an accelerator clause.
On the decline
Lightspeed POS Inc. (LSPD-T) was down after announcing its previously announced marketed public offering of subordinate voting shares in the United States and Canada has been increased to 8,400,000 shares.
Lightspeed will issue the shares at US$70 each for aggregate gross proceeds of US$588-million.
See also: Lightspeed and Brookfield Renewable launch large stock sales
Keyera Corp. (KEY-T) dipped after reporting a fourth-quarter headline miss before the bell.
The Calgary-based energy company announced adjusted EBITDA of $168-million, down 36 per cent year-over-year and below the expectation on the Street ($178-million). Earnings per share of 34 cents also fell short of the consensus (26 cents), due largely to a $123-million impairment charge from shuttered gas plants.
ATB Capital Markets analyst Nate Heywood said: “Overall, we view the results as marginally negative given the modest miss to EBITDA and increased capital cost estimate to KAPS; however, the core business continues to operate well. The miss is largely a result of a $12-million realized hedging loss in the Marketing segment; however, management expects to more than offset the loss of unsold inventory in Q1/21. The KAPS project’s capital costs have been revised higher by 23 per cent, or $150-million net to Keyera, due to a competitive construction environment. 2021 guidance remains unchanged and Keyera is well positioned to benefit from a recovering propane/condensate outlook in 2021.”
Precision Drilling Corp. (PD-T) was lower after reporting better-than-anticipated fourth-quarter financial results before the bell on Wednesday.
The Calgary-based company announced revenue of $202-million, down 46 per cent year-over-year but above the consensus projection of $196.5-million. Earnings per share of a loss of $2.74 fell from an 8-cent loss a year ago, but the result also beat expectations (a loss of $3.09).
ATB Capital Markets analyst Waqar Syed said: “For PD, we highlight its 1) Debt reduction, which totaled $171-million in 2020, with a target of $100-million-$150-million in 2021; 2) Continued market penetration and commercialization of its Alpha suite of technologies; and 3) Continued focus on ESG performance. While the operational results were better than expected, the stock is up 53 per cent year-to-date also, which means the hurdle for outperformance was high coming into the quarterly results. We continue to like PD’s position in its key markets and maintain our Outperform rating, but forward guidance may determine how the stock reacts today.”
WildBrain Ltd. (WILD-T) fell after saying it earned a second-quarter profit of $11.3-million compared with a loss in the same quarter a year earlier as its revenue improved.
The children’s entertainment company, formerly known as DHX Media, says the profit amounted to seven cents per share for the quarter ended Dec. 31. The profit compared with a loss of $2.3-million or two cents per share in the same quarter a year earlier.
Revenue totalled $142.3-million, up from $122.1-million.
WildBrain said the increase in revenue came as content production and distribution revenue more than doubled to $68.5-million compared with $34.1-million a year earlier, boosted by an expanding slate of new Peanuts content as well as the licensing of the Peanuts library of classic specials to Apple.
WildBrain Spark revenue for the second quarter was $15.5-million, up from $8.9-million in the first quarter, but down from $24.2-million a year earlier.
General Motors Co. (GM-N) lost ground after it reported a higher-than-expected fourth-quarter profit on strong demand for trucks and SUVs during the COVID-19 pandemic but forecast weaker-than-expected 2021 results citing a shortage of chips used in car production.
The automaker expects a chip shortage to trim US$1.5-billion to US$2.0-billion from its 2021 operating profit. It forecast a range of $10.0 billion to US$11.0-billion, or US$4.50 to US$5.25 a share. Analysts had expected US$5.89, according to Refinitiv data.
The global chip shortage also will have a short-term impact on production and cash flow, the company said.
GM said it expects to accelerate spending on electric and autonomous vehicles in 2021. Projected capital expenditures this year are US$9.0-billion to US$10.0-billion, including more than $7.0 billion for EVs and AVs.
GM said it earned US$2.8-billion, or US$1.93 a share, compared with a loss of US$194-million, or 16 US cents a share, in the prior year.
For the full year, GM earned US$6.4-billion, down from US$6.7-billion in 2019.
See also: GM extends vehicle-production cuts due to global semiconductor shortage
Opinion: GM’s switch to electric vehicles is part hype, part hope
Coca-Cola Co. (KO-N) closed lower after it forecast a return to organic revenue growth this year after a pandemic-hammered 2020 and beat Wall Street estimates for quarterly profit on aggressive cost cutting.
The health crisis has accelerated the soda maker’s efforts to trim hundreds of its underperforming brands and shift toward popular products such as sparkling waters and zero-sugar sodas, while also influencing a major restructuring that included thousands of job cuts.
“The progress we made in 2020, including the actions taken to accelerate the transformation of our company, gives us confidence in returning to growth in the year ahead,” Chief Executive Officer James Quincey said in a statement.
For 2021, the company expects adjusted earnings to grow in the high-single digits to low-double digits and organic revenue to rise in the high-single digits.
Organic revenue declined 9 per cent last year, as pandemic-related curbs closed the doors of non-retail channels such as restaurants, cinemas and sporting events that account for over a third of the company’s sales.
Meanwhile, the company warned it expects a liability of about US$12-billion related to a dispute with the U.S. Internal Revenue Service (IRS) on how much it charged foreign affiliates for the rights to make and sell Coke products abroad.
The U.S. Tax Court sided with the IRS in November, but Coca-Cola said it “intends to vigorously defend its position” even as the company recorded a tax reserve of US$438-million for the year ended Dec. 31.
Net revenue fell 5 per cent to US$8.60-billion in the three months ended Dec. 31, just short of expectations of $8.63 billion, according to IBES data from Refinitiv.
On a per share basis, the Atlanta-based company earned 47 US cents per share, 5 US cents more than estimates.
With files from staff and wires
:format(jpeg)/s3.amazonaws.com/arc-authors/tgam/22e5b2bb-e40b-466f-8553-53903a594987.JPG)
David Leeder