A roundup of some of the North American equities making moves in both directions today
On the rise
Aecon Group Inc. (ARE-T) jumped 7.1 per cent on Friday in the wake of the release of better-than-anticipated first-quarter results after the bell on Thursday.
The Calgary-based construction company reported revenue of $650-million and adjusted EBITDA of $10-million, both exceeding the consensus expectations on the Street ($523-million and $1-million, respectively). Adjusted diluted earnings per share of a 16-cent loss also topped estimates (34-cent loss).
In a research note released Friday, Desjardins Securities analyst Benoit Poirier said: “Overall, we are pleased with the performance of both [the Construction and Concession] segments, which contributed to solid results in a seasonally low quarter. From a trading perspective, we expect the stock to react positively this morning given the attractive valuation (ARE is currently trading at an EV/FY1 EBITDA of 3.9 times vs 5.0 times for Canadian peers and 6.9 times for U.S. peers), reiterated 2019 guidance and robust backlog.”
EnWave Corp. (ENW-X), Vancouver-based advanced technology company, jumped 14 per cent after announcing a $10-million “strategic investment” from Aurora Cannabis Inc. (ACB-T).
The companies also announced a “royalty-bearing commercial license agreement” providing Aurora with the exclusive rights to EnWave’s patented Radiant Energy Vacuum drying technology for the production of cannabis materials in the European Union, excluding Portugal.
Shares of Aurora were down 0.6 per cent.
Amazon.com Inc. (AMZN-Q) shares rose 2.5 per cent after the online retail giant posted first-quarter profit far ahead of market forecasts.
Amazon’s first-quarter net income more than doubled to US$3.6-billion. Analysts were only expecting US$2.4-billion.
However, the retail giant’s second-quarter sales forecast fell shot of the Street’s expectations. It’s projecting net sales of between US$59.5-billion and US$63.5-billion, which is below analysts’ US$62.37-billion forecast.
Citi analyst Mark May said: “At a high level Amazon’s 1Q19 results were good but not great. Revenue was at the high end of the guidance range but slightly below (1 per cent) forecasts. That said, Operating Income was well ahead of forecasts (as is often the case) and represented a 360 basis points year-over-year margin expansion. ... With investors focusing on the high-end of mgmt’s guidance, Q2 revenue guidance was in-line to slightly better. And, while OI guidance is below guidance, the company’s history of OI beats actually suggests upside potential to forecasts. Mgmt said it is investing in offering 1-day delivery in many markets. All told, we find these results as good but not great .”
Ford Motor Co. (F-N) sat 10.7 per cent higher after reporting a better-than-expected first quarter on Thursday evening, due, in part, to strong pickup truck sales in its core U.S. market.
“This quarter was a really good start for the year,” said chief financial officer Bob Shanks in a release. “We expect first quarter EBIT to be the strongest of the year due to seasonal factors and major product launches ahead. It does, however, put us on track to deliver better company results in 2019 than last year.”
The automaker posted a quarterly net profit of US$1.15-billion or 29 US cents per share, down 34 per cent from US$1.74-billion or 43 US cents per share a year earlier.
Excluding one-time items, Ford earned 44 US cents per share, above analyst estimates of 27 US cents.
RBC Dominion Securities analyst Joseph Spak said: “A very strong 1Q19, clearly exceeding all expectations. F-series strength helped boost North America, while initiatives are starting to shine through in Europe and China. 1Q19 might be the best quarter of the year, but with redesign still in earlier stages, hard not to be more encouraged by potential.”
On the decline
Husky Energy Inc. (HSE-T) slid 0.1 per cent after reporting a better-than-anticipated quarterly profit, due largely to improved Canadian crude prices stemming from mandated output cuts in Alberta.
"We delivered more funds from operations compared to the first quarter of 2018, despite Alberta government quotas on our oil production, and even with global oil prices pretty much on par in Canadian dollar terms," said chief executive officer Rob Peabody.
"The structural transformation of our business over the past several years is paying off. We are now realizing higher per-barrel margins across the Company."
On a conference call Friday, CEO Rob Peabody said the production cuts have come at the cost of service industry layoffs, poorer rail shipping economics and “unprecedented uncertainty” among investors,
He called on the newly elected United Conservative Party to end the curtailment program.
“Quotas have admittedly resulted in narrower differentials but this has been at the expense of making rail shipments less economic,” said Mr. Peabody.
Before the bell, the Calgary-based company said net income rose to $328-million in the first quarter, which ended March 31, from $248-million during the same period a year ago.
While average quarterly production fell to 285,200 barrels of oil equivalent per day from 300,400 boe/d, average realized prices rose to $47.20 per barrel from $40.87 a year earlier
Excluding items, the company earned 31 cents per share, easily topping analysts’ estimate of 17 cents.
Imperial Oil Ltd. (IMO-T) lost 1.9 per cent after reducing its 2019 spending forecast on Friday in the wake of a first quarter that saw its net income nearly halved.
“First quarter operational performance was impacted by challenges in both the upstream and downstream early in the quarter, in part due to extreme cold weather across the country. Furthermore, the Government of Alberta’s production curtailment order significantly affected financial performance, as improved upstream realizations were more than offset by reduced downstream margins," said chairman, president and CEO Rich Kruger.
"Alberta's mandated curtailment continues to impact crude-by-rail economics. After increasing crude-by-rail shipments to record levels in late 2018, the company discontinued shipments in February. Late in the quarter, the company resumed limited rail shipments, and will continue to evaluate future movements as economically justified.”
The Calgary-based company is now expecting to spend between $1.8-billion and $1.9-billion, down from $2.3-billion to $2.4-billion.
Net profit for the first quarter fell to $293-million, or 38 cents, from $516-million, or 62 cents, a year earlier.
Analyst Chris Cox of Raymond James said: "Cost performance continues to be a drag on the financial results- at least from what we can see with Imperial’s limited disclosure. At the margin, strong execution on the buyback, a bump in the dividend and the reduced spending guidance are all positive developments, but not huge surprises vis-a-vis expectations
Shares of Sherritt International Corp. (S-T) were down more than 29 per cent after the company reported disappointing earnings blamed on low cobalt prices and complications in Cuba.
The Toronto-based miner reported a net loss of $61.8-million for the first quarter, compared with a net loss of $600,000 for the same quarter last year.
On an adjusted basis, the company lost $54.9-million or 14 cents per share in its most recent quarter, compared with an adjusted loss of $14.8-million or four cents per share a year ago. Analysts had expected a loss of 8 cents per share.
Shares of Bombardier Inc. (BBD-B-T) were down 5.7 per cent after an equity analyst at Raymond James downgraded it stock.
The move came a day after the Montreal-based company reduced its profit and revenue outlook.
“While we continue to admire the firm’s multi-year turnaround strategy, we believe it prudent to step to the sidelines until better visibility emerges,” said Steve Hansen.
Exxon Mobil Corp. (XOM-N) fell 2.1 per cent after reporting 49-per-cent fall in first-quarter profit on lower oil and gas prices and weakness across its businesses that offset modest production gains.
“It was a tough market environment for us this quarter,” Exxon Senior Vice President Jack Williams said on a call with analysts.
Exxon, which is the largest U.S. oil producer, said first-quarter profit fell to US$2.35-billion, or 55 US cents a share, from $4.65-billion, or US$1.09 a share, during the same period a year ago.
The result fell well below the Street’s expectation of 70 US cents.
“Solid operating performance in the first quarter helped mitigate the impact of challenging Downstream and Chemical margin environments. In addition, we continued to benefit from our integrated business model,” said chiarman and CEO Darren Woods in a release. “We are making strong progress on our growth plans and expect to deliver sustained value for our shareholders. The change in Canadian crude differentials, as well as heavy scheduled maintenance, similar to the fourth quarter of 2018, affected our quarterly results.”
Chevron Corp. (CVX-N) was 0.7 per cent lower in the wake of a 27-per-cent fall in quarterly earnings on Friday, due largely to lower crude oil prices and weaker downstream and chemicals margins.
Net income attributable to the company fell to US$2.65 billion, or US$1.39 per share, for the first quarter, from US$3.64-billion, or US$1.90 per share, a year earlier.
Intel Corp. (INTC-Q) dropped 8.9 per cent after cutting its full-year revenue forecast and missed quarterly sales estimate for its key data center business.
The chip maker cut its 2019 revenue forecast to US$69-billion, from the US$71.5-billion it projected in January.
For the first quarter, Intel marginally beat Wall Street targets for revenue and profit, but sales in the data centre group unit fell 6.3 per cent to US$4.9-billion, hit by weakness in China as customers worked through stockpiles of chips purchased last year. Analysts had expected revenue of US$5.1-billion.
Saputo Inc. (SAP-T) was down 0.3 per cent after announcing the acquisition of the speciality cheese business of Lion-Dairy & Drinks Pty Ltd, a subsidiary of Kirin Company of Japan, for approximately $265-million.
The Specialty Cheese Business is conducted at two manufacturing facilities located in Australia and employs approximately 400 people. For the 12-month period ended on Dec, 31, 2018, it generated revenues of approximately $182-million.
“The Specialty Cheese Business will enable Saputo’s Dairy Division (Australia) to further diversify its product offering, adding to and complementing its current activities,” the company said in a release.
With files from staff and wires