A survey of North American equities heading in both directions
On the rise
Andlauer Healthcare Group Inc. (AND-T) soared over 27 per cent after announcing a deal to be acquired by shipping and logistics company United Parcel Service Inc. (UPS-N) in a deal that values the company at about $2.2 billion.
AHG specializes in transportation and logistics for the health-care sector.
Under the agreement, UPS will pay $55.00 per share in cash for AHG’s multiple and subordinate voting shares.
AHG’s subordinate voting shares closed at $41.96 on the Toronto Stock Exchange on Wednesday.
The deal is backed by AGH chief executive Michael Andlauer, the indirect holder of 53.2 per cent of AHG’s outstanding shares and 82 per cent of the votes entitled to be cast to approve the transaction.
Once the deal closes, Andlauer is expected to lead UPS Canada Healthcare and AHG.
Shares of miner Teck Resources (TECK.B-T) increased 3.7 per cent on Thursday after it reported first-quarter results that beat expectations due to higher commodity prices and copper sales volumes.
The company reported adjusted earnings per share from continuing operations of 60 cents, above expectations of 32 cents, according to data compiled by LSEG.
“Our profitability improved significantly ... primarily as a result of higher base metal prices, increased copper and zinc in concentrate sales volumes, and the positive impact of a weaker Canadian dollar on our business,” Teck said in a statement.
Teck’s first-quarter copper sales volumes rose to 106,200 tons, an increase of 11 per cent year-on-year.
Revenue rose to $2.29-billion from $1.62-billion last year, beating expectations.
Teck also maintained its forecast for 2025.
In February, the company had said that U.S. President Donald Trump’s tariffs on Canadian imports will not have any material impact on its business.
In a research note, Scotia analyst Orest Wowkodaw said: “Teck reported better-than-anticipated Q1/25 results. Although all existing guidance was reaffirmed, the company warned that the 2025 operating performance at QB2 is now expected to be near the lower end of the range due to additional planned maintenance (this is in line with our expectations). Teck repurchased an incremental $305-million of shares since the Q4/24 results in late February (or $505-million year-to-date), leaving $1.50-billion outstanding under its existing buyback. While the large Q1 beat is clearly positive, we view the overall update as mixed for the shares on a first-look basis given the incremental ramp-up issues at QB2.”
The world’s biggest gold miner Newmont (NGT-T) beat Wall Street estimates for first-quarter profit on Wednesday as a rally in bullion prices helped offset lower production, sending its shares up 4.8 per cent.
The average price of gold has been rising over the past few quarters and hit record highs in the January to March period, as concerns over Mr. Trump’s erratic tariff plans ignited fears of a global trade war, driving a rush towards the safe-haven allure of the precious metal.
Newmont’s quarterly average realized price for gold jumped about 41 per cent to US$2,944 per ounce, compared with a year ago, while gold production fell 8.3 per cent to 1.54 million ounces, hurt by reduced contributions from its non-core operations.
The company bought Australia-based Newcrest for US$17.14-billion in 2023 and said in February last year it would divest some non-core assets and trim its workforce to cut debt, which was at US$3.22-billion as of March 31.
Late last year, Newmont said it would sell its Eleonore mine in Canada to UK-based miner Dhilmar Ltd for US$795-million and sell its Musselwhite Gold Mine in Ontario to Orla Mining in a deal valued at US$850-million.
In January, gold miner Discovery Silver said it would acquire Newmont’s stake in Porcupine Operations in Ontario, Canada, for US$425-million.
Newmont’s quarterly all-in-sustaining costs for gold, an industry metric reflecting total expenses, rose 14.7 per cent to $1,651 per ounce in the January-March quarter due to lower gold production.
On an adjusted basis, the company earned US$1.25 per share for the quarter ended March 31, compared with analysts’ average estimate of 90 US cents per share, according to data compiled by LSEG.
First Quantum Minerals Ltd. (FM-T) jumped 4.7 per cent after reporting better-than-expected operating results driven by strength at its Kansanshi mine in Zambia, which saw gains in throughput and higher mixed and oxide grades that drove an overall copper and gold production beat.
The miner reported adjusted EBITDA of $377-million and adjusted earnings per share of 0 cents, exceeding the Street’s expectation of $302-million and a loss of 6 cents.
“FM posted a strong operating quarter with better than expected copper and gold production atlower than forecast costs driving an earnings/EBITDA beat. After 1Q, operations are tracking wellin comparison to FY guidance which was unchanged,” said Raymond James analyst Farooq Hamed in a note.
TFI International Inc. (TFII-T) increased 7.3 per cent despite saying profits fell 40 per cent in its latest quarter amid weaker shipping demand from consumers and businesses.
The country’s largest trucking firm is reporting net income of US$56-million in the three months ended March 31 versus US$92.8-million in the same period a year earlier.
TFI says first-quarter revenue rose 5 per cent year-over-year to US$1.96-billion from US$1.87-billion.
The Montreal-based company says the increase stemmed from corporate acquisitions, offset by smaller cargo volumes “driven by weaker end market demand.”
On an adjusted basis, diluted earnings dropped 39 per cent to 76 US cents per share from US$1.24 the year before.
The outcome notched well below analysts’ expectations of 96 US cents per share, according to financial markets firm LSEG Data & Analytics.
“Although TFII shares are already down 50 per cent from the December peak, they could face slightly more pressure in the short term, before potentially bottoming fully, in reaction to the Q1 miss and likely further reduction in Street estimates,” said Scotia analyst Konark Gupta in a note. “While investor expectations were quite low from Q1, we think the results won’t likely lift the sentiment nor exacerbate concerns. That said, the market might find some relief in the fact that U.S. LTL OR [less-than-truckload operating ratio] did not breach 100 per cent. Adj. EPS of $0.76 (down 39 per cent year-over-year) and adj. EBITDA of $259-million (down 3 per cent year-over-year), TFII’s weakest results since 2020-2021, missed us/Street by 16 per cent/18 per cent and 6 per cent/8 per cent, respectively. All three segments missed consensus (led by TL), although LTL slightly beat us. However, FCF increased 40 per cent year-over-year to $192-million due to lower net capex, beating our $136-million estimate.
“Based on Q1 results and considering macro uncertainties, we now see potential for $4.00-$4.75 adj. EPS this year (down 17-30 per cent year-over-year; Street at down 5 per cent), barring significant M&A, which may provide support to the stock at around $90-$100. We think FCF could remain above $700-milliom for the fifth year in a row.”
American Airlines (AAL-Q) pulled its 2025 financial forecast on Thursday, mirroring its peers, as growing consumer apprehension over an escalating trade war result in carriers facing a level of uncertainty not seen since the COVID-19 pandemic.
Economic uncertainty can impact non-essential spending such as travel as consumers turn cautious amid fears of recession from Mr. Trump’s fluctuating trade policies.
This has created fresh headache for major U.S. airlines, which just two months ago were riding a wave of strong travel demand.
American joined peers Southwest Airlines (LUV-N) and Alaska Air (ALK-N) to withdraw their annual forecasts, following similar moves by Delta Air (DAL-N) and Frontier (ULCC-Q) earlier this month.
United Airlines (UAL-Q) recently gave two different forecasts and factored in an economic recession into one of them, saying it was impossible to predict the macroeconomic environment this year.
Shares of the carrier and peers Southwest finished higher, while Alaska’s were down on Thursday.
American Airlines is also reeling with higher costs tied to expensive labor contracts signed last year.
It forecast its second-quarter adjusted profit per share in the range of 50 US cents to US$1, compared with analysts’ expectations of 99 US cents, according to data compiled by LSEG.
In the first quarter, it reported an adjusted loss of 59 US cents per share, smaller than Wall Street expectations of 65 US cents.
Chipotle Mexican Grill (CMG-N) was higher by 1.6 per cent after steep premarket losses as it tempered its annual comparable sales growth forecast on Wednesday as the Trump administration’s tariffs raise supply chain costs and fan economic uncertainty, prompting Americans to spend less on dining out.
“In February, we began to see that elevated level of uncertainty felt by consumers. Consumers were saving money because of concerns around the economy, and reducing restaurant visits. These trends continued into April,” CEO Scott Boatwright said on a post-earnings call.
Chipotle’s comparable restaurant sales fell for the first time in more than four years to 0.4 per cent in the quarter ended March 31.
Mr. Trump’s newly enacted tariffs, including those on aluminum, as well as broad-based 10-per-cent levies will impact Chipotle’s cost of sales by about 50 basis points, company executives said.
According to a note by TD Cowen analysts, Chipotle imports beef from Australia, which faces a 10-per-cent tariff, and paper and packaging material from China, which faces a 145-per-cent duty. The company also imports some tomatoes from Mexico, which was hit by a 21-per-cent tariff last week.
Chipotle now expects annual comparable sales growth in the low single-digit range, compared with a prior forecast for a low- to mid-single-digit rise.
The company has also leaned into menu innovation and invested in technology such as produce slicers and three-tiered rice cookers to boost efficiency and soften the hit from higher input costs.
“It’s a growth story in the consumer discretionary space – specifically, restaurants – as we do see not a lot of strong growers in there. (This is a) crack in the armor,” said Don Nesbitt, senior PM at F/m Investments, which holds Chipotle shares.
Its adjusted earnings per share of 29 US cents beat estimates by 1 US cent.
On the decline
Shares of International Business Machines (IBM-N) dropped 6.6 per cent on Thursday after the company said some of its federal contracts were suspended, while an uncertain economy poses a further threat to its consulting business.
The software and consulting giant said 15 of its government contracts had been shelved due to cost-cutting initiatives by the Trump administration, amounting to roughly US$100-million in lost business, a relatively small portion of its consulting backlog.
Analysts said IBM’s consulting business was particularly vulnerable to these cuts and weak customer spending, given its reliance on government and large enterprise clients.
Its results reflected this vulnerability, with the company reporting a 2-per-cent drop in revenue from its consulting segment, but IBM maintained its target of at least 5-per-cent revenue growth on a constant currency basis in 2025.
Still, Wall Street is keeping a close eye on IBM’s software unit, which has emerged as a key area for growth and resilience, with companies paring back spending in a turbulent economy.
“While one quarter doesn’t make a trend, what stands out to us is that software growth now needs to accelerate in the face of an uncertain macro backdrop and increasingly more difficult compares,” Morgan Stanley analysts said in a note.
IBM’s increasing focus on high-margin software business has helped the company to not miss quarterly profit estimates for more than a decade.
Its stock, which has gained about 12 per cent this year, trades at 22.35 times the company’s profit estimates, compared with 21.67 for Accenture (ACN-N) and Oracle’s (ORCL-N) 19.85.
Procter & Gamble (PG-N) slid 3.7 per cent on Thursday after it lowered its annual sales and profit forecasts after reporting a bigger-than-expected drop in third-quarter net sales as consumers slashed spending due to economic uncertainty amid an ongoing trade war.
Mr. Trump’s sweeping tariffs on imports have left global markets reeling and given rise to fears of a recession in the United States, the biggest market for consumer goods maker P&G, whose products include Tide detergent.
A P&G spokesperson said the company saw U.S. shoppers slow their spending in February and March in particular.
The firm, a bellwether for consumer goods, now expects total net sales for fiscal 2025 to be roughly in line with the prior fiscal year, compared with its earlier target of 2-per-cent to 4-per-cent growth.
Those expectations include some assumptions about the impact of tariffs, the spokesperson said, adding that the company still does not know the full extent of how they will affect its costs.
P&G imports raw ingredients, packaging materials and some finished products to the United States from China, while goods it makes in the United States and exports to Canada could also be hit by tariffs, the spokesperson said.
But the vast majority - roughly 90 per cent - of what P&G sells in the United States is produced domestically, the spokesperson added. North America accounted for 52 per cent of the company’s net sales in 2024, according to a regulatory filing.
P&G previously said it may have to hike prices to offset tariffs.
“These things are priced in and I don’t see it taking a big hit because of its defensive nature. P&G has always been kind of an anchor in our portfolios for the consumer staple sector,” said Don Nesbitt, senior PM at F/m Investments, that holds shares in P&G.
The company expects annual core earnings per share in the range of US$6.72 to US$6.82, down from its prior target of US$6.91 to US$7.05.
P&G’s third-quarter net sales fell 2 per cent to US$19.78-billion, compared with analysts’ average estimate of a 0.44-per-cent fall to US$20.11-billion, according to data compiled by LSEG, while adjusted earnings per share of US$1.54 beat estimates by 1 US cent.
PepsiCo (PEP-Q) on Thursday cut its annual profit forecast and warned of higher production costs and volatility from a global trade war sparked by Mr. Trump’s expansive tariffs.
Its shares were down 4.9 per cent after the Frito-Lay maker also posted its first quarterly profit miss in at least five years.
“As we look ahead, we expect more volatility and uncertainty, particularly related to global trade developments, which we expect will increase our supply chain costs,” CEO Ramon Laguarta said in a statement.
PepsiCo forecast fiscal 2025 core earnings per share to decline 3 per cent, compared with its previous expectation of a low-single-digit increase. The company reported earnings per share of US$8.16 last year.
The company plans mitigation actions to address the higher supply chain costs where possible, said Mr. Laguarta, adding it would include adjusting sourcing of key inputs.
PepsiCo has two food plants in Mexico and two concentrate plants in Ireland. The 25-per-cent U.S. tariffs on steel and aluminum, which came into force in March, could also weigh on the company’s margins.
Mr. Laguarta on Thursday also called out uncertain and subdued consumer conditions in many markets.
Organic volumes declined 2 per cent in the first quarter, PepsiCo said, as promotions on snacks and sodas take longer to boost demand.
Average prices jumped 3 per cent in the three months ended March 22.
“Price hikes are doing the heavy lifting, with volume growth across its beloved brands like Pepsi, Gatorade, Lay’s and Doritos struggling to gain momentum,” said Aarin Chiekrie, equity analyst with Hargreaves Lansdown.
On an adjusted basis, PepsiCo earned US$1.48 per share in the first quarter, missing estimates of US$1.49, according to data compiled by LSEG.
The soda and snacks giant’s revenue fell 1.8 per cent to US$17.92-billion. Analysts on average had estimated US$17.77-billion.
Railroad operator Union Pacific (UNP-N) missed Wall Street estimates for first-quarter profit and revenue on Thursday, hurt by weak automotive shipments and lower fuel surcharge, sending shares down 2 per cent.
The Omaha, Nebraska-based company said its volumes were pressured by economic uncertainty and weaker coal demand.
Union Pacific has struggled with lower demand for coal shipments as customers turn to cheaper stockpiles of natural gas for energy.
Although, that trend is expected to change after Mr. Trump signed executive orders last month aiming to boost coal production.
The company also joined its East Coast peer, Norfolk Southern (NSC-N), in reaffirming its annual target.
Union Pacific said its operating ratio, a key profitabilty metric, came at 60.7 per cent, flat compared with a year ago.
Quarterly revenue from its intermodal shipment, which involves transporting goods via two or more means of transportation, rose 10 per cent to US$1.19-billion.
On an adjusted basis, Union Pacific earned US$2.70 per share in the first quarter, compared with the average analyst estimate of US$2.75, according to data compiled by LSEG.
With files from staff and wires