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

On the rise

Grocery retailer Empire Company Ltd. (EMP-A-T) was up with the release of its quarterly results before the bell.

The company, which owns grocery chains including Sobeys, Safeway, IGA, FreshCo and others, reported same-store sales growth of 10.7 per cent in the third quarter, not including fuel sales. (This is an important metric in retail, which shows sales growth not related to store openings or closings.) Fuel sales at its locations with gas stations continued to be down.

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Empire reported overall sales of $7-billion in the 13 weeks ended Jan. 30, 2021, up from $6.4-billion in the same period the prior year.

In its upcoming fourth quarter, like other retailers, Empire will begin seeing results compared with a period last year when the pandemic had begun to affect buying patterns across Canada. While the first five weeks of its fourth quarter have seen 9 per cent same-store sales growth, not including fuel sales, that level of growth is “unlikely to be sustained” through the rest of the quarter, a release from the company said on Wednesday.

- Susan Krashinsky Robertson

Stella-Jones Inc. (SJ-T) jumped with the premarket release of a better-than-expected fourth-quarter results, an encouraging 2021 outlook and a 20-per-cent dividend increase.

The Quebec-based producer of industrial pressure-treated wood products reported revenue of $533-million, up 21 per cent year-over-year and exceeding the Street’s forecast of $460-million. EBITDA rose 19 per cent to $70-million, also exceeding the consensus ($62-million), while adjusted earnings per share of 52 cents was 10 cents higher than anticipated.

Stella-Jones said it expects full-year 2021 EBITDA of $385-$410-million, topping the Street’s $377-million prediction due to solid demand for utility poles and residential lumber.

Its quarterly dividend jumped to 18 cents per share.

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In a research note, Desjardins Securities analyst Benoit Poirier said: “We are very pleased with the solid results for the quarter, which again demonstrate the company’s resiliency in the midst of the COVID-19 pandemic and its ability to deliver strong EBITDA and EPS growth. The bullish guidance for 2021 is also testament to that. Increases to the dividend and NCIB program further support our positive stance on the name.”

Vancouver-based GT Gold Corp. (GTT-X) soared after announcing a deal to be acquired by Newmont Corp. (NGT-T).

Newmont has agreed to acquire all of the outstanding shares of GT Gold that it does not already own for $3.25 per share in cash, representing a 60-per-cent premium to Tuesday’s close.

The total equity value of the transaction is $456-million on a fully diluted basis.

Nuvei Corp. (NVEI-T) gained ground with the release of better-than-anticipated fourth-quarter results.

Before the bell, the Montreal-based electronic payment processing company said revenue rose 46 per cent year-over-year to $115.9-million, topping the Street’s $109.7-million estimate. Earnings per share of 33 cents also topped expectations (by 10 cents).

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Nuvei is projecting 2021 revenue of $570-million to $600-million. The Street was forecasting $471.7-million.

ConocoPhillips (COP-N) was higher after it announcing it has resumed its US$1.5-billion annualized share repurchase program, but does not plan to raise its spending even though oil prices have risen above US$70 a barrel this week.

Despite the uptick in oil prices, oil companies are largely expected to maintain their capital expenditure or raise it only marginally as investors, frustrated with low returns from the sector, reward companies showing capital discipline.

“We believe this market will favor companies who demonstrate sustainable discipline and strong free cash flow generation with a track record of predictable returns of capital,” Chief Executive Officer Ryan Lance said.

ConocoPhillips said it does not intend to increase its previously announced operating capital program of US$5.5-billion.

The company added its buyback program was 50 per cent higher than the level of repurchases in the fourth quarter of 2020, when the program was suspended due to its deal to buy Concho Resources.

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Campbell Soup Co. (CPB-N) gained after forecasting annual earnings growth as its cost-saving measures pay off, while sales are likely to fall as COVID-19 vaccine rollout speeds up and customers return to restaurants.

While Campbell’s costs have risen due to pandemic-related and labor expenses, higher raw material costs and increased marketing spend, the company said it was on track to save US$850-million by the end of fiscal 2022.

It forecast adjusted earnings between US$3.03 and US$3.11 per share for fiscal 2021, compared with analysts’ average estimate of US$3.03 per share, according to IBES data from Refinitiv.

“Nearly 75 per cent of our brands grew or held share which was an important goal for the quarter... we are confident in the long-term growth potential of Campbell,” Chief Executive Officer Mark Clouse said.

Campbell sales, which surged during the second half of its fiscal year 2020 as consumers stocked up on snacks and soups before lockdowns were put in place, are expected to fall 3.5 per cent to 2.5 per cent this year, the company said.

Second-quarter sales rose 5.4 per cent to US$2.28-billion, but fell below expectations, hurt by declines in its foodservices segment that sells products to bakeries and restaurants, and pandemic-led supply constraints.

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On an adjusted basis, the company earned 84 US cents per share, meeting expectations.

On the decline

The world’s two largest aircraft leasing companies are combining to create a new financing giant after Ireland’s AerCap (AER-N) finalized a deal worth more than US$30-billion to buy the leasing unit of General Electric (GE-N).

In New York, shares of both companies slid in the wake of announcing a deal on Wednesday after days of speculation surrounding the takeover of GE’s leasing arm GECAS to create a portfolio of more than 2,000 jets, dwarfing industry rivals.

The tie-up creates easily the largest buyer of jetliners built by planemakers Airbus and Boeing and will reshape a global air finance industry that has attracted a flood of capital in recent years as investors elsewhere look for higher returns.

But it comes at a time when the independence of several leasing firms has been brought into question by the coronavirus crisis and could trigger more consolidation, analysts say.

The deal to buy GECAS, or GE Capital Aviation Services, includes about US$24-billion in cash and US$1-billion paid in AerCap notes and/or cash upon closing. GE will hold a stake of about 46 per cent in the combined company.

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It marks the latest move by GE Chief Executive Larry Culp to reduce debt and focus the conglomerate on its industrial core - power, renewable energy, aviation, and healthcare.

Ballard Power Systems Inc. (BLDP-T) reversed course and fell after announcing Canadian Pacific Railway Ltd. (CP-T) will use it fuel cell modules for its Hydrogen Locomotive Program.

The modules will provide a total of 1.2 megawatts of electricity to power the locomotive.

Canopy Growth Corp. (WEED-T) declined after saying it is laying off 75 staff in North America following a global strategic review.

A spokesman for the cannabis firm based in Smiths Falls, Ont., said most of the people affected work at Canopy’s headquarters.

The spokesman said in an email Tuesday that employees at its Denmark production facility have also been informed of a proposal to cease operations at the site in that country based on the company’s ability to serve global medical markets with existing Canadian production.

Under Danish law, a consultation period will now take place before any final decision is made.

The spokesman said the layoffs and the proposal related to the Denmark facility are important elements in aligning the company with market demand and its path to profitability in the coming fiscal year.

Last month, Canopy said profitability was on the horizon following a restructuring that included the elimination of up to 1,000 workers.

Hilton Grand Vacations Inc. (HGV-N) was lower after it said on Wednesday it would buy Diamond Resorts International Inc. from funds managed by affiliates of Apollo Global Management Inc. (APO-N), Reverence Capital Partners and other stockholders in an all-stock deal for about US$1.4-billion.

As per the terms of the deal, Apollo Funds and other Diamond stockholders would get 34.5 million shares of Hilton Grand Vacations’ common stock, subject to customary adjustments.

Hilton Grand Vacations, which was spun out of hotel operator Hilton Worldwide Holdings Inc. (HLT-N) in 2017, said the combined company will have 720,000 owners, 154 resorts and 48 sales centers.

The deal is expected to close in the summer of this year, the company said.

With files from staff and wires

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