First Look With Surveillance: US Jobs, Political Tension
Canada’s labour market just delivered another surprise: a net 30,600 jobs were shed last month, according to Statistics Canada. The median estimate among economists tracked by Bloomberg was for a gain of 15,000. Meanwhile, the unemployment rate held steady at 4.9 per cent as the participation rate slipped. In his instant analysis with us at 8:30 a.m. EDT, ex-StatsCan chief economic analyst Philip Cross cautioned that the labour force survey is “notoriously noisy” — especially in the summer. Nonetheless, the Canadian dollar tumbled against the U.S. dollar immediately after the numbers were released. But that, no doubt, has something to do with July non-farm payroll growth in the U.S. coming in at 528,000; Wall Street was expecting 250,000.
SUNCOR DOING DEALS, RAKING IN CASH
There’s no special dividend like what Canadian Natural dished out yesterday, but there’s no shortage of cash flowing into Suncor Energy’s coffers. Its adjusted funds from operations more than doubled to $5.3 billion in the second quarter, and its operating profit trounced expectations as commodity prices and output climbed. And while most of the focus in the earnings release commentary was about improving safety protocols, Suncor also squeezed in some M&A news — announcing it reached a deal to sell its Norway assets for $410 million, and saying it’s shopping around its entire U.K. portfolio. We’ve got BMO’s Randy Ollenberger lined up for reaction at 11:30 a.m. EDT.
AT LEAST CANOPY HAS BIOSTEEL
Canopy Growth swung to a loss in its fiscal first quarter thanks to an impairment representing all of the goodwill value of its cannabis operations: $1.725 billion. It had to do that because of the washout in its market value during the quarter. If we pull the chart out a little further, we see that its stock price has collapsed 95 per cent since the mid-October 2018 euphoria surrounding the legalization of recreational use in this country. But, if you’re hunting for a bright spot in Canopy’s quarter: revenue from its BioSteel business surged 169 per cent to almost $18 million.
The 2019 decision to shed Canada from its corporate name in favour of TC Energy is making even more sense after TC announced a new partnership in Mexico that will see it team up with state-owned utility company CFA that will see them, among other things, go ahead with the US$4.5-billion offshore Southeast Gateway Pipeline. To help fund its part of the tab, TC Energy announced it’s raising $1.8 billion in a bought-deal sale of 28.4 million common shares priced at $63.50 apiece.
MORE FROM THE EARNINGS BONANZA
Sticking with energy: Enerplus, the Calgary-based oil and gas producer that’s seeking to sell its Canadian assets, announced its quarterly dividend is going up 16 per cent to US$0.05 per share. That’s after reporting a sharp drop in net debt during the second quarter and a surge in cash flow. Enerplus also announced it’s now planning to return 60 per cent of free cash flow to shareholders (from 50 per cent previously) and nudged up its 2022 production forecast.
These aren’t the easiest of times to be an investment banker. Check out the latest from Canaccord Genuity, where overall fiscal first-quarter revenue sank 37 per cent. Dig a little deeper, and we see the near-evaporation of revenue in the company’s Canadian capital markets unit: down 87.7 per cent (sequentially) to $14.3 million. In the release, president and CEO Dan Daviau blamed the performance on an “abrupt deceleration in global markets” during the quarter. We’ll learn more when Daviau joins us at 9:40a.m. ET.
Telus is touting record total customer additions (247,000) in the second quarter — 93,000 of which came from the wireless division, where postpaid churn was steady at 0.64 per cent. Overall adjusted earnings before interest, taxes, depreciation and amortization rose almost nine per cent to $1.62 billion, essentially in line with estimates.
Ritchie Bros announced a small bump in its quarterly dividend (to US$0.27 per share from US$0.25) while reporting a 22 per cent surge in second-quarter revenue as the heavy equipment auctioneer’s gross transaction value climbed 10 per cent to US$1.7 billion.
It’s not just Maple Leaf Foods that’s struggling in the alternative protein world. Beyond Meat slashed its full-year revenue forecast and said it’s cutting about four per cent of its headcount. Its second-quarter operating loss swelled to almost US$90 million from US$18.6 million a year earlier; interestingly, sales as measured in pounds jumped almost 15 per cent.
Just like its primary ride-hailing rival, Lyft isn’t showing any sign of a slowdown in these uncertain economic times. It said second-quarter active riders surged 16 per cent to almost 20 million, and revenue per user also climbed. That helped it reach the highest adjusted EBITDA in its history.
Profitability is still a mixed picture at DoorDash (depending whether you look at net, gross, or adjusted EBTIDA), but that’s seemingly being brushed aside by investors after the food-delivery service reported a 30 per cent surge in second-quarter revenue.
OTHER NOTABLE STORIES
- Parkland will be a stock to watch after announcing it’s issuing 20 million shares to Simpson Oil Ltd. to take full ownership of Sol, which is billed as the largest independent fuel marketer in the Caribbean. Parkland also said its adjusted profit more than double to $166 million in the second quarter.
- Amazon is buying Roomba vacuum maker iRobot in a US$1.7-billion takeover that’s worth US$61 per share.
- Notable data: Canadian Labour Force Survey, U.S. non-farm payrolls
- Notable earnings: Telus, TransAlta, Brookfield Renewable Partners, Power Corp., Telus International, Canopy Growth, Premium Brands Holdings
- 1000: Greater Toronto Airports Authority Deborah Flint provides progress report at Toronto Pearson Airport