A roundup of some of the North American equities making moves in both directions today
On the rise
RioCan Real Estate Investment Trust (REI.UN-T) rose on Wednesday in reaction to the premarket announcement that Jonathan Gitlin, currently the trust’s president and chief operating officer, will succeed Edward Sonshine as chief executive next year.
Mr. Gitlin will become CEO effective April 1, 2021.
Mr. Sonshine is set to retire from the top job on March 31, 2021, and will become non-executive chairman of RioCan’s board of trustees.
Paul Godfrey, RioCan’s current chair, will step down and become lead trustee.
RioCan says Mr. Gitlin joined the trust in 2005 and held a series of key leadership roles before being appointed president and chief operating officer in March 2019.
PayPal Holdings Inc. (PYPL-Q) jumped after it joined the cryptocurrency market on Wednesday, allowing customers to buy, sell and hold bitcoin and other virtual coins using the U.S. digital payments company’s online wallets.
PayPal customers will also be able to use cryptocurrencies to shop at the 26 million merchants on its network starting in early 2021, the company said in a statement.
PayPal hopes the service will encourage global use of virtual coins and prepare its network for new digital currencies that may be developed by central banks and corporations, President and Chief Executive Dan Schulman said in an interview.
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he said.
U.S. account holders will be able to buy, sell and hold cryptocurrencies in their PayPal wallets over the coming weeks, the company said. It plans to expand to Venmo and some countries in the first half of 2021.
Nasdaq Inc. (NDAQ-Q) rose after it beat Wall Street estimates for third-quarter profit on Wednesday, boosted by strength in the transatlantic exchange operator’s non-trading businesses and a surge in trading volumes.
Separately, the company said its Chief Financial Officer Michael Ptasznik will retire effective February 28 and named Ann Dennison to the role. Dennison is currently the company’s senior vice president, controller and chief accounting officer.
For the third quarter, Nasdaq reported an adjusted profit of US$1.53 per share, compared to estimates of US$1.46 per share, according to IBES data from Refinitiv.
Net income attributable to the company rose to US$264-million, or US$1.58 per share, for the quarter ended Sept. 30, from US$150-million, or 90 US cents per share, a year earlier.
Revenue from information services, Nasdaq’s biggest non-trading business, rose 20 per cent to US$238-million.
Higher trading volumes helped boost the company’s market services unit, its biggest business. Revenue in the segment jumped about 39 per cent to US$958-million.
U.S. auto dealer AutoNation Inc. (AN-N) increased as its quarterly profit nearly doubled on Wednesday as a stronger-than-expected recovery in demand and tight inventories helped drive more profit per vehicle just months after the pandemic slammed the economy.
Chief Executive Mike Jackson told Reuters he is optimistic looking ahead. Interest rates will be “very low for a long time,” he said.
Low rates help consumers afford more expensive vehicles, and reduces AutoNation’s inventory finance costs.
The pandemic has driven consumer demand for their own vehicles rather than sharing rides, or taking trips on a plane.
“We had far more demand than supply,” Mr. Jackson said. “We have adjusted pricing to reflect that.”
AutoNation said it had 43 days supply of new vehicles in the third quarter compared with 55 a year earlier.
The pace of U.S. car and light truck sales has increased each month since lockdowns were lifted, on the back of strong demand for high-profit sport utility vehicles and pickup trucks amid tight inventories.
AutoNation’s net income rose to US$182.6-million, or US$2.05 per share, in the third quarter ended Sept. 30, from US$99.5-million, or US$1.10 per share, a year earlier.
Total revenue fell 1 per cent to US$5.4-billion as new vehicle sales were down 11 per cent at 65,998 vehicles during the third quarter. Used vehicle volume rose 1.6 per cent to 64,587 units.
Shares of Nikola Corp. (NKLA-Q) rose on Wednesday after a General Motors executive told CNBC the Detroit-based automaker still sees a partnership with the electric-vehicle start-up being a great opportunity.
The report quoted GM President Mark Reuss saying there were “great” operational cost advantages, efficiencies and opportunities from the partnership.
The alliance announced in September included plans for GM to receive an 11-per-cent stake in Nikola, then worth about US$2-billion, and payments up to US$700-million for building the startup’s Badger pickup.
Days after the deal was announced, short-seller Hindenburg Research released a scathing report that called Nikola a “fraud” and said its founder and then executive chairman Trevor Milton had made false claims about Nikola’s proprietary technology.
GM has maintained that it was “continuing discussions” with Nikola on the alliance deal.
Shares of Snap Inc. (SNAP-N) rallied after the Snapchat messaging app owner beat user growth and revenue forecasts as more people signed up to chat with friends and family during the coronavirus pandemic.
Daily active users (DAUs), a widely watched metric by investors and advertisers, rose 18 per cent year-over-year to 249 million in the quarter ended Sept. 30, the company said in a statement. Analysts had expected 244 million, according to IBES data from Refinitiv.
The company said it expected continued momentum in user growth and forecast about 257 million daily active users in the fourth quarter, exceeding analysts' current estimate of 249.81 million.
Revenue, mainly from selling ads on the app, jumped 52 per cent to US$679-million, widely beating analysts' consensus estimate of US$555.9-million.
Drugmaker Biogen Inc. (BIIB-Q) closed up in the wake of cutting its 2020 profit forecast, expecting a significant hit from generic rivals to its blockbuster multiple sclerosis (MS) drug, Tecfidera.
Investors are now betting on Biogen’s Alzheimer’s disease drug, aducanumab, after the drugmaker suffered a setback earlier this year when it lost a patent dispute against Mylan over its top-selling drug, Tecfidera.
All eyes are now on an upcoming meeting of U.S. Food and Drug Administration’s expert panel next month to discuss potential approval of aducanumab that could become the first drug to delay the progression of Alzheimer’s disease.
Biogen now expects Tecfidera sales growth to significantly fall in the fourth quarter, after multiple generic rivals were recently launched in the United States.
Sales of Tecfidera, which brought in US$4.3-billion for Biogen in 2019, were down 15 per cent to US$953-million in the third quarter.
Biogen now expects full-year adjusted profit of US$32.50 to US$33.50 per share, down from its prior estimate of US$34 to US$36 per share.
On the decline
Canadian National Railway Co. (CNR-T) was lower after it saw earnings slide 18 per cent for the three months ending Sept. 30, as record-setting grain shipments failed to offset the impact of the COVID-19 pandemic on freight trains.
CN rail reported third quarter net income of $985-million, down from $1.2-billion in the same period in 2019.
The earnings amounted to $1.38 per share on a diluted basis, down from $1.66 per share in the same period last year.
Sales fell 11 per cent to $3.41-billion, down from $3.83-billion in the year-ago period.
Analysts polled by Refinitv expected earnings per share of $1.46 on sales of $3.5-billion.
See also: Wednesday’s analyst upgrades and downgrades
CP, CN Rail report sales slump as pandemic hits freight shipments
Kingsey Falls, Que.-based Boralex Inc. (BLX-T) slid after it named chief operating officer Patrick Decostre as the renewable power producer’s next chief executive.
Mr. Decostre will replace Patrick Lemaire, who is set to retire at the end of the year.
Mr. Lemaire has been at the head of Boralex since September 2006.
Mr. Decostre joined the company in 2001 and spent 18 years building its business in Europe.
He was named chief operating officer in 2019.
Cogeco Communications Inc. (CCA-T) finished lower after announcing its subsidiary Cogeco Connexion has entered into a definitive agreement to purchase DERYtelecom for $405-million.
Saguenay, Que.-based DERYtelecom is the third largest cable provider in the province.
See also: Cogeco shareholder urges Audet family to consider Altice-Rogers bid
Netflix Inc. (NFLX-Q) fell after it missed expectations for paid subscriber additions in the third quarter, hit by rising streaming competition and the return of live sports to television.
The company said it added 2.2 million paid subscribers globally during the quarter ended Sept. 30, compared with analysts' estimates for 3.4 million, according to IBES data from Refinitiv.
Netflix had warned investors that a sudden surge in new sign ups would fade in the latter half of the year as restrictions ease and consumers choose to step outside instead of binge watch its shows at home.
Revenue rose 22.7 per cent to US$6.44-billion in the third quarter, edging past estimates of US$6.38-billion.
Net income rose to US$790-million, or US$1.74 per share, in the quarter from US$665.2-million, or US$1.47 per share, a year earlier.
Verizon Communications Inc. (VZ-N) reversed course and fell after it beat estimates for third-quarter profit on Wednesday, helped by strong demand for its phone and internet services as offices and schools continued to operate virtually amid the COVID-19 pandemic.
The health crisis has brought global economies to a halt, but the telecom sector has been relatively less affected. With lockdowns easing, Verizon gradually reopened all of its company-operated retail stores in the quarter, implementing touch-less retail, appointments and curbside pickups.
Verizon added 283,000 postpaid phone subscribers in the third quarter, above the average estimate of 268,000, according to research firm FactSet.
Total operating revenue fell 4.1 per cent to US$31.54-billion, which the company attributed to lower customer activity and the timing of certain device launches.
Revenue in Verizon’s media unit, which includes Yahoo, HuffPost and TechCrunch, declined 7.4 per cent in the quarter to $1.7 billion from a year earlier as companies cut down on advertising to rein in expenses.
Net income fell to US$4.50-billion, or US$1.05 per share in the quarter, from US$5.34-billion, or US$1.25 per share a year earlier, with about 5 US cents of COVID-19-related net impact, Verizon said.
Excluding items, Verizon earned US$1.25 per share, above analysts' average estimate of US$1.22.
NextEra Energy Inc. (NEE-N), the world’s largest producer of wind and solar energy, beat estimates for quarterly profit on Wednesday as investments in its Florida Power and Light Company paid off and cuts in expenses also helped.
NextEra briefly crossed oil giant Exxon Mobil Corp’s market capitalization last month to take over as the most valuable U.S. energy company, cementing investor focus on cleaner, lower carbon intensity products and services.
The company raised its full-year 2021 adjusted earnings per share estimates by 20 US cents and now expects them to be in the range of US$9.60 and US$10.15.
The Juno Beach, Florida based company posted net income of US$1.23-billion, or US$2.50 per share, for the third quarter ended Sept. 30, from US$879-million, or US$1.81 per share, a year earlier.
On an adjusted basis, the company posted a profit of US$2.66 per share, beating analysts' estimates of US$2.58 per share.
With files from staff and wires
David Leeder