A roundup of some of the North American equities making moves in both directions today
On the rise
General Motors Co. (GM-N) increased after it said on Thursday it would ramp up production of large- and mid-sized pickups in North America as demand rises, and it expects financial results for the first half of 2021 to be “significantly better” than forecast earlier.
The company said it was “optimistic” for the full year and expects to share more information during its second-quarter earnings conference call on Aug. 4.
The company will increase production of Chevrolet’s Silverado HD and Colorado and GMC’s Sierra and Canyon, it said, at a time a global shortage of semiconductor chips has slowed down production around the world.
The Detroit-based automaker had previously told investors it expected adjusted earnings before interest and taxes for the first half to be around US$5.5-billion.
Markham, Ont.-based Enghouse Systems Ltd. (ENGH-T) was higher on the premarket announcement of the acquisition of Nebu BV, an Amsterdam-based provider of market research and data analytics software solutions, for an undisclosed price.
“Nebu enhances our market research solutions and increases our footprint to better serve new and existing customers,” said CEO Steve Sadler. “We also see an opportunity to combine surveying and community technologies with our AI capabilities to help our customers to gain insights into the voice of the customer. We are very pleased to welcome Nebu’s customers and employees to Enghouse.”
On the decline
BRP Inc. (DOO-T) fell despite reporting a profit of $244.4-million in its latest quarter compared with a loss a year ago and raising its financial guidance for the year.
The maker of Ski-Doos and Sea-Doos says the profit amounted to $2.79 per diluted share for the quarter ended April 30 compared with a loss of $226.1-million or $2.58 per diluted share a year ago when the pandemic began.
Revenue in what was the first quarter of the company’s financial year totaled $1.81 billion, up from $1.23 billion in the same quarter last year.
On a normalized basis, BRP says it earned $2.53 per diluted share in the quarter compared with a normalized profit of 26 cents per share a year ago.
In its outlook, BRP says it now expects revenue for its full financial year to grow 28 to 33 per cent compared with earlier guidance for growth between 25 and 30 per cent.
The company also raised its expectations for its normalized earnings per diluted share for the year to between $7.75 and $8.50, up from its earlier forecast for between $7.25 and $8.
In a research note, Desjardins Securities analyst Benoit Poirier called the results “impressive.”
“We are very pleased with BRP’s 1Q results, which demonstrate the strength of the demand for its products and management’s ability to execute in a challenging production environment,” he said. “We believe the recent share price weakness (down 17 per cent since its 52-week high vs a 4-per-cent rise for the S&P/TSX over the same period) offers a very attractive buying opportunity for long-term investors as FY22 results do not represent peak earnings, in our view.”
Inter Pipeline Ltd. (IPL-T) was down after its board said early Thursday it still supports a takeover deal the company signed with Pembina Pipeline Corp. (PPL-T), despite an increased offer from Brookfield Infrastructure Partners (BIP.UN-T).
Inter Pipeline says the board continues to unanimously recommend the Pembina deal, which it says is strategic for both companies.
Brookfield Infrastructure raised its hostile offer for Inter Pipeline on Wednesday to top the company’s friendly deal with Pembina.
The new bid was valued at $19.75 per Inter Pipeline share including 74 per cent in cash and 26 per cent in shares. The proposal is up from an earlier offer valued at $16.50 per share.
Inter Pipeline’s all-stock deal with Pembina would see shareholders receive half a Pembina share for each Inter Pipeline share they hold.
Saputo Inc. (SAP-T) declined after it reported a profit of $103.1-million in its latest quarter, up from a profit of $88.7-million in the same quarter last year, as its revenue fell 7.5 per cent.
The cheese and dairy producer says the profit amounted to 25 cents per diluted share for the quarter ended March 31, up from 22 cents per diluted share a year ago.
The company says a decrease in international cheese and dairy ingredient market prices hurt its revenues.
Revenue for what was the company’s fourth quarter totalled $3.44-billion, down from $3.72-billion in the same quarter last year.
On an adjusted basis, Saputo says it earned 30 cents per diluted share, up from an adjusted profit of 28 cents per diluted share a year ago.
Last month, Saputo completed the acquisition of Bute Island Foods, a manufacturer, marketer and distributor of vegan cheese, and announced a deal to buy the Reedsburg, Wis., facility of Wisconsin Specialty Protein, which makes ingredients like goat whey, organic lactose and other dairy powders.
Delta Air Lines (DAL-N) was lower after it said on Thursday it expects to generate a pre-tax profit in the second half of 2021, with Chief Executive Ed Bastian pointing to a re-opening of corporate America by Labour Day in early September.
“I’d expect over the course of the next few months, certainly by Labor Day, no later than, we’re going to see corporate America open for business,” Mr. Bastian said at Bernstein virtual conference.
So far airlines’ recovery from the coronavirus pandemic has been led by domestic leisure travel demand, which Mr. Bastian said was better than expected in May and June.
“The U.S. consumer is leading the return of our air travel business, and I could not be happier with what we’re seeing happening as our business really is into a full-fledged recovery mode,” Mr. Bastian said.
The U.S. carrier forecast second-quarter pre-tax loss between US$1-billion and US$1.2-billion, compared to an earlier expectation of between US$1-billion and US$1.5-billion loss.
United Airlines (UAL-Q) also slipped after it said on Thursday it signed an agreement with Denver-based aerospace company Boom Supersonic to buy aircraft that would run on 100-per-cent sustainable aviation fuel as the company looks to cut carbon emissions.
Under the agreement, the airline will purchase 15 of Boom’s ‘Overture’ aircraft once they meet United’s safety, operating and sustainability requirements, with an option for an additional 35 aircraft.
Once operational, Overture is expected to be the first large commercial aircraft to be net-zero carbon from day one, optimized to run on 100-per-cent sustainable aviation fuel, United said in a statement.
U.S. startups Aerion, Boom and Spike Aerospace are working to reintroduce supersonic passenger travel for the first time since the Anglo-French Concorde retired in 2003.
The new Overture aircraft will cut travel times in half, United added.
Tesla Inc. (TSLA-Q) slid after the Information reported its vehicle orders in China nearly halved in May, when compared to April, against the backdrop of increased government scrutiny on the U.S. electric carmaker.
The company’s monthly net orders in China dropped to about 9,800 in May from more than 18,000 in April, the report said.
China is the electric car maker’s second-biggest market after the United States and accounts for about 30% of its sales. Tesla makes electric Model 3 sedans and Model Y sport-utility vehicles in a Shanghai plant.
Tesla had won strong backing from Shanghai when it built its first overseas factory there in 2019. Tesla’s Model 3 sedans were the best-selling electric vehicles in the country before being overtaken by a much cheaper micro EV.
However, the recent slump Tesla’s sales comes as Chinese regulators take a tough stance on the company over increased safety concerns and consumer complaints in the past few months coupled with growing tensions with Washington.
Tesla’s China sales had slumped in April from March as well.
Cybersecurity firm FireEye Inc. (FEYE-Q) plummeted on the late Wednesday announcement it would sell its products business, including the FireEye name, to a consortium led by private-equity firm Symphony Technology Group for US$1.2-billion in cash.
The deal will separate FireEye’s network, email and cloud security products from its cyber forensics unit, Mandiant Solutions.
The deal is expected to close by the end of the fourth quarter, the company said.
FireEye, one of the largest and best-known cybersecurity firms in the United States, also said its board had approved a share buyback program of up to US$500-million.
The company originally acquired Mandiant, founded by Kevin Mandia, who became FireEye’s chief executive, for about US$1-billion in early 2014. Mandiant will return as an independent company, focused on cyber-incident response and cybersecurity testing, and will be publicly traded following the deal.
Medtronic Plc (MDT-N) said on Thursday it was stopping the sale and distribution of one of its heart pumps due to safety concerns, sending its shares down.
The decision comes after the company’s clinical comparisons showed a higher rate of neurological adverse events with its heart pump HVAD System than with other circulatory support devices.
The HVAD System, implanted in patients with advanced heart failure to increase blood flow, may experience a delay to restart or a failure to restart after it is stopped, Medtronic said.
Pump restart failure can potentially worsen a patient’s heart condition, lead to a heart attack, require hospitalization and result in death, it added.
Medtronic acquired the HVAD System in 2016 as part of its US$1.1-billion purchase of heart pump maker HeartWare International Inc. The device is currently implanted in about 4,000 people.
“Medtronic is working closely with other stakeholders including Abbott, and with regulatory bodies globally, to help ensure that alternative treatment options are available,” it said in a statement.
With files from staff and wires