A roundup of some of the North American equities making moves in both directions today
On the rise
Intact Financial Corp. (IFC-T) was up 0.3 per cent upon the resumption of trading after announcing it has entered into a definitive agreement with Princeton Holdings Ltd. to acquire The Guarantee Company of North America and Frank Cowan Company Ltd. for a cash consideration of approximately $1-billion
The transaction is expected to close in the fourth quarter of 2019, subject to regulatory approvals.
“In Canada , the acquisition bolsters Intact’s position and adds new products for the high net worth customer segment,” the company said. “It meaningfully advances Intact’s North American specialty lines platform solidifying prominent positions in public entity and surety. The transaction will also contribute to additional distribution-related earnings.”
U.S. retail giant Walmart Inc. (WMT-N) was up 6.1 per cent after reporting better-than-expected second-quarter U.S. comparable sales, and boosting its earnings forecast for the year.
Sales at U.S. stores open at least a year rose 2.8 per cent, excluding fuel, in the quarter, exceeding the consensus projection on the Street of 2.07 per cent.
J.C. Penney Co Inc. (JCP-N) was up 1.8 per cent despite reporting a steeper-than-expected drop in quarterly comparable-store sales before market open on Thursday, as the struggling department store operator stopped selling appliances and furniture in its stores.
The Plano, Texas-based company said sales at stores open for at least 12 months fell 9 per cent in the second quarter ended Aug 3. Excluding the impact of the businesses it exited, comparable sales decreased 6 per cent, which fell short of the 5.15-per-cent expectation on the Street
“We still have work to do on our topline,” Chief executive Officer Jill Soltau said.
Shares of Hudson’s Bay Co. (HBC-T) finished up 0.1 per cent after the special committee of the board issued a statement Thursday morning commenting on the amended unsolicited offer made on Aug. 7 to shareholders by the Catalyst Capital Group Inc. to acquire up to 19,782,393 common shares of the company for $10.11 per common share in cash.
The special committee reiterated its advice to shareholders to "exercise caution regarding a decision to tender to the amended Catalyst offer.
On the decline
Canopy Growth Corp. (WEED-T) plummeted 14.5 per cent after reporting after the bell on Wednesday its quarterly revenue fell to $90.5-million, down 4 per cent from the prior quarter and well below analyst expectations.
Paramount Resources Ltd. (POU-T) dipped 1.3 per cent after agreeing to purchase oil-sands assets from a conglomerate run by the wealthy Koch brothers for an undisclosed sum following halted attempts to develop projects.
Koch Industries Inc. transferred five oil-sands leases to Cavalier Energy, which is the oil-sands unit of Calgary-based Paramount, according to the Alberta Energy Regulator (AER).
Birchcliff Energy Ltd. (BIR-T) fell almost 9.1 per cent after it reported after the bell on Wednesday a net loss to common shareholders of $9.5-million or 4 cents per share as compared to the net income to common shareholders of $6.4-million or 2 cents per share a year ago. Revenue was $139.9-million down from $150.6-million a year earlier. Analysts were expecting revenue of $143.8-million.
AltaCorp Capital analyst Patrick O’Rourke said: “Overall, we view the event as neutral. Reported results continue to be very consistent, with the Company putting up both slight cash flow and production beats of consensus expectations, and most notably liquids cuts ahead of forecast. The Company also chose to increase capital expenditure for 2019, positioned as a pull forward of 2020 planned spending, allowing the Company to benefit from a more consistent production profile which better captures expected stronger winter gas prices and improved capital efficiencies. Although we fully understand and agree with the thought process from management and the benefits to the business, we are cautious when it comes to the market reaction to any increase of capital spending during the current reporting cycle.”
Labrador Iron Ore Royalty Corp. (LIF-T) sat 1.4 per cent lower after it reported second-quarter royalty revenue amounted to $52.6-million as compared to $5.1-million for the second quarter of 2018. Equity earnings from IOC [Iron Ore Company of Canada] amounted to $33.9-million or 53 cents per share in the second quarter as compared to a loss of $6.1-million or 9 cents per share in the second quarter of 2018, the company stated.
Shares of Cisco Systems Ltd. (CSCO-Q) were down about 8.6 per cent after the company said it expects profit in the current quarter to come in below market forecasts as it struggles to transition to a software-focused company from its traditional business of selling routers and switches.
Citi analyst Jim Suva said: “Wednesday night Cisco reported July quarter sales that beat expectations and at the same time guided below consensus as the company cited a slowdown in macro spending as well as softness in service provider spending. We do not believe this will be a long term negative as the company is proactively managing expectations and has a record of delivering on its outlook and not missing unlike other companies. We are reducing our sales and EPS forecast which results in our lower target price to $57 from $65 previously and we would use any stock pull-back as an enhanced buying opportunity, as at some point service provider spending and macro data should turn more favorable and expectations are now reset lower.”
General Electric Co. (GE-N) shares fell as much as 15 per cent after the Wall Street Journal reported that Harry Markopolos, a whistleblower in the Bernard Madoff Ponzi case, had alleged that company financial filings masked the depths of its problems.
In a 175-page report, Markopolos accused GE of hiding US$38.1-billion in potential losses and asserted that the company’s cash situation was far worse than it had disclosed.
“GE’s true debt to equity ratio is 17:1, not 3:1, which will undermine its credit status,” Markopolos said.
With files from Brenda Bouw, Terry Weber, staff and wires
David Leeder