A roundup of some of the North American equities making moves in both directions today
On the rise
The Montreal-based bank says it earned $44.8-million or 96 cents per diluted share for the quarter ended Jan. 31, up from a profit of $32.2-million or 68 cents per diluted share a year ago.
Revenue totalled $247.4-million, up from $238.7-million in the year earlier quarter.
The provision for credit losses totalled $16.8-million for the quarter up from $14.9 million a year earlier, due to a rise in allowances on impaired commercial loans.
On an adjusted basis, Laurentian says it earned $1.03 per diluted share for its most recent quarter, up from an adjusted profit of 79 cents per diluted share a year earlier.
The average analyst estimate had been for an adjusted profit of 74 cents per share, according to financial data firm Refinitiv.
The Edmonton-based company reported revenue and earnings per share of $876.1-million and 87 cents, respectively, exceeding the Street’s projections of $866.8-million and 52 cents.
In a research report, Canaccord Genuity analyst Luke Hannan said: The company’s focus on managing its balance sheet continues to pay off, with net debt/EBITDA improving to 1.3 times, down from 1.6 times as of Q3/20, suggesting ample capacity for acquisitions.
“Importantly, management disclosed details regarding the strategy for its Used Digital Retail Division. The company expects to sell over 20,000 used cars through the division within its first 18 months, at first developing a used car superstore network and eventually introducing a digital platform overlay. The division is structured as part of a series of partnerships. Paul Antony, the Executive Chairman, will hold 15 per cent of the Limited Partner interests, while up to 24 per cent of the Limited Partner interests will be held for vendor and employee options while the rest is held by AutoCanada, the general partner.”
Las Vegas Sands Corp. (LVS-N), founded by late billionaire and casino mogul Sheldon Adelson, jumped in the wake saying on Wednesday it would sell its Vegas properties for about US$6.25-billion to focus on Asia, home to the world’s largest gambling hub, Macau.
The sale comes just two months after the death of Mr. Adelson, who transformed Las Vegas Sands into the world’s largest casino and filled his gambling hubs with trendy restaurants and shops, making them luxury destinations for business travelers and tourists alike.
The gambling industry, which thrives on air travel and large groups of people in close proximity, has been one of the hardest hit amid the ongoing COVID-19 pandemic.
Las Vegas Sands said the deal underscores its strategy of reinvesting in its Asian operations, with a focus on Macau and Singapore. Macau and Singapore accounted for 48 per cent and 35 per cent of total revenue in 2020, respectively, according to Refinitiv Eikon data.
Las Vegas Sands in January named long-time company executive Robert Goldstein chief executive officer, replacing Adelson who died at 87.
Founded in 1990, Las Vegas Sands also owns the world-renowned Marina Bay sands in Singapore and has developed the largest portfolio of properties on the Cotai Strip in Macau.
Crafts retailer Michaels Companies Inc. (MIK-Q) soared after saying on Wednesday it had entered into an agreement to be bought by private equity firm Apollo Global Management (APO-N) for US$3.3-billion.
The private equity firm will pay Michaels shareholders US$22 per share, a 46.7-per-cent premium to the stock’s close on Friday, before the New York Times first reported a potential deal.
Michaels shares have risen over 340 per cent in the last year as its business boomed from people taking up hobbies while staying at home due to the COVID-19 pandemic.
The total deal value is US$5-billion, Michaels said.
Exxon Mobil Corp. (XOM-N) was up after pitching investors with plans to grow its dividend and curb spending after ambitious growth plans and the Covid-19 pandemic led the top U.S. oil and gas producer to a historic annual loss last year.
Investor pressure has mounted for Exxon to cut costs, improve financial returns and better prepare for the energy transition to lower-carbon fuels.
Ahead of its investor day presentation, the company reaffirmed plans to keep project spending between US$16-billion and US$19-billion in 2021, and between US$20-billion and US$25-billion a year through 2025.
It expects output to remain flat at around 3.7 million barrels of oil and gas per day through mid-decade as it focuses on boosting cash flow instead.
Prior to the pandemic, and to the dismay of many investors, Chief Executive Darren Woods promised to “lean in” on spending as much as US$35-billion per year on projects. The company made costly misfires in recent years by overspending on shale and oil sands projects that it later wrote down.
But after the pandemic slashed energy demand, Exxon cut spending by nearly a third - reducing the value of its shale gas properties by more than US$20-billion - trimmed workers, and added debt to cover spending.
U.S. discount retailer Dollar Tree Inc. (DLTR-Q) rose despite missing market estimates for holiday-quarter sales on Wednesday as competition from big-box retailers increased, while demand for party supplies came under pressure due to the COVID-19 pandemic.
Analysts have said sales at dollar stores have come under pressure, with people increasingly wanting to buy everything from cheap toilet paper to higher-priced electronics under one roof due to fears of catching the new coronavirus.
Dollar Tree, which plans to renovate 1,250 Family Dollar stores and open 600 new outlets under the two banners, stopped short of providing an outlook for fiscal 2021.
Same-store sales at its namesake unit increased 2.4 per cent in the fourth quarter ended Jan. 30, well below Wall Street expectations of a 4.37-per-cent rise, even as its Family Dollar segment topped estimates.
Net income rose over 300 per cent to US$502.8-million, or US$2.13 per share, as Dollar Tree had taken a US$313-million goodwill impairment charge last year.
Analysts on average had estimated a profit of US$2.11 per share.
Net sales rose 7.2 per cent to US$6.77-billion but missed estimates of US$6.79-billion, according to IBES data from Refinitiv.
On the decline
TransAlta Corp. (TA-T) was lower after saying it has set a goal to be carbon neutral by 2050 after cutting greenhouse gas emissions to 60 per cent below 2015 levels by 2030.
The Calgary-based utility company is in the process of retiring its Edmonton-area thermal coal mining operations and converting all of its coal power generation in Canada to natural gas by the end of 2021, while eliminating its coal generation at a facility in Washington State by the end of 2025.
In a news release, retiring CEO Dawn Farrell says 2020 was a “pivotal year” for TransAlta, noting that it completed its first coal-to-gas Alberta power plant conversion.
She says the company cut an additional 4.2 million tonnes of greenhouse gas emissions compared with 2019 and deployed 77 megawatts of net wind and energy storage while continuing to build affiliate TransAlta Renewables Inc.
TransAlta reported a fourth-quarter net loss of $167 million on revenue of $544 million for the three months ended Dec. 31, compared with a net profit of $66 million on $609 million in the same period of 2019.
Analysts had expected a loss of $102 million on revenue of $492 million, according to financial data firm Refinitiv.
ATB Capital Markets analyst Nate Heywood said: “Overall, we view the event as neutral as the slight miss in the print will likely be offset by the strong outlook for 2021. "
TransAlta Renewables Inc. (RNW-T) was also down following a slight fourth-quarter beat.
Mr. Heywood said: “Overall, we view the update as neutral to slightly positive given that the print was modestly above expectations and the 2021 financial guidance was in line with our current estimates. The quarter was supported by strong renewable (hydro & wind) resource and cash flow improvements from new assets. Looking to 2021, the business should benefit on a year-over-year basis due to the material acquisitions made in 2020, including the 303 MW dropdown from TransAlta (TA-T). After meeting 2020 guidance, the Company is guiding towards 2021 Comparable EBITDA of $480-$520-million, providing a guidance midpoint that is 8 per cent higher than the 2020 results.”
Nordstrom Inc. (JWN-N) slipped despite reporting better-than-expected results for the holiday quarter, aided by a rise in e-commerce sales and growth in its off-price business, Rack.
Pandemic-induced declines in household income and high unemployment rates have led to a spike in demand for affordable clothing, which boosted Rack’s business for Nordstrom that also benefited from a greater shift to online shopping.
Sales at Nordstrom Rack decreased 23 per cent from a year earlier, but were better than previous quarter’s 32-per-cent slump, while digital sales of about US$2-billion accounted for 54 per cent of the retailer’s business.
The retailer said overall trends improved sequentially throughout the quarter, with improvements in both Nordstrom and Rack.
Nordstrom, like other retailers, has been investing heavily on e-commerce, as consumers shift to shopping online in the wake of the health crisis.
The retailer reiterated its revenue forecast and said it will grow more than 25 per cent this year, with digital accounting for half of the sales and its plans to increase the items it offers to more than 1.5 million from roughly 300,000.
“There is no denying that their (Nordstrom) Q4 results were impacted, as fewer consumers go to offices and formal events,” said Hilding Anderson, head of retail strategy at consulting firm Publicis Sapient.
General Motors Co. (GM-N) was down after saying on Wednesday it was further extending production cuts at three North American plants and adding a fourth to the list of factories hit by the global semiconductor chip shortage.
The extended cuts do not change GM’s forecast last month that the shortage could shave up to US$2-billion from this year’s earnings. GM Chief Financial Officer Paul Jacobson subsequently said chip supplies should return to normal rates by the second half of the year and he was confident the profit hit would not worsen.
The U.S. automaker did not disclose the impact on volumes or say which supplier or parts were affected by the chip shortage, but said it intends to recover as much of the lost output as possible.
“GM continues to leverage every available semiconductor to build and ship our most popular and in-demand products, including full-size trucks and SUVs,” GM spokesman David Barnas said. “We contemplated this downtime when we discussed our outlook for 2021.”
The chip shortage, which has hit automakers globally, stems from a confluence of factors as carmakers, which shut plants for two months during the COVID-19 pandemic last year, compete against the sprawling consumer electronics industry for chip supplies.
Chipmaker Micron Technology Inc. (MU-Q) was down after saying it is raising its revenue, gross margin and earnings per share forecast for the second quarter, which ends March 4.
The Boise, Idaho-based company has seen greater demand for its chips with a global shift to remote work due to the COVID-19 pandemic and a recent uptick in 5G smartphone adoption.
Micron now expects revenue to be in the range of US$6.20-billion to US$6.25-billion, from a previous forecast of US$5.6-billion to US$6-billion. Analysts, on average, were expecting revenue to be US$5.86-billion, according to Refinitiv IBES data.
The company also said it expects adjusted earnings to be between 93 US cents per share and 98 US cents per share, from a previous range of 68 US cents per share to 82 US cents per share.
Micron is expected to delve deeper into demand drivers at a Morgan Stanley conference later in the day.
With files from staff and wires