A roundup of some of the North American equities making moves in both directions today
On the rise
Aritzia Inc. (ATZ-T) increased after it capped a challenging 2020 by sustaining most of its revenue in the fourth quarter thanks to growth in e-commerce sales despite government-mandated store closures.
The Vancouver-based clothing retailer says revenues were $267.5-million, off just 2.9 per cent from $275.4-million a year earlier, as e-commerce revenues increased 81 per cent in the quarter. It says 39 per cent of its boutiques were closed for a majority of the quarter due to forced lockdowns.
Aritzia earned $16.1-million for the three months ended Feb. 28, down from $21.7-million a year earlier.
Adjusted profits decreased 24.5 per cent to $17.7-million from $23.4-million in the prior year. That translated into 16 cents per diluted share, down from 21 cents per share in the fourth quarter of 2019.
Aritzia was expected to report five cents per share in adjusted profits on $254.1-million in revenues, according to financial data firm Refinitiv.
Osisko Gold Royalties Ltd. (OR-T) was higher after it reported first-quarter net income of $8.3-million, after reporting a loss in the same period a year earlier.
The Montreal-based company said it had profit of 5 cents per share. Earnings, adjusted for non-recurring costs, came to 9 cents per share.
The results topped Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of 8 cents per share.
The mining royalty and exploration company posted revenue of $52.8-million in the period.
Osisko Gold shares have increased slightly more than 7 per cent since the beginning of the year.
Toronto-based Bragg Gaming Group (BRAG-T) rose after announcing before the bell a definitive agreement to acquire Reno, Nev.-based Spin Games LLC in a cash and stock transaction for approximately US$30-million.
“The Transaction offers a compelling strategic and financial rationale and is consistent with Bragg’s previously announced strategy to diversify its revenue from European markets and grow its US operations to capitalize on the growing US and Canadian online casino markets. The Transaction serves to immediately establish Bragg’s US operating footprint setting the foundation for the Company’s growth strategy in the region,” said Bragg in a release.
Intertape Polymer Group Inc. (ITP-T) sat flat with the premarket release of better-than-anticipated first-quarter results on Wednesday.
The Ville St Laurent, Quebec-based packaging company posted revenue of $345.6-million in the period, exceed ingthe Street’s forecast of $314.9-million.
Earnings, adjusted for non-recurring costs, came to 48 cents per share, beating the consensus projection of 36 cents.
Intertape Polymer shares have risen 32 per cent since the beginning of the year. The stock has more than doubled in the last 12 months.
Hut 8 Mining Corp. (HUT-T), a Toronto-based bitcoin miner, rose with the premarket announcement it has applied for a listing of its common shares on the NASDAQ Global Market.
“Since we filed our F-10 in March, we have been continuing to actively move forward with the NASDAQ listing process. We are incredibly excited about what this means for Hut 8 and are proud to pursue the opportunity to join the ranks of global technology companies listed in the U.S.,” said CEO Jaime Leverton.
Domino’s Pizza Inc. (DPZ-N) jumped after billionaire investor Bill Ackman revealed his Pershing Square Capital Management owns about 6 per cent of the company.
Mr. Ackman, whose bets on companies are closely watched, also told the Wall Street Journal he swapped Starbucks Corp. (SBUX-Q) for the pizza chain.
“It’s (Domino’s) a very compelling story and big international growth opportunity ... and there’s plenty of room to run both here and abroad,” Mr. Ackman told the Journal during its Future of Everything Festival event.
On the decline
Crescent Point Energy Corp. (CPG-T) finished lower on Wednesday after it reported a first-quarter profit of $21.7-million compared with a $2.3-billion loss a year ago when oil prices were falling at the start of the pandemic.
The company says the profit amounted to four cents per diluted share for the quarter ended March 31.
Crescent Point lost $4.40 per diluted share a year ago when it took a non-cash impairment charge of $3.56-billion on its oil and gas assets as a result of the drop in energy prices.
Oil and gas sales in the first quarter of this year totalled $630.2-million, up from $584.4 million in the same quarter last year, while average daily production fell to 119,384 barrels of oil equivalent per day, from 141,330 boepd a year ago.
Its average selling price was $58.65 per barrel of oil equivalent, up from $42.64 in the same quarter last year.
Crescent Point says its adjusted earnings from operations for its first quarter totalled $95.1-million or 18 cents per share, up from $48.7-million or nine cents per share in the first three months of 2020.
Bombardier Inc. (BBD-B-T) erased early gains after winning support from bondholders on four of the eight bond issues it was targeting in its move to quash a challenge by an investor who claimed the plane maker’s sale of its train business and other assets breached pledges made under its indenture. It is giving all creditors more time to respond.
Bombardier is locked in a dispute with an unidentified bondholder that claims its recent asset sales, including the divestiture of its train business to France’s Alstom SA, violated covenants on debt maturing in 2034. Analyst Dan Fong of Veritas has called it “a shakedown” by the investor that clouds the company’s turnaround and could lead to a default event in a worst-case scenario.
Bombardier says it believes the allegations are without merit. But to fix the situation, the company approached a wide swath of investors holding eight separate bond issues asking them to approve changes to their covenants to clarify language stating that the asset sales are permitted and to waive any alleged default.
Bondholders who consent to the changes will receive a consent payment from Bombardier worth $1.25 for every $1,000 of principal, except one series of debt due in 2026 that will be paid in Canadian dollars. The entire payout could cost Bombardier US$10-million, Veritas estimates. Creditors had until the end of day Tuesday to agree.
- Nicolas Van Praet
Kinross Gold Corp. (K-T) dropped after saying its net income attributable to shareholders surged in the first quarter due to higher price for the precious metal.
The Toronto-based miner says it earned US$149.5-million or 12 US cents per diluted share for the three months ended March 31, up from US$122.7 million or 10 US cents per share a year earlier.
Kinross says its adjusted profits grew 51 per cent to US$192.8 million from US$127.4-million in the prior year. That translated into adjusted profits of 15 US cents per share, up from 10 US cents per share in the first quarter of 2020.
Revenues were up 12 per cent to US$986.5-million from US$870.8-million.
Kinross was expected to report 16 US cents per share in adjusted profits on US$1.075-billion in revenues, according to financial data firm Refinitiv.
The company produced nearly 558,800 gold equivalent ounces of gold at an all-in sustaining cost per equivalent ounce of US$975. The average realized gold price increased 13 per cent to US$1,787 per ounce, compared with US$1,581 per ounce for the same period in 2020.
Scotia Capital analyst Tanya Jakusconek said: “On the development front, the Tasiast 24k and the La Coipa projects are both on schedule and several studies on its other projects are progressing. The company did announce wall movements in its open pit at Round Mountain mine; this will delay the access to higher-grade Phase W ore and possibly push out the development of the next pushback (Phase S). KGC does not believe this pit wall event will impact its 2021 or longer-term company guidance, nor LOM production at this asset. Round Mountain accounts for 14 per cent of our overall NAV. Although we view the Q1 results as in line, this pit wall movement will likely weigh on the share.”
HudBay Minerals Inc. (HBM-T) was lower after reporting a loss of US$60.1-million in its first quarter.
The Toronto-based company said it had a loss of 23 US cents per share. Losses, adjusted for non-recurring costs, came to 6 US cents per share.
The results did not meet Wall Street expectations. The average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of 4 US cents per share.
The mining company posted revenue of US$313.6-million in the period, which also missed Street forecast of US$350.2-million.
HudBay Minerals shares have risen 32 per cent since the beginning of the year. In the final minutes of trading on Tuesday, shares hit $9.26, nearly quadrupling in the last 12 months.
In a research note, Scotia Capital analyst Orest Wowkodaw said: “HBM reported weaker-than-anticipated Q1/21 results. However, the miss was primarily driven by the timing of sales as production was inline. 2021 production and cost guidance was reaffirmed. Overall, we view the update as a modest negative for the shares on a first look basis. However, we would be buyers on any undue weakness related to the Q1 miss.”
Element Fleet Management Corp. (EFN-T) slid after its first-quarter results narrowly missed expectations on the Street.
Late Tuesday, the Toronto-based company reported earnings per share of 22 cents, up 6.2 per cent year-over-year but a penny below the consensus expectation.
BMO Nesbitt Burns analyst Geoffrey Kwan said: “EFN remains our #1 best idea. Digging beneath the surface, investors should view Q1 positively, driven by the impressive 152 new client wins or existing clients ordering more vehicles/services (cue TLC’s Creep), plus strong Q1 results (excl. F/X), given, on the surface, F/X headwinds (C$ rally up 5 per cent in Q1/21 and up 14 per cent in the past year) and semiconductor shortages tempered Q1 EPS. EFN said customer demand is very strong, so EPS should accelerate as the chip shortage subsides, and any reversal on F/X would be a further tailwind to EPS. With even more evidence of positive momentum in new client wins, which should accelerate revenue/EPS growth, we think EFN can deliver mid-teen EPS CAGR through 2025. We still see significant valuation upside from current levels.”
TMX Group Ltd. (X-T) was down in the wake of announcing it is boosting its dividend by 10 per cent after reporting strong first-quarter results stemming from robust capital markets activity.
The company, which operates the Toronto Stock Exchange, says it will pay 77 cents per common share, an increase of seven cents and the fourth increase in three years. The dividend is payable June 11 to shareholders of record as of close of business on May 28.
TMX also says its first-quarter profit increased 38 per cent to $96.4-million or $1.70 per diluted share, up from $70.1 million or $1.24 per share a year earlier.
The gain followed a 122-per-cent increase in financing dollars raised by Toronto Stock Exchange and TSX Venture Exchange issuers, along with record overall equities trading volumes that were up 50 per cent from the first quarter of last year.
Adjusted profits were $106.4-million or $1.88 per share, compared with $87-million or $1.53 per share in the first quarter of 2020.
In a note, Scotia equity analyst Phil Hardie said: “The quarter once again demonstrated the benefits of TMX’s diversified revenue sources. The growth was fueled by a sharp rebound in financing activity coupled with strong cash equity trading, offset by a weaker revenue contribution from derivatives. Underlying trends at Trayport remained positive with reported revenue rising 10.7 per cent and just under 9 per cent on a local currency basis. Trayport also announced the strategic acquisition of Tradesignal, a German-based software firm that is a leader in rulebased energy trading and analysis solutions. In addition to selling enhance charting and analytics capabilities to its client base, the acquisition will provide a strategic link between Trayport’s algo trading and analytics offerings. The deal is expected to close in Q2/21. Terms were not disclosed.”
Wendy’s Co. (WEN-Q) was narrowly lower after it raised its annual forecast for earnings on Wednesday, betting that its breakfast menu, launched just before the lockdowns were announced last year, will bring in customers as restaurants reopen for dining after restrictions were eased.
The burger chain is readying for customers to return to its restaurants with new launches like a fried chicken sandwich to tackle that of its competition, iced beverages and its popular breakfast offerings.
Wendy’s now expects adjusted earnings to be between 72 US cents and 74 US cents per share and global systemwide sales to grow in the range of 8 per cent to 10 per cent for 2021.
It had earlier forecast earnings between 67 US cents and 69 US cents per share and sales growth between 6 per cent to 8 per cent for the same period.
For the first quarter, U.S. same-store sales rose 13.5 per cent, beating expectations of 9.84 per cent, according to IBES data from Refinitiv.
With files from staff and wires