These are stories Report on Business is following Wednesday, Dec. 11, 2013.
Gun stocks gain
Yesterday marked the second-quarter results of Smith & Wesson Holding Corp., highlighted by an increase of 27.4 per cent in handgun sales, including those of its "popular" M&P pistols.
Today marks a spike in Smith & Wesson's share price, continuing a run that has seen the stock climb by about 45 per cent this year, while those of rival Sturm, Ruger & Co. are up almost 60 per cent, bolstered by the introduction this year of three new weapons and plans to open a new factory.
Saturday will mark the remembrance, one year later, of the lost children of Sandy Hook Elementary School.
No matter where you stand on the issue of gun control in America, you can't escape the unsettling nature of that.
- Robert Cyran in ROB Insight (for subscribers): U.S. gun maker shares fade with hopes of reform
- U.S. gun manufacturers see sales shoot through the roof
Politicians strike deal
Investors are celebrating (though in muted form) a deal struck by U.S. politicians that should head off another government shutdown.
There are still several questions, and approval is required, but the agreement has bolstered hopes heading into the new year.
"The deal, struck between negotiators from the House and the Senate, doesn't appear to particularly favour either side and is going to draw criticism from members of both parties," said market analyst Craig Erlam.
"However, it is an important first step in ensuring that we don't go through another shutdown, similar to October, that saw the popularity of both major parties drop significantly and almost 800,000 workers sent home without pay," he added in a research note today.
"One thing the deal does do is remove one more element of uncertainty that could have otherwise weighed on the recovery," he added, though noted there's no deal on the debt ceiling.
The agreement would fix spending through to late 2015, while still setting "modest" deficit-reduction measures, said senior economist Sal Guatieri.
It would not, however, extend the emergency jobless benefits, he added, which, on expiry, could cost up to 0.2 per cent from gross domestic product in 2014.
"If passed, the budget deal could scale back nearly half of the estimated 0.6-per-cent fiscal hit on GDP next year," Mr. Guatieri noted.
"Of equal importance, it could ward off political brinkmanship and fiscal policy uncertainty for at least a year, unleashing a wave of business investment and hiring."
HBC loss widens
Hudson's Bay Co. today boasted of "continued sales momentum" heading into the crucial holiday period, as its third-quarter loss widened on costs associated with its takeover of Saks.
The Toronto-based retailer posted a loss of $124.2-million or $1.04 a share, compared to $14.4 million or 14 cents a year earlier.
But chief executive officer Richard Baker lauded HBC's "industry-leading sales growth," which, he said, are evidence of its strategic moves.
Sales climbed 5.8 per cent from a year earlier to $984.1-million. Same-store sales, a key measure in retailing, rose 6.4 per cent at its Hudson's Bay shops and 1.6 per cent at its Lord & Taylor operations.
Mr. Baker also noted the company completed its deal for Saks, and it's now focused on integrating the high-end chain into its operations.
"The critical holiday period is now upon us, and we are focused on making it a success," Mr. Baker said in a statement.
"While we would prefer our year-to-date performance to have been stronger, our investments in both store productivity and our omni-channel platform have produced clear and promising results. We are confident that these investments are necessary and will benefit earnings over the long-term."
HBC also projected fourth-quarter sales of between $1.37-billion and $1.41-billion.
Encana expands on restructuring
Encana Corp. today expanded on its previously-announced overhaul, saying it expects a hit of $65-million (U.S.) in charges related to the restructuring.
This follows the revamp announced last month by Doug Suttles, the new chief executive officer of the Canadian energy giant.
In November, Encana cut its dividend, said it would focus on just five plays, with a focus on liquids-rich gas, and announced plans to slash 20 per cent of its work force, among other things.
Today, Encana reiterated that it would earmark 75 per cent of its 2014 spending to five plays.
Total liquids production is forecast to increase by 30 per cent
"The goal of all our deliverables for 2014 is targeted at creating sustainable shareholder value for next year and beyond," Mr. Suttles said today in a statement.
"The work we completed in 2013 has positioned us very well for a strong start in 2014, a start well aligned with our new strategy."
GM quits Australia
General Motors Co. is pulling out of Australia, citing, among other things, a strong currency that has driven up its costs.
GM plans to stop making autos and engines there by the end of 2017.
"The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world," chief executive officer Dan Akerson said in a statement.
Some 2,900 jobs will be affected.
- GM to halt production in Australia, says business case 'not viable'
- Greg Keenan: For GM's first female CEO, pressure is to keep auto company on a roll
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