A roundup of some of the North American equities making moves in both directions today
On the rise
AltaGas Ltd. (ALA-T) jumped 6.1 per cent on Monday after announcing the sale of its portfolio of U.S. distributed generation assets to TerraForm Power Inc. (TERP-Q), an affiliate of Brookfield Asset Management, for total gross proceeds of approximately $940-million.
After the transaction, which is expected to close in the third quarter, AltaGas will have announced or completed approximately $1.3-billion of its $1.5-$2.0-billion asset sales program targeted for 2019.
“We are firmly focused on enhancing the value of our core asset footprint where we see the most attractive opportunities for long-term, stable earnings growth,” said president and chief executive officer Randy Crawford. “With today’s announcement, we are very close to achieving our 2019 asset sales target. We continue to execute against our near-term priorities, and I am confident that our 2019 funding and business plan is on track.”
Shares of TerraForm were up 0.3 per cent in New York.
Echelon Financial Holdings Inc. (EFH-T) jumped 26.7 per cent after saying an arbitration panel in Denmark has dismissed arbitration proceedings, with costs awarded to EFH, “on the basis that the third party had no standing to bring them.”
The company said the arbitration proceedings began in September 2018 in Denmark against EFH “alleging misrepresentations by the company at the time EFH sold Qudos Insurance to New Nordic Advisors Limited,” the company stated. “Although the share sale agreement specifically provided that it was not assignable, NNAL purported to assign it to a third party, who commenced the arbitration.”
Halliburton Co. (HAL-N) was up 9.2 per cent after exceeding the Street’s expectations for second-quarter profit.
Before the bell, the Houston-based oilfield services company said net profit fell to US$75-million, or 9 US cents per share, in the quarter ended June 30, from US$511-million, or 58 US cents per share, during the same period a year ago.
Excluding one-time items, the company earned 35 US cents per share, beating the Street’s estimate of 30 US cents.
“International revenue increased 6 per cent sequentially, confirming our expectation of high single-digit international growth for all of 2019,” said chairman and CEO Jeff Miller. “Momentum is building internationally and activity improvement should continue into 2020. Halliburton has the footprint and the expanded technology portfolio to capitalize on this international growth.”
Equifax Inc. (EFX-N) rose 0.4 per cent after revealing it’s set to pay up to US$700-million to settle with the U.S. and states over a 2017 data breach that exposed Social Security numbers and other private information of nearly 150 million people.
The settlement with the U.S. Consumer Financial Protection Bureau and the Federal Trade Commission, as well as 48 states and the District of Columbia and Puerto Rico, would provide up to US$425-million in monetary relief to consumers, a US$100-million civil money penalty, and other relief.
The breach was one of the largest ever to threaten the private information. The consumer reporting agency, based in Atlanta, did not detect the attack for more than six weeks. The compromised data included Social Security numbers, birth dates, addresses, driver license numbers, credit card numbers and in some cases, data from passports.
On the decline
Shares of SNC-Lavalin Group Inc. (SNC-T) dropped 6.7 per cent after it announced before the bell that it has withdrawn its forecast for 2019, citing the expectation for “significantly” lower results as it considers options for its resources unit and exits fixed-price contracts.
“SNC-Lavalin Group Inc. today announced that it is exiting lump-sum turnkey (LSTK) contracting and will reorganize the Company’s Resources (Oil & Gas and Mining & Metallurgy) and Infrastructure Construction segments into a separate business line following continued poor performance of these segments,” the Montreal-based company said in a release. “The Company is also exploring all options for its Resources segment, particularly its Oil & Gas (O&G) business, including transition to a services-based business or divestiture.”
In a research note, National Bank Financial analyst Maxim Sytchev said: “We argued the necessity of the company’s strategic direction to pivot towards consulting / nuclear; this step has now been taken. The guide take-down / write-down are disappointing, but at least the Board and the management team correctly concluded that future SNC will resemble much of a consulting-type entity vs. the lumpy, negative-FCF integrated E&C. The run-down of fixed-price contracts will take time, but there is no longer uncertainty to SNC shareholders what this company will look like in five years. The company will still need to finish the legacy projects and that means that negative reforecasts are not out of the picture. When looking at Tetra Tech precedent to run down the construction division, it took time for the market to re-rate the valuation; it did come through however (over time). We suspect a similar playbook should transpire with SNC (with the unfortunate dynamic being the long execution tail). There is no mention of 407 cash; we would expect the banks to provide relief in the interim.”
In the wake of Friday’s announcement that it plans to proceed with Geismar 3 Project in Louisiana, Methanex Corp. (MX-T) closed 6 per cent lower.
Raymond James analyst Steve Hansen said: "While the economics of this project appear compelling on a standalone basis, this commitment to build is obviously a bold decision at a time when methanol prices are scraping multi-year lows amidst global trade uncertainty. As such, while we suspect this decision will irk some shareholders, we respect the decision in the context that Methanex appears amply resourced to fund the project (across multiple price scenarios), all while keeping leverage prudent and maintaining a modest buyback program in place.”
Tervita Corp. (TEV-T) dipped 8.5 per cent after it announced the deadline has passed for the Canadian Competition Bureau to challenge its acquisition of Newalta Corp. completed on July 19, 2018.
The Calgary-based company said the transaction is now clear from any further CCB review.
“We are pleased that after a thorough review the CCB decided not to challenge the transaction. Since closing the transaction one year ago, the combined business has significantly enhanced value for our customers and shareholders, and we look forward to continuing to execute our growth plans,” said president and CEO John Cooper.
Aimia Inc. (AIM-T) finished 3.1 per cent lower after announcing it has filed a lawsuit against its largest shareholder that accuses the dissident investor of violating a contracted truce, the latest move in a battle over control of the company’s board of directors.
The loyalty rewards company said in the lawsuit filed Monday that Mittleman Brothers LLC agreed in March 2018 to a number of terms, including to refrain from seeking control of the board. However, it claims the New York investment firm, which owns 23.3 per cent of Aimia shares, began violating the terms almost immediately.
Boeing Co. (BA-N) shares were down 1.1 per cent after Fitch Ratings lowered its outlook for the company to “negative” from “stable” on Monday, citing regulatory uncertainty around the timing of its 737 MAX jets’ return to service.
The downward revision comes a week after Boeing said it would take a charge of $4.9 billion (£3.93 billion) in the second quarter to account for the grounding of its MAX jets this year.
The rating agency said MAX will remain a concern for the aviation sector in 2020, and expects a lingering impact on Boeing’s operating margin for several years after the jet returns to service.
With files from Brenda Bouw, staff and wires
David Leeder