A roundup of some of the North American equities making moves in both directions today
On the rise
TFI International Inc. (TFII-T) increased on Friday in reaction to the release of better-than-expected third-quarter results.
After the bell on Thursday, the Montreal-based transport and logistics company reported revenue before fuel charges of $1.155-billion, falling in line with the Street’s forecast of $1.187-billion. However, EBITDA and earnings per share of $251-million and $1.25, respectively, topped the consensus estimates of $210-million and 94 cents.
Desjardins Securities analyst Benoit Poirier said: “Bottom line, we are impressed by TFII’s operational execution in the quarter, which helped to deliver a solid beat despite the pandemic (even excluding the $22-million wage subsidy). We believe TFII’s diversified business model focused on FCF generation and ROIC, and its strong balance sheet place the company in an excellent position to benefit from robust market conditions while also seizing accretive M&A opportunities along the way. We recommend investors buy the shares.”
Shares of Gilead Sciences Inc. (GILD-Q) rose on Friday after its antiviral drug, remdesivir, became the first and only approved treatment for COVID-19 in the United States.
The U.S. health regulator’s approval on Thursday for its use in hospitalized patients came despite the World Health Organization last week saying the drug did not have a substantial effect on patients' length of hospital stay or chances of survival in a global trial.
The U.S. Food and Drug Administration’s (FDA) backing signals its confidence in Gilead’s U.S.-based study results, which showed the drug was able to cut time to recovery in patients, Piper Sandler analyst Tyler Van Buren said in a client note.
Remdesivir has been available under an FDA emergency use authorization since May, after a study led by the National Institutes of Health showed it reduced hospital stays by five days.
The drug, given intravenously, could generate over US$1-billion in sales during the second half of the year at the current case rate, analyst Van Buren said.
Remdesivir, which will be sold under the brand name Veklury, costs US$3,120 for a five-day treatment course, or US$2,340 for government purchasers such as the Department of Veterans Affairs.
Mattel Inc. (MAT-Q) was up after it reported a surprise rise in quarterly sales on Thursday and forecast more growth in the holiday season, as retailers rushed to restock their shelves of Barbie dolls and other toys in high demand from stuck-at-home kids.
With the COVID-19 pandemic forcing schools in many parts of the United States to hold classes online and limiting social entertainment options, parents have turned to playsets and games to keep children’s boredom at bay, boosting toy sales at retailers such as Walmart Inc and Target Corp.
As pre-pandemic inventories run low, Mattel has had to boost shipments, leading to a 10-per-cent jump in its third quarter net sales - the biggest increase in a decade and the first rise since the start of the health crisis.
According to research firm NPD, demand is expected to increase as wealthy families with excess of money to spend due to canceled vacations, splurge on toys during the holiday season.
“Based on ... the low retail inventories and the early start of the holiday shopping season, we expect net sales to grow in the fourth quarter,” Mattel Chief Executive Officer Ynon Kreiz said in a statement.
Net income rose more than four-fold to US$316-million, as cost cuts beefed up profit margins. The company reported adjusted earnings of 95 US cents per share, beating estimates of 39 US cents.
On the decline
Barrick Gold Corp. (ABX-T) was flat after it said on Friday Tanzania has awarded 10 new exploration licenses to the Canadian miner and it plans to spend $8-million to carry out exploration in the country this year.
Barrick oversees the management of its assets in Tanzania through Twiga Minerals Corp, a joint venture formed last year between the company and the government of Tanzania.
Twiga Minerals manages the Bulyanhulu, North Mara and Buzwagi mines in Tanzania.
“We are gearing up to potentially make North Mara and Bulyanhulu into a combined Tier One complex, capable of producing at least 500,000 ounces of gold annually for more than 10 years in the lower half of the industry’s cost profile,” Barrick Chief Executive Officer Mark Bristow said in a statement.
Barrick said it would also be looking to expand the life of operations as well as other new Tanzanian opportunities within the Twiga framework.
Shares of Canfor Corp. (CFP-T) reversed course and fell a day after the release of a strong third-quarter earnings beat.
On Thursday after the bell, the Vancouver-based forest products company said it earned $218.1-million or $1.74 per share in the three months ended Sept. 30.
That compared with a loss of $88.5-million or 71 cents per share a year earlier.
Adjusted net income increased to $259.4-million or $2.07 per share, up from a loss of $42.6-million or 34 cents per share in the third quarter of 2019.
Sales grew 42 per cent to $1.55-billion from $1.09-billion in the prior year.
Canfor was expected to report $1.61 per share in adjusted earnings on $1.42-billion of revenues, according to financial data firm Refinitiv.
In a research report, Raymond James analyst Daryl Swetlishoff raised his target price for Canfor shares, saying: “Despite aggressive recent upward analyst earnings revisions Canfor delivered a material beat – providing a good read through for building materials competitors reporting over the next two weeks. While the 3Q20 number is unlikely to be a huge surprise to investors (given the press lumber has received) we look forward to management commentary on the conference call specifically with respect to future earnings. Lumber pricing has come off white-hot levels, however, it remains exceptional on a historic basis; we estimate Canfor could generate $175-million (50 per cent of 3Q20 EBITDA) in Oct. 2020 alone! Free cash flow during the quarter was sufficient to enable us to hike our target by $3/share."
Chipmaker Intel Corp. (INTC-Q) tumbled after it reported that margins fell as consumers bought cheaper laptops and pandemic-stricken businesses and governments clamped down on data center spending.
Intel, the dominant provider of processor chips for PCs and data centers, has struggled with manufacturing delays. In July, it said its next generation of chipmaking technology was six months behind schedule.
Chip sales are booming, but customers want lower-priced chips rather than Intel’s pricier high-performance offerings, dragging down overall gross margins.
The pandemic has given Intel a boost in the form or surging laptop sales as employees and students work and learn from home. Sales in its PC group were US$9.8-billion, beating analyst estimates US$9.0- billion, according to FactSet.
But Intel sold a higher volume of less-profitable chips in its PC business, driving operating margins down to 36 per cent in the third quarter from 44 per cent a year earlier.
Excluding items, it earned US$1.11 per share, in line with estimates, according to IBES data from Refinitiv.
Credit card issuer American Express Co. (AXP-N) slid in the wake of reporting a nearly 40-per-cent slump in quarterly profit on Friday, hurt by lower spending by its users, while it also set aside US$665-million for potential defaults.
The COVID-19 pandemic has triggered the worst economic downturn in decades and led to mass layoffs, resulting in more people defaulting on their bills.
Net income fell to US$1.07-billion, or US$1.30 per share, for the third quarter ended Sept. 30, from US$1.76-billion, or US$2.08 per share, a year earlier.
Consolidated loss provisions in the quarter stood at US$665-million, down 24 per cent from US$879-million a year earlier.
Total credit reserve levels at the end of the third quarter were generally consistent with second-quarter levels, the company said.
With files from staff and wires