Shares in Canadian Imperial Bank of Commerce and Toronto-Dominion bank reacted in muted fashion to second-quarter earnings released this morning. In early trading, CIBC was down 0.3% and TD - which had risen steadily this week prior to earnings - was off 1.6%.
CIBC and TD both missed quarterly earnings expectations, as they set aside billions to cover future loan losses due to the COVID-19 outbreak.
CIBC posted an adjusted profit of 94 Canadian cents per share for the quarter ended April, compared with analysts’ expectations of C$1.58 per share. TD Bank, Canada’s second-biggest lender, reported an adjusted profit of 85 Canadian cents per share, missing estimates of 89 Canadian cents.
In a conference call this morning, CIBC management said they expect consumer loan delinquencies and write-offs to increase late in the second half of 2020 when deferral programs end.
Read more on CIBC’s earnings here and on TD’s here.
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Boeing shares were up more than 2% after saying it plans 7,000 job cuts and will slowly restart production of its 737 MAX aircraft. Boeing also said late Wednesday that some of its airline customers were reporting that reservations are now outpacing cancellations for the first time since the start of the coronavirus pandemic.
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Air Canada shares were down less than 1% after pricing its new share offering at C$16.25, which raised $500.5 million.
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BRP Inc. shares were down 7% after warning it expected revenue in its second quarter to drop sharply compared with a year ago due to the pandemic. The Ski-Doo and Sea-Doo maker says it expects revenue in the second quarter to be down about 40 per cent compared with last year. BRP lost $2.58 per diluted share for the quarter ended April 30 as it took a $171.4-million impairment charge related to its marine business compared with a profit of $23.8-million or 25 cents per diluted share a year ago. The company also announced it will cut 650 jobs or about five per cent of its global workforce as the recreational product maker stops producing outboard motors that have been “hard hit” by the COVID-19 pandemic.
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Cineplex Inc. was up 14% at midday. Cineworld, which has proposed taking over the Canadian company, surged 22% in the UK today on a plan to reopen all its cinemas in July.
The UK-based cinema operator tracked its best day in more than a month as it also secured an additional $110 million from lenders and a waiver on loan covenants.
On May 7, Cineplex said Cineworld Group, which also owns the Regal Entertainment Group, remains committed to completing the $2.1 billion acquisition to create one of the world’s largest cinema companies with over 11,200 screens globally. There has been some doubt, however, that the deal would get done - especially given the challenges in the industry amid the coronavirus.