A survey of North American equities heading in both directions
On the rise
Bausch Health (BHC-T) soared 10.3 per cent after it said on Tuesday billionaire investor Carl Icahn has built an economic interest covering about 34 per cent, days after the pharmaceutical firm adopted a “poison pill” to ward off hostile takeovers.
In addition to owning 9.4 per cent of the company’s shares, Mr. Icahn has exposure to an additional 24.6 per cent, or 90.72 million shares through cash-settled equity swap agreements, Bausch Health said.
Such financial contracts only allow an investor to benefit from stock movements without actually owning the shares. According to Icahn, the agreements do not give him control over voting on the additional shares.
Bausch Health, which has engaged financial advisors to help finance its large debt, last week adopted a shareholders’ rights plan, or a “poison pill,” to prevent investors from acquiring a more than 20-per-cent stake.
At the time, the company said the move was not in response to any specific proposals and it was not aware of any threatened take-over bids.
It reported total liabilities of nearly US$27-billion at the end of last year.
In a supplement to its proxy filing, the company said Icahn refused to provide copies of the swap agreements to Bausch’s lawyers, but has said they were accumulated through more than 100 trades that took place between May 2021 and September 2023.
Tesla (TSLA-Q), which will kick off earnings for the “Magnificent Seven” group of megacap stocks after markets close, rose 4.6 per cent in Tuesday trading.
The electric vehicle maker will provide what is likely to be its most important update on operations since the launch of its Model 3 vehicle in 2017. Tesla said earlier this month that it would “hold a live company update” along with its results and the question and answer webcast, sparking speculation on social media that it might make a major announcement.
Big Tech’s ‘Magnificent Seven’ heads into earnings season reeling from Trump turbulence
Analysts are expecting a bad first quarter, based on recent indicators. Deliveries in the January-March period slid 13 per cent, as the company lost ground to Chinese rivals, and Mr. Musk’s political actions as a close adviser to U.S. President Donald Trump have damaged the brand.
Tesla has faced protests, vandalism, and consumer calls for boycotts in several markets, and sales in China and California - its largest U.S. market - have fallen sharply as well.
Some investors have taken a more sour view of the one-time Wall Street darling. The company’s stock, which closed at US$227.42 on Monday, has nearly halved from its December peak.
Boeing Co. (BA-N) gained 2 per cent after it said on Tuesday it would sell portions of its Digital Aviation Solutions business, including navigation unit Jeppesen, to private equity firm Thoma Bravo for US$10.55-billion.
The U.S. planemaker will retain the core digital capabilities from the business that harness aircraft and fleet-specific data to provide commercial and defense customers with fleet maintenance, diagnostics and repair services.
The sale is a part of CEO Kelly Ortberg’s plan to reduce Boeing’s debt pile by offloading non-core assets.
Jeppesen attracted interest from private equity firms and at least one aerospace supplier, with final bids valuing it at more than US$8-billion.
Thoma Bravo won the Jeppesen auction, edging out rival buyout firms such as TPG, Advent, and Veritas, according to Reuters.
Boeing, which acquired Jeppesen for US$1.5-billion in 2000, had aimed for a price above US$6-billion when it launched the auction last year, but strong interest from potential buyers drove the valuation higher.
GE Aerospace (GE-N) said on Tuesday it was relying on price increases and cost control to mitigate the impact of tariffs on its business as the aircraft engine maker reaffirmed its full-year earnings forecast.
The Ohio-based company, however, said its 2025 forecast did not assume changes in planemakers’ delivery schedules, further tariff escalation or a global economic recession.
Its shares were up over 6 per cent as the company reported stronger-than-expected profit in the first quarter.
Mr. Trump’s trade war has created the biggest uncertainty for the aerospace industry since the COVID pandemic. With little clarity on how consumers will behave in the face of a potentially worsening economy, some of GE’s customers are struggling to accurately forecast their business. The International Monetary Fund last week warned that rising trade tensions and sweeping shifts in the global trading system would hurt global growth.
GE Aerospace said heightened tariffs would result in additional costs for itself and its suppliers, warning of delays in spare engine deliveries. It expects flight departures, which drive aftermarket services business, would now be lower than its previous estimate.
CEO Larry Culp said he has spoken to a number of senior members of the Trump administration, including the president, advocating a tariff-free regime for the aerospace industry.
Aside from an 18-month transatlantic tariff war over Airbus and Boeing subsidies in 2020 and 2021, the industry has broadly operated under a 1979 treaty on zero-duty trading in aerospace that includes the U.S. and Canada, but not Mexico.
Mr. Culp said the zero-duty regime has helped the U.S. aerospace industry to enjoy a $75 billion annual trade surplus.
“As the U.S. Administration engages in discussions with its trade partners, we’ll continue to advocate for an approach that reestablishes 0 to 0 tariffs in the aviation sector,” he said on an earnings call.
GE Aerospace has a dominant share in the engine market for narrowbody jets and enjoys a strong position in widebodies. More than 70 per cent of its commercial engine revenue comes from parts and services.
It reported an adjusted profit per share of US$1.49 for the quarter through March, topping analysts’ average estimates of US$1.27.
Lockheed Martin (LMT-N) finished up 0.8 per cent after it reported a higher first-quarter profit on Tuesday and reaffirmed its forecasts for the year on the back of resilient demand for its missile systems and fighter jets.
Defence contractors have benefited from a surge in demand for weapons against the backdrop of the Russia-Ukraine war and conflicts in the Middle East.
Legacy companies in the sector are also expected to get a potential boost from Mr. Trump’s review of military equipment export rules that he is seeking to ease.
Lockheed’s aerospace business, which makes the F-35 fighter jet, posted a 3.1-per-cent rise in sales in the first quarter.
The F-35 program has been beset by delays in rolling out a technology upgrade to give the jet better displays and processing capabilities for its electronic systems.
Lockheed reported total revenue of US$17.96-billion in the first quarter, up 4.5 per cent from a year earlier. Sales during the quarter increased at all the company’s units, except its space division.
The company’s net income rose to US$1.71-billion, or US$7.28 per share, in the quarter, from about US$1.55-billion, or US$6.39 per share, a year earlier.
U.S. industrial conglomerate 3M Co. (MMM-N) cut its forecast for 2025 profit on Tuesday as tariff tensions mount, however its shares were higher by 8.1 per cent.
Global trade tensions have heightened since China imposed a 125-per-cent tariff on U.S. imports, retaliating against Mr. Trump’s decision to raise tariffs for Chinese imports to 145 per cent. In March, 3M said China accounted for roughly 10 per cent of its global revenue.
Mr. Trump’s tariffs have fueled concerns about an economic slowdown and a decline in consumer sentiment, which could impact sales for the company’s consumer products, including its iconic Scotch tape and Post-it notes.
Consumers’ 12-month inflation expectations surged to 6.7 per cent in April, the highest level since 1981.
The St. Paul, Minnesota-based company now expects a tariff-related negative impact of 20 US cents to 40 US cents per share on its full-year adjusted profit forecast of US$7.60 to US$7.90.
It posted a first quarter adjusted profit of US$1.88 per share higher than analysts’ average expectations of US$1.77 per share, according to data compiled by LSEG.
The company’s adjusted net sales for the first quarter came in at US$5.78-billion, compared with Wall Street expectations of US$5.75-billion.
Verizon Communications (VZ-N) lost more wireless subscribers in the first quarter than Wall Street expected, as the U.S. telecom giant grappled with the fallout of recent price hikes and aggressive promotions from rivals.
Shares of the company were higher by 0.6 per cent in Tuesday trading.
The company warned in March that off-season promotions by AT&T (T-N) and T-Mobile (TMUS-Q) would result in “soft” subscriber growth, fueling fears about intensifying competition in an industry vying for a limited pool of new subscribers.
It also raised monthly prices for its customizable myPlan accounts with five lines or more by US$3 per line, while customers on the New Verizon Plan faced a US$4 per line increase for single mobile lines.
“We had a pretty big price up in January, and the elasticity on that price up was higher than what we had anticipated,” Sowmyanarayan Sampath, CEO of Verizon Consumer, told Reuters.
That led to a higher churn, percentage of customers exiting a service, with Verizon reporting a loss of 289,000 monthly bill-paying wireless subscribers in the first quarter, after it added a record 568,000 customers in the December quarter.
Analysts had expected the company to lose 166,400 subscribers, according to FactSet data.
“March was very strong, especially the last two weeks and in April, we were running almost double-digit growth,” Mr. Sampath said.
The company introduced a three-year price guarantee in early April to lock in customers for its myPlan and myHome offerings.
It also reaffirmed its annual adjusted profit and free cash flow outlook, a sign it was confident in its business plans amid economic uncertainty.
In the first quarter, total revenue grew 1.5 per cent to US$33.5-billion, edging past analysts’ estimates of US$33.24-billion, according to data compiled by LSEG.
Wireless service revenue grew 2.7 per cent to US$20.8-billion, helped by the price hikes implemented by the company.
On the decline
Shares of Barrick Gold Corp. (ABX-T) were lower by 2.5 per cent on Tuesday after it said it will exit the Donlin gold Project in Alaska by selling its 50-per-cent stake to billionaire John Paulson and NovaGold Resources (NG-T) for up to US$1.1-billion.
The Donlin Gold project is a proposed mine which holds roughly 39 million ounces of gold. It was jointly owned by Barrick Gold and NovaGold, holding a 50-per-cent stake each.
Mr. Paulson and NovaGold will acquire 80 per cent and 20 per cent, respectively, of Barrick Gold’s interest in the entity, for US$1-billion in cash.
The transaction is expected to close in the second quarter or early in the third quarter of 2025.
NovaGold will also have an option to buy outstanding debt owed to Barrick for US$90-million if purchased prior to closing, or US$100-million if purchased within 18 months from deal closure.
Barrick said it would use proceeds from the sale to strengthen its balance sheet and drive shareholder returns.
Separately, NovaGold said the agreement with Barrick would increase its stake in the project to 60 per cent while Mr. Paulson would hold the remaining 40 per cent.
Toronto-based Triple Flag Precious Metals Corp. (TFPM-T) gave back early gains and lost 0.9 per cent after announcing before the bell a definitive agreement to acquire Orogen Royalties Inc. (OGN-X) for total consideration of approximately $421-million, or $2.00 per share.
The deal includes approximately $171.5-million in cash, approximately $171.5-million in Triple Flag shares, and shares of a new company (‘Orogen Spinco’) with an implied value of approximately $78-million.
Orogen Spinco, which is planned to go public, will be led by Paddy Nicol, CEO of Orogen, and will hold all of Orogen’s mineral interests except for the 1.0-per-cent Expanded Silicon NSR royalty.
St. John’s-based Altius Minerals Corp. (ALS-T), which is a major stakeholder in Orogen with 39,557,960 shares, jumped on the news.
Halliburton (HAL-N) on Tuesday warned of a second-quarter earnings impact from tariffs and lower oilfield activity in North America as producers evaluate drilling and completions at weak oil prices, sending shares of the oilfield service producer down 5.6 per cent.
Halliburton is the first of the Big Three U.S. oilfield services providers and among the first large oil company to report earnings as U.S. crude prices hover under US$64 a barrel. Many companies say they cannot drill profitably if oil prices fall under US$65 a barrel, denting demand for equipment and services provided by companies like Halliburton.
“Many of our customers are in the midst of evaluating their activity scenarios and plans for 2025 activity reductions could mean higher than normal white space for committed fleets and in some cases, the retirement or export of fleets to international markets,” Halliburton Chief Executive Jeff Miller said about expectations in North American markets. Mr. White spaces refer to gaps in the calendar when the company does not have work lined up for its equipment.
Halliburton shares were down after it forecast a 2-US-cents to 3-US-cents per share impact in the second quarter from trade tensions. Second-quarter earnings were estimated to be 63 US cents per share, according to LSEG data.
Shares had fallen as much as 10 per cent during the session, and were down 24 per cent year-to-date. Rival SLB’s (SLB-N) shares were down only 11 per cent this year.
The oilfield service sector worries President Donald Trump’s tariffs on imported steel and parts will disrupt supply chains and drive up equipment costs, such as drilling rigs and well casings.
The Houston-based company posted a profit of $204 million, or 24 US cents per share, in the three months ended March 31, lower than US$606-million, or 68 US cents per share, it posted last year.
The charges included severance costs of US$107-million, the company said.
Northrop Grumman (NOC-N) posted a 49-per-cent drop in first-quarter profit on Tuesday as the U.S. contractor booked losses on its B-21 stealth bomber program due to higher manufacturing costs, sending its shares down 12.7 per cent.
The company, however, reaffirmed its sales forecast for the year, even amid growing concerns of uncertainty in the wake of U.S. President Donald Trump’s tariffs.
U.S. defence contractors, like other industries with complex manufacturing operations, are bracing for impacts from Mr. Trump’s trade war, which has pressured an already strained supply chain.
Although some experts have suggested that a higher defense budget would support backlogs and shore up revenues, countries upset with steep tariffs and constantly shifting policies are looking at moving away from American weapons and focusing on their own capabilities.
The European Union has outlined plans to shore up its own defence capabilities to reduce reliance on the U.S. by 2030, meaning any role for companies outside the bloc would be substantially limited.
Northrop, which makes the nuclear-capable B-21 Raider, posted first-quarter sales of US$9.47-billion, down 7 per cent from the US$10.13-billion it posted a year ago.
It reported a per-share profit of US$3.32 on net income of US$481-million, compared with the US$6.32 per share or US$944-million it posted a year ago.
The sharp decline stemmed from a US$477-million hit from its B-21 program, which saw higher manufacturing costs as the company looks to ramp up production.
With files from staff and wires