A roundup of some of the North American equities making moves in both directions today
On the rise
Montreal-based CAE Inc. (CAE-T), the world’s largest civil aviation training company, rose 3.4 per cent on Friday after reporting a better-than-expected profit, driven by strength in its commercial pilot training and simulators business.
CAE is inking deals to train pilots for airlines like easyjet Plc, as air traffic rises.
Both CAE and U.S.-based Textron Inc’s TRU training division are also seeing an increase in demand for flight simulators after Boeing earlier this year recommended that airline pilots retrain before flying the grounded 737 MAX plane, which is being fixed by the planemaker for a software problem.
Revenue in CAE’s civil aviation training business jumped about 22 per cent to $558.1-million in the third quarter ended Dec. 31.
CAE reaffirmed its full-year outlook for 30-per-cent growth in operating income in the civil aviation training business.
Uber Technologies Inc. (UBER-N) jumped 9.5 per cent after it moved forward by a year its target to achieve a measure of profitability to the fourth quarter of 2020, but the ride-hailing company still expects to lose a total of more than US$1-billion this year.
After the bell on Thursday, Chief Executive Officer Dara Khosrowshahi said the company would cut costs, aim to generate more repeat-customer business and try to increase use of premium ride services.
He also said Uber would accelerate growth at the company’s loss-making food delivery business, Uber Eats, to become the top player in most of its worldwide markets, eventually increasing the segment’s margins, currently a drag on Uber earnings.
Mr. Khosrowshahi revealed the new profitability target on a conference call with investors after the company reported results for the fourth quarter of last year, in which it continued to lose money, but increased its customer base
On the decline
Aurora Cannabis Inc. (ACB-T) plummeted 15.4 per cent after it said chief executive Terry Booth is stepping down and the company is cutting 500 full-time jobs as it looks to stabilize its balance sheet.
The company also said it expects to take a $740-million to $775-million writedown on goodwill, and an impairment charge of between $190-million and $225-million.
Before the bell on Friday, several equity analysts downgraded Aurora stock in response to the news.
Canada Goose Holdings Inc. (GOOS-T) was down 4.3 per cent after it said on Friday lower store traffic in China and travel restrictions due to the coronavirus epidemic would impact its revenue and lead to a smaller profit in 2020.
The virus outbreak has forced several luxury brands, including Capri Holdings and Ralph Lauren, to shut stores and cut their forecasts.
The parka maker expects revenue to grow between 13.8 per cent and 15 per cent, compared with its prior forecast of at least 20-per-cent growth.
That translates to $945-million to $955-million, a hit of up to $51.6-million. Analysts were expecting $1.03-billion, according to IBES data from Refinitiv.
It forecast full-year adjusted profit growth to be in the range of 2.2-per-cent decline to 0.7-per-cent rise from a year earlier, compared with a prior forecast of at least 25-per-cent growth.
The forecast of $1.33 per share to $1.37 per share was below the average analysts’ estimate of $1.68.
Domtar Corp. (UFS-T) dropped 6.6 per cent after it reported a net loss of $34-million or 59 cents per share for the fourth quarter of 2019 compared net earnings of $87-million or $1.38 per share for the fourth quarter of 2018. Sales for the fourth quarter of 2019 were $1.2 billion, which was in line with expectations and down from $1.4-billion for the year-ago period.
Adjusted earnings of $2-million or 3 cents per share for the fourth quarter compared to earnings of $103-million or $1.63 per share for the fourth quarter of 2018. Analysts were expecting adjusted EPS of 8 cents.
Ford Motor Co. (F-N) dipped 1.7 per cent after announcing the top executive Jim Farley will assume the position of chief operating officer, positioning him as potential heir to Chief Executive Jim Hackett.
Mr. Farley, president of new businesses, technology and strategy, has been viewed as one of the potential successors to Mr. Hackett, who took over in 2017. The news comes three days after Ford offered investors a disappointing 2020 profit outlook.
Ford also said that another executive, Joe Hinrichs, president of automotive, will retire. Many employees and outside observers had seen him as a favourite to succeed Mr. Hackett.
“Jim Farley is the right person to take on this important new role,” Mr. Hackett said in a statement. “Jim’s passion for great vehicles and his intense drive for results are well known. He also has developed into a transformational leader with the imagination and foresight to help lead Ford into the future.”
Boeing Co. (BA-N) was down 1.4 per cent after it flight testers discovered another flaw in the software of its grounded 737 MAX, the plane that suffered two fatal crashes, though the company and the top U.S. aviation regulator said on Thursday the issue most likely could be fixed without extending the target date for the plane’s return to service.
U.S. Federal Aviation Administrator Steve Dickson mentioned the new flaw at an airline industry event in London, but said he did not think it “will be a significant delay” in the aircraft’s return.
Spirit AeroSystems Inc. (SPR-N), Boeing Co.’s (BA-N) largest supplier, slid 1.1 per cent after it said on Friday it would slash its quarterly dividend to just 1 US cent per share as it grapples with the grounding of the planemaker’s 737 MAX jets.
“The Company’s Board will consider further action with respect to the dividend in the future, upon the MAX’s return to service and further production stabilization,” Chief Executive Officer Tom Gentile said in a statement.
Spirit last paid a dividend of 12 US cents per share
Take-Two Interactive Software Inc. (TTWO-Q) fell 11.9 per cent after the videogame publisher missed estimates for quarterly adjusted revenue amid competition from big-budget titles from rivals Activision Blizzard Inc. (ATVI-Q) and Electronic Arts Inc. (EA-Q).
After the bell on Thursday, the company narrowed its full-year forecast range to US$2.80-billion to US$2.85-billion from US$2.75-billion to US$2.85-billion, the midpoint of which is below analysts’ average estimate of US$2.85-billion.
Activision reported better-than-expected fourth-quarter adjusted revenue on Thursday, riding on the success of its blockbuster title Call of Duty: Modern Warfare.
The strong launch of Star Wars Jedi: Fallen Order during the crucial holiday season helped rival Electronic Arts to beat third-quarter adjusted revenue estimates in January.
Activision shares were up 2.1 per cent, while EA was 0.8 per cent lower.
EBay Inc. (EBAY-Q) lost 4.8 per cent after New York Stock Exchange owner Intercontinental Exchange Inc (ICE-N) decided to stop exploring deal options for the ecommerce company.
ICE confirmed on Tuesday it had approached eBay to explore “a range of potential opportunities,” following reports it had mulled a more than US$30-billion takeover of the online marketplace, but that eBay was unresponsive.
“I didn’t think it’s particularly shocking and outrageous,” Chief Executive Officer Jeffrey Sprecher told analysts on a post-earnings call.
Intercontinental shares rose 2.9 per cent.
Interfor Corp. (IFP-T) slid 1.8 per cent after it recorded quarterly results that fell short of expectations on the Street.
Raymond James analyst Daryl Swetlishoff said: "4Q19 adj. EBITDA of $17.6-million compared to Raymond James estimates at $15-million and consensus of $19-million. Compared to 3Q19 EBITDA of $16.8-million, results were largely in-line with the prior quarter despite a decrease in shipment volumes, in addition to a lower average lumber selling price.
“We rate Interfor Strong Buy, reflecting our constructive lumber market outlook, attractive organic growth opportunities, and higher relative exposure to the U.S. and strong balance sheet. In the wake of unprecedented sawmill curtailments, North American lumber shipments are poised to decline. At the same time, U.S. housing activity levels have gained steam in recent months. We expect these factors will allow benchmark lumber pricing to continue its upward trend. With Interfor as one of the few pure lumber plays, we encourage investors to add to positions.”
With files from Brenda Bouw, staff and wires
David Leeder