July WTI -1.6% to $36.22/bbl; August Brent -1.3% to $39.03/bbl.
OPEC+ will not hold an early meeting on June 4, and a scheduled gathering next week also appears threatened, unless all members first agree to cut output by as much as they promised, according to the report.
The group had been expected to prolong their cutbacks instead of easing them next month, but "the market has priced in an extension which may now not materialize," says Ole Hansen, head of commodities strategy at Saxo Bank.
Ascenty, a provider of data center services in Latin America and joint venture of Digital Realty (NYSE:DLR) and Brookfield Infrastructure (NYSE:BIP), will build two new facilities in the state of Queretaro, Mexico, anchored by long-term, U.S. dollar-denominated, multi-megawatt agreements.
Both initial phases are scheduled for delivery in 2021 and the two new facilities combined are expected to deliver up to 36 megawatts of total IT capacity upon full buildout.
The new data centers will be interconnected via an underground dark fiber-optic network, providing access to networks, cloud, and connectivity providers in a single, secure environment.
Wedbush Securities keeps an Outperform rating on Lyft (NASDAQ:LYFT) after the company's business update yesterday.
Analyst Dan Ives views the incremental improvement in rides as another major step in the right direction. "It's still a slow thaw, and with multiple macro levers over the course of the year, and likely an even longer return to normal environment, including business travel, there's still a long road ahead for rideshare," he notes.
Ives thinks Lyft management has pulled the right levers during the difficult period."Lyft has done an admiral job controlling and right-sizing expenses during the pandemic as well, and while some, like layoffs, were difficult decisions to make, Lyft ultimately made necessary moves and has positioned itself for better profitability once demand does return closer to normal on the other end of the pandemic, whenever it comes," reads his summary.
Wedbush has a price target of $38 on Lyft to rep 20% upside potential. The average sell-side PT is $41.62.
Red Robin Gourmet Burgers (NASDAQ:RRGB) says it expects to have re-opened approximately 270 dining rooms with limited capacity by June 7.
The reopenings represent ~65% of company-operated restaurants.
"To build on the momentum we are experiencing in off-premise and dine-in sales, we are now re-opening restaurants in our largest and highest volume markets in the Pacific Northwest and West Coast," notes Red Robin CEO Paul J.B. Murphy.
Red Robin is due to release FQ1 earnings on June 10.
Qudian (NYSE:QD) agrees to purchase 10.2M of newly issued class A ordinary shares of Secoo Holding (NASDAQ:SECO), Asia's largest online integrated upscale products and services platform, for an aggregate purchase price of up to $100M, or a per share price of $9.80.
QD rises 2.7% in premarket trading.
The transaction will Make Qudian Seeco's largest shareholder with a ~28.9% stake.
The two companies will also enter a business cooperation agreement in the online luxury e-commerce business.
"Our partnership will bring value to both Secoo and our Wanlimu platform, launched earlier this year, and also establish a good foundation for a better user experience for our customers," said Qudian Chairman and CEO Min Luo.
Campbell Soup (NYSE:CPB) reports organic sales growth of 17% in FQ3, with the meals and beverages segment seeing growth of 21% as demand for at-home food soared.
Gross margin was 34.7% of sales during the quarter vs. 34.1% consensus, and operating margin was 17.2% of sales vs. 15.9% consensus.
Looking ahead, Campbell Soup sees full-year revenue of +5.5% to +6.5% vs. prior guidance for -1% to +1%. EPS of $2.87 to $2.92 is anticipated vs. $2.55 to $2.60 prior view and $2.89 consensus. "Although the effect of the COVID-19 pandemic on our sales, adjusted EBIT and adjusted EPS cannot be predicted with certainty, this revised outlook reflects our current expectation of trends through the balance of the fiscal year," notes CPB.
Shares of Campbell Soup are up 3.81% premarket to $53.99 vs. a 52-week trading range of $39.24-57.54.
Canada Goose (NYSE:GOOS) reports adjusted EBIT of -C$9.7M for FQ4 vs. C$13.0M a year ago and -C$10.3M consensus.
Gross margin was 66.4% of sales during the quarter vs. 65.6% a year ago and 64.0% consensus.
The company's cash-on-hand as of June 1 on a pro forma basis was C$119.7M and undrawn revolving credit facility capacity was C$239.4M. The company remains confident that its cash flow profile and liquidity will be sufficient to address a varied range of COVID-19 scenarios that may occur through FY21. Canada Goose says the negative financial impacts of COVID-19 will be be more pronounced in FQ1, with a negligible level of revenue expected. The quarter is historically the smallest of the fiscal year for GOOS, representing 7.4% of annual sales last year.
Shares of Canada Goose are up 0.05% premarket to $21.60.
Campbell Soup (NYSE:CPB): Q3 Non-GAAP EPS of $0.83 beats by $0.06; GAAP EPS of $0.55 misses by $0.21.
Revenue of $2.24B (+14.9% Y/Y) misses by $20M.
Adjusted gross margin increased 100 basis points to 34.7%, driven by favorable product mix and improved operating leverage, as well as the benefits from supply chain productivity improvements and cost savings initiatives, offset partly by cost inflation and other supply chain costs.
OpGen's (NASDAQ:OPGN) collaboration with the New York State Department of Health's (“DOH”) Wadsworth Center and collaborator Infectious Disease Connect to develop a solution to detect, track, and manage antimicrobial-resistant infections at healthcare institutions statewide is entering into its second-year expansion phase.
The company plans to expand the reach of the platform, increase the volume of testing, and enhance data collection.
OpGen is providing its Acuitas AMR Gene Panel for rapid detection of bacterial pathogens, along with Acuitas Lighthouse Software for high-resolution pathogen tracking.
The second-year contract includes a quarterly retainer-based project fee, as well as volume-dependent per test fees for a total contract value of up to $450,000 to OpGen.
Ahead of its virtual fireside chat today at the Jefferies Healthcare Conference, Quest Diagnostics (NYSE:DGX) discloses that, since its Q1 report on April 22, it has continued to experience a material decline in testing volumes due to COVID-19 disruptions.
Volumes in its base business, however, have rebounded faster than expected, and if the trends continue, the company believes that Q2 non-GAAP EPS could be breakeven to slightly positive.
Nomura Holdings (NYSE:NMR) is permanently considering having fewer staff at its Tokyo headquarters as the pandemic has pushed ~80% of its staff to remote working, reports Reuters.
“Do we need such a lot of staff in Otemachi? Do we need that much workspace here? I would like to discuss those issues,” Kentaro Okuda told Reuters in an interview, adding that the company would conduct a review of the matter.
Reduced rent could help Nomura, which has struggled to expand successfully overseas and been hit by competition from online stock trading rivals.
The company is also planning to scale back retail branches in the wake of the pandemic, without providing details.
Glucose Health (OTCPK:GLUC) announces that CVS Health (NYSE:CVS) has agreed to distribute GLUCODOWN, its adult-diabetic nutrition retail line, as part of its expansion of diabetic care at its pharmacies. Financial terms are not disclosed.
PepsiCo (NASDAQ:PEP) has appointed Wern-Yuen Tan as Chief Executive Officer of Asia Pacific, Australia, New Zealand and China, effective June 15, 2020. He will be based in Singapore and will report to PepsiCo CEO Ramon Laguarta.
Prior to PepsiCo, Tan served as President and CEO of Walmart China.
Ram Krishnan, who has been serving as CEO of APAC, will now transition serve as Global Chief Commercial Officer of PepsiCo.
FSD Pharma (NASDAQ:HUGE) is up 116% premarket on the heels of its announcement that the FDA has permitted company to submit an Investigational New Drug (IND) Application for the use of FSD-201 (ultramicronized palmitoylethanolamide, or ultramicronized PEA) to treat COVID-19.
The agency has approved company to design a proof-of-concept study that will assess the efficacy and safety of FSD-201 dosed 600mg or 1200mg twice-daily plus standard of care (SOC) versus SOC alone in symptomatic patients.
The primary endpoint is to determine if FSD-201 plus SOC provides a significant improvement in clinical status (i.e., shorter time to symptom relief).
The treatment period is expected to be 14 days.
The company acquired worldwide rights (ex-Italy and Spain) to ultramicronized PEA from Epitech Group, an Italian pharmaceutical company.
China Online Education Group (NYSE:COE) announced a registered underwritten public offering of 428,571 ADSs by the company and 1,000,000 ADSs by certain selling shareholders, each ADS representing 15 Class A ordinary shares.
Underwriters' over-allotment is an additional 214,285 ADSs.
"Despite several issues of importance - national riots, Chinese relations, an ongoing pandemic - the stock market is primarily focused on a single thing: the restart of U.S. and global economic activities," said Jim Paulsen, chief investment strategist at the Leuthold Group.
The sentiment led S&P 500 futures to tack on another 0.6% gain overnight as Dr. Anthony Fauci expressed renewed "optimism" about a coronavirus vaccine.
On the economic calendar, the ADP Employment Report today will give a fresh read on the extent of the COVID-19 pandemic, while oil climbed 2% to above $37/bbl on anticipated output cuts at the upcoming OPEC+ meeting.
Granite REIT Holdings Limited Partnership, a wholly owned subsidiary of Granite Real Estate Investment Trust (NYSE:GRP.U), has priced an offering of C$500M of 3.062% Series 4 senior unsecured debentures due June 4, 2027.
Expected closing date is June 4, 2020.
Net proceeds will be used to finance or refinance, in whole or in part, expenditures associated with Eligible Green Projects.
Splunk (NASDAQ:SPLK) has priced $1.1B principal amount (from $900M) of 1.125% Convertible Senior Notes due 2027.
Initial purchasers have an option to purchase up to an additional $165M of notes.
The initial conversion rate is 3.9164 common shares per $1,000 principal amount of notes (~$255.34/share).
Estimated net proceeds of ~ $1.08B will be used to pay the cost of the capped call transactions, to repurchase for cash up to $488.3M of 2023 Notes, for working capital or other general corporate purposes.
The Trump administration is opening a "Section 301" investigation into taxes on digital commerce proposed by a range of trading partners that could affect revenues booked by tech giants like Facebook (NASDAQ:FB), Google (GOOG, GOOGL) and Amazon (NASDAQ:AMZN).
The move could ultimately lead to punitive tariffs and heighten the chances of another global trade dispute.
France already agreed to postpone its new digital tax until at least the end of 2020 after the U.S. threatened to impose tariffs of up to 100% on imports like French wine, cheese, handbags and porcelain.
Pliant Therapeutics (PLRX) has priced its IPO of 9M common shares at $16.00/share, for expected gross proceeds of $144M.
Underwriters' over-allotment is an additional 1.35M shares.
Trading kicks off today.
Additionally, Pliant has also agreed to sell an additional 625K common shares in a concurrent private placement at $16.00/share to one of its existing investors, Novartis Institutes for BioMedical Research.
One of the most widely prescribed antidepressant medications in the U.S. has fallen into short supply, according to a new list from the FDA.
Pfizer (NYSE:PFE) said some versions of its name-brand Zoloft, such as 100 milligram tablets in 100-count bottles, were scarce because of higher demand during COVID-19, while generics faced shortages of certain ingredients.
Zoloft prescriptions climbed 12% Y/Y to 4.9M in March, the most ever in the U.S., according to data compiled by Bloomberg, but receded to 4.5M in April.
The Shanghai-London Connect program, years in the making, has so far produced only one listing - Huatai Securities - which raised $1.5B last June.
China's market regulator has now approved a fresh listing for China Pacific Insurance, signaling a revival to the program.
While the ties could bring the nations closer, other news overnight may go in the other direction. Boris Johnson pledged to let into the country nearly 3M Hong Kong citizens - who are British overseas passport holders - due to China's new national security law, and place them on a possible path to U.K. citizenship.
Many have doubted that the U.S. could go negative like Japan and parts of Europe, but St. Louis Fed economist Yi Wen says that's what it would take to achieve a V-shaped economic recovery.
"I found that a combination of aggressive fiscal and monetary policies is necessary. Aggressive policy means that the U.S. will need to consider negative interest rates and aggressive government spending, such as spending on infrastructure."
Wen cited historical examples like President Roosevelt's aggressive fiscal stimulus package during the 1930s and huge surge in government spending once World War II began.
Thieves who made off with iPhones from Apple (NASDAQ:AAPL) retail locations in New York, Los Angeles, Minneapolis, Washington and Philadelphia quickly learned that they were loaded with special security software.
On-screen messages displayed: "This device has been disabled and is being tracked. Local authorities will be alerted."
The social unrest sweeping across the nation comes just as Apple is in the process of opening more than 100 stores following an extended closure due to the coronavirus pandemic.
Google (GOOG, GOOGL) has been sued in a proposed class action for illegally invading the privacy of millions of users by pervasively tracking their internet use through browsers set in "private" mode.
"As we clearly state each time you open a new incognito tab, websites might be able to collect information about your browsing activity," said spokesman Jose Castaneda, adding that the company will defend itself vigorously against the claims.
The legalization of sports betting in California cleared an important hurdle when a proposal from state Senator Bill Dodd and Assemblymember Adam Gray made it through a key committee.
The clock is ticking for the bill with June 25 set as the last day for the California legislature to pass the sports betting bill and send it to the voters on the November 3 election ballot.
California is forecast to have the potential for a +$30B sports betting market through sports books placed at tribal casinos, horse racing tracks and satellite wagering facilities. "California could easily become one of the most productive sports-betting markets in the world," observes gaming analyst Chris Grove. Tax revenue from sports betting would also help the Golden State with its budget issues amid the pandemic and economic downturn. It could also give Nevada casino operators something to think about.
Related stocks of interest: DraftKings (NASDAQ:DKNG), William Hill (OTCPK:WIMHF), MGM Resorts (NYSE:MGM), Caesars Entertainment (NASDAQ:CZR), FanDuel (DUEL), Red Rock Resorts (NASDAQ:RRR), Boyd Gaming (NYSE:BYD), Wynn Resorts (NASDAQ:WYNN).
Federal Aviation Administration chief Steve Dickson will testify June 17 before a U.S. Senate panel on certification of the Boeing (NYSE:BA) 737 MAX.
Dickson "will testify about issues associated with the design, development, certification, and operation" of the MAX, the Senate Commerce Committee says.
Senate Commerce chairman Roger Wicker introduced legislation today to require the FAA to review assumptions on pilot reaction time and reform its certification processes to "eliminate instances of undue pressure or 'regulatory coziness' that could lead to lapses in safety protocols."
"I think we're seeing the light at the end of the tunnel," CFO Ghislain Houle said today at the UBS Global Industrials & Transportation virtual conference. "Hopefully, it will hold."
But CN Rail will be "patient" before returning locomotives, cars and laid-off crews back to its network, Houle said, adding that he expects June volumes to come in "less worse" than May but still lower than a year ago.
Meanwhile, Canadian Pacific Railway (NYSE:CP) actually set a new record for shipping Canadian grain and grain products in May, moving 2.8M metric tons, beating the old record from May 2014 by more than 300K mt.
Michael Mulholland had been named interim CFO on April 23 with the departure of CFO Craig Eastwood. He was given the permanent role last week, according to a new filing.
Mulholland had joined the company in December 2012 and had served as CFO, treasurer and corporate secretary before, until November 2019, when he took the position of SVP Finance and executive advisor to the CEO.
Ampco-Pittsburgh (NYSE:AP) down 6.2% on announcing that it is contemplating a rights offering.
Ampco-Pittsburgh is considering offering any or all of the following securities: common stock, dividend yielding preferred stock, warrants and/or dividend yielding convertible preferred stock.
"We are exploring a potential rights offering to raise additional capital to accelerate our restructuring efforts, improve overall liquidity, and reduce indebtedness. If we proceed with this offering, our shareholders will have the first opportunity to purchase additional securities to maintain or increase their current percentage ownership in our company," said Brett McBrayer, Ampco-Pittsburgh’s CEO.
Freegold Ventures (OTCPK:FGOVF) closed a fully subscribed second tranche of its previously announced brokered private placement for additional gross proceeds of $5.75M, including over-allotment proceeds.
Including proceeds from the first tranche, the aggregate proceeds of the offering are $10.75M
Eric Sprott has invested $6M in the Private Placement; assuming conversion of the Subscription Receipts, Mr. Sprott will increase his interest in the Company to ~28%.
The Company intends to use the net proceeds to fund ongoing exploration, to update technical studies, and for general corporate purposes.
CSI Compressco (NASDAQ:CCLP) +7.4% AH as at least 57.9% of the Unsecured Notes are expected to be accepted for previously announced exchange offer for its 7.250% Senior Unsecured Notes due 2022.
Support agreement representing ~$147.4M of Unsecured Notes, or 49.8%, have agreed to tender all of the Unsecured Notes held by them and not withdraw such Unsecured Notes.
Based on the Unsecured Notes tendered to date and the Supporting Holders' commitment, ~57.9% of the Unsecured Notes would be tendered and accepted for exchange, and resulting in the issuance of $50M of New First Lien Notes and ~$113M of New Second Lien Notes in the Exchange Offer.
The company told brands it would launch a fashion sale June 22, to run anywhere from 7-10 days, and that participation in the event was "invitation only."
It's building landing pages with a working title "Biggest Sale in the Sky," and has asked brands to meet an end-of-Wednesday deadline to submit deals with a discount of at least 30%. Other details aren't clear, such as whether the sale will be restricted to Prime members.
The news follows reports that Amazon warehouse operations are starting to return to normal after it prioritized essential equipment shipments with the U.S. onset of the COVID-19 outbreak.
The company says rideshare rides have increased week-over-week for seven straight weeks since April 12.
Given May's improved performance, Lyft now expects its Q2 adjusted EBITDA loss will not exceed $325M if average daily rideshare ride volume in June is unchanged from May; the company previously forecast a Q2 adjusted EBITDA loss not exceeding $360M based on April ride trends.
AeroVironment (NASDAQ:AVAV) announced the promotion of Ken Karklin, Senior Vice President, to the role of chief operating officer, effective immediately.
Mr. Karklin has served as senior vice president of operations since December 2018. He served in a variety of leadership roles with increasing responsibility at AeroVironment since joining the company in 2009.
Arco Platform (NASDAQ:ARCE) announced the commencement of an underwritten public offering of 5,563,203 Class A common share to be offered by General Atlantic Arco (Bermuda), L.P and Alfaco Holding Inc.
Arco will not receive any proceeds from the sale of Class A common shares by the Selling Shareholders.
Microchip (NASDAQ:MCHP) +6% now expects FQ1 consolidated net sales in the range of $1.247B to $1.326B from the prior $1.194B to $1.3B.
Non-GAAP EPS in the range of $1.35 to $1.53 (prior: $1.25 to $1.45).
Steve Sanghi, CEO: “With two months of the quarter behind us, our business is performing better than we expected during our May 7, 2020 earnings conference call. COVID-19 related supply chain disruptions which were primarily in Malaysia and Philippines have eased. We have begun to make up for lost production and expect to continue to gain ground through the end of this quarter.”
Zoom Video Communications (NASDAQ:ZM) is up 4.5% after hours following its beat on top and bottom lines in Q1, and upbeat guidance for the current quarter and year well above consensus.
Revenue grew by 169% to $328.2M, and operating income (non-GAAP) rose to $54.6M from a year-ago $8.2M.
Net income was $58.3M, vs. a year-ago $8.9M.
In operating metrics, it reported 769 customer contributed more than $100K in trailing-12-months revenue (up about 90% Y/Y), and a trailing-12-month net dollar expansion rate in customers with more than 10 employees over 130% for the eighth straight quarter.
For Q2, it's guiding to revenue of $495M-$500M - well above consensus for $224.4M - and EPS of $0.44-$0.46 (vs. consensus for $0.11).
For fiscal 2021, it's forecasting revenue of $1.775B-$1.8B (assumes increased churn due to a higher percentage of customers buying monthly subscriptions in Q1), above consensus for $939.7M, and EPS of $1.21-$1.29 (above an expected $0.44).
Stocks rose for a third straight session as investors focused on the easing of coronavirus lockdowns and overlooked continued protests and riots throughout the country.
Dow +1%, S&P 500 +0.8%, Nasdaq +0.6%.
Stocks were led by gains in energy (+2.8%), as crude oil rallied amid reports OPEC+ is seeking to extend its production cuts by a month to September 1; WTI crude closed +3.8% to $36.81/bbl.
All 11 S&P sectors finished higher but communications services (+0.4%) lagged as Facebook (+0.3%) CEO Mark Zuckerberg held an hour-long call with U.S. civil rights leaders to discuss their issues with the website but only added to their frustrations.
U.S. Treasury yields rose modestly, with the 10-year yields finishing 2 bps higher at 0.68%.
Capital Southwest (NASDAQ:CSWC) supports Osceola Capital's recapitalization of Central Medical Group with a senior secured first lien term loan, revolver, and capex line, along with a minority equity investment.
CSWC led the financing and will act as the sole administrative agent on the credit facilities.
CrowdStrike Holdings (NASDAQ:CRWD) is up 3.9% after hours following its easy beat of expectations for Q1 earnings, including raised guidance for fiscal 2021.
Revenues jumped 85% to $178.1M, and the core subscription revenues rose 89%.
Operating income swung to a gain of $1.2M, vs. a year-ago loss of $21.9M.
And non-GAAP net income swung to a gain of $4.5M from a year-ago loss of $22.1M.
It added 830 net new subscription customers (105% growth) to land at 6,261 total by quarter's end. Subscription customers that have adopted four or more cloud modules rose to 55%, and those subscribed to five or more modules rose over 35%.
Cash and equivalents came to $1.005B.
For Q2, it's guiding to revenue of $185.8M-$190.3M; a (non-GAAP) operating profit of -$3.1M to break-even; and net loss of $3.8M to $0.7M.
For fiscal 2021, it now sees revenues of $761.2M-$772.6M; operating loss of $19.2M to $11.1M; and net loss of $18.1M to $9.9M.
The FDA has notified Novartis (NYSE:NVS) that it needs more time to review its supplemental marketing application seeking approval to use Arzerra (ofatumumab) to treat patients with relapsing forms of multiple sclerosis (MS).
The new action date will be in September.
The CD20-directed cytolytic antibody is currently approved in the U.S. for chronic lymphocytic leukemia.
The company expects a regulatory nod in Europe by Q2 2021.
Jefferies Financial Group (NYSE:JEF) is involved in a legal battle with Cantor Fitzgerald that spans from New York to Hong Kong after 26 of its bankers left to join the investment banking team at Cantor in 2017, Bloomberg reports, citing court documents.
Jefferies is accusing Cantor of a "concerted effort" to keep its former employees from repaying bonuses it says it's owed. Details came out after Cantor lost an attempt to have a London lawsuit set aside on jurisdiction grounds.
In the U.S., Cantor alleges that the repayment agreements between Jefferies and its ex-employees are unlawful.
The London lawsuit was filed against Cantor's global and Hong Kong operations along with three former employees. The case is being pursued in the U.S., where Jefferies has brought 10 cases before a tribunal, and Hong Kong.
Montage Resources (NYSE:MR) says that due to return of its previously curtailed production to sales sooner than anticipated, it is increasing its FY 2020 production guidance to 565 – 585 MMcfe per day, up ~2% over the midpoint of its previous guidance of 555 – 575 MMcfe per day
Expects Q2 2020 production to average between 535 – 555 MMcfe per day
Ambarella (NASDAQ:AMBA) is down 4% postmarket after reporting Q1 earnings where profits came in ahead of expectations, but the company's current-quarter guidance fell short.
Revenues rose nearly 16% to $54.6M, and the company swung to a non-GAAP profit of $1.3M (from a year-ago loss of $0.1M).
But for Q2, it's guiding to revenue of $47M-$53M (light of consensus for $57.1M), non-GAAP gross margin of 59-60.5%, and operating expenses of $31M-$33M.
While duration, severity and impact of the pandemic/recession are unknown, "Our visual AI computer vision strategy continues to be validated, as our CV design activity remains strong and five new CV customers entered production in Q1," says CEO Fermi Wang.
Liquidity at quarter's end was $411.3M, vs. last quarter's $404.7M and a year-ago $366.2M.
Energy stocks (XLE +2.8%) topped today's S&P sector leaderboard as OPEC and its allies reportedly edge closer to a consensus on extending production cuts to prop up the oil market.
WTI crude oil (CL1:COM) settled +3.8% to $36.81/bbl and Brent added +2.7% to $39.57/bbl.
Russia and several other nations in the group are said to favor extending their current production cuts by another month through Sept. 1, a move that some analysts say would lend further support to oil prices as demand continues to climb.
"We do not believe there will be repeat of the March meltdown," RBC head of global commodity strategy Helima Croft writes. "We think they will seek to split the difference by agreeing to a one to three-month extension."
But with crude rallying lately, OPEC and Russia face another challenge as U.S. oil shale companies including EOG Resources and Parsley Energy are tentatively re-starting some of their wells.
Kforce (NASDAQ:KFRC) says Technology Flex revenue is down 2% and and FA Flex revenue is off 22% on a quarter-to-date basis.
Based on recent trends, the company now expects to exceeds Q2 revenue and EPS estimates.
CEO update: "Our position as a 100% domestically focused organization with approximately 80% of our business being concentrated in higher-end technology staffing and solutions gives us great confidence moving forward. We will continue to prioritize allocating capital in this business to capture even greater market share post pandemic."
Anika Therapeutics (NASDAQ:ANIK) announces that CFO Sylvia Cheung plans to resign effective August 21. The company has initiated a search for a successor. If one has not been identified prior to her departure date, it may ask her to continue in an advisory role to ensure a smooth transition.
While the S&P 500 gained 4.5% in May and 36% since its March low, ETF investors were wary and instead put their capital into bond ETFs and gold funds, according to U.S.-Listed Monthly Flash Flows report from State Street Global Advisors.
Fixed income ETFs pulled in a record-setting $28.7B in May, adding up to more than $50B in the past two months and the largest ever back-to-back total.
Gold funds took in $5B after record inflows in April, bringing the two-monthy total to $12.4B, also their largest back-to-back total ever.
Equity ETFs saw $2.32B of outflows last month, with non-U.S. exposures losing $9B and U.S. funds getting $7B of inflows.
The severely weakened oil market is a "short-term" disruption that does not change the need for Enbridge's (ENB +1%) Line 3 pipeline across northern Minnesota, the company tells the state's Public Utilities Commission.
In a filing, Enbridge acknowledged the disruptions caused by the pandemic but says the "new information" provided by longtime opponents of the project "fails to support any claim that the project is not now needed."
Environmental groups, the Red Lake and White Earth bands of Ojibwe and the Minnesota Department of Commerce last month filed for a "reconsideration" of Line 3, calling on regulators to reverse their earlier approval because it was even more unnecessary now that the Canadian oil industry had imploded and crude demand had collapsed worldwide.
WSP says it plans to use the offering proceeds in part to "fund potential future acquisition opportunities," and the speculation is it has eyes for rival Aecom, Briefing.com reports.
WSP's offering "raises some eyebrows," Bank of America analyst Michael Feniger writes, noting WSP stock is nearly back to pre-COVID levels while Aecom shares are ~25% below (before today) its pre-COVID high of early February.
BofA's Michael Feniger reiterates his Buy rating for Aecom, saying "the stars are aligning for ACM's value to be realized - at the very least, for the cash return story to take hold."
Toyota (NYSE:TM) reports U.S. auto sales fell 25.7% in May and Hyundai (OTCPK:HYMLF) saw a drop of 12.9%. Mazda (OTCPK:MZDAY) only showed a drop of 1% for the month, despite the stay-at-home orders in place in large parts of the U.S.
The sales marks aren't as bad as was expected, especially if fleet sales are backed out.
Overall. U.S. auto sales are forecast to have dropped more than 30% for the month, although the tally won't be known for sure as many automakers only update sales on a quarterly basis now.
Canntab Therapeutics (OTCQB:CTABF +11.6%) announces that it has begun the production of its instant release tablets and has entered into its first purchase agreement with MediPharm Labs (OTCQX:MEDIF), a global leader in pharma quality cannabinoid based products.
Canntab received its first order under the agreement, and the value of the full agreement will exceed $1M. MediPharm will purchase and distribute cannabis products on a non-exclusive basis across Canada, through licensed provincial dispensaries.
The exact value of shipments under the agreement will be determined no later than June 30, 2020 and will depend on the final concentrations of Canntab's instant release tablets chosen by MediPharm.
AMERI Holdings skyrockets (AMRH +126.9%) in a reaction to its proposed amalgamation partner Jay Pharma receiving institutional review board ("IRB") approval for a Phase 1/2 trial investigating Jay Pharma's proprietary cannabidiol ("CBD") formulation for glioblastoma multiforme, a rare form of brain cancer.
The open-label, two-arm, randomized, prospective study is expected to enroll 40 patients who are currently undergoing chemotherapy treatments.
Half the patients are expected to be treated with Jay Pharma's orally administered synthetic CBD derived from citrus, and half will be treated with CBD in combination with clomiphene, an estrogen binding site inhibitor.
Facing internal unrest over the company's gentle approach to moderating posts from President Trump, Facebook (FB -0.6%) CEO Mark Zuckerberg told employees he stood behind his decision, one he called "tough" but "pretty thorough."
On the internal call, Zuckerberg said the company plans to review to see if policies need changes for the future.
Facebook employees have increasingly indicated dismay with Zuckerberg's inaction on messages posted by Trump that threatened violence, including the words "when the looting starts, the shooting starts." Similar posts on Twitter were flagged for violating policy.
Enbridge (ENB +0.8%) says it will raise tolls on its 2.9M bbl/day Mainline system by $0.18/bbl, or 3.9%, starting July 1, based on an index of Canada's economic growth in a formula approved by regulators in 2011.
The Canadian economy rose 1.7% last year but has contracted so far this year due to the coronavirus, but Enbridge says the formula will keep prices from rising even higher.
The provision "shields shippers from throughput risk which, in current circumstances with decreased oil demand and declining volumes on the Mainline, would have otherwise resulted in a significant toll increase under the previous negotiated settlement," a company spokesman says.
Enbridge's toll increases are not matched by some other Canadian pipeline operators: Trans Mountain Pipeline last month cut rates by 32% for shipping light crude from Edmonton to Sumas, B.C., and TC Energy plans to keep rates to Texas unchanged for uncommitted shippers starting July 1 on its Keystone pipeline after lowering them April 1.
Susquehanna analyst Sam Poser calls Shoe Carnival (SCVL +4.6%) the best positioned family footwear company and one of the few well-positioned retailers in the firm's coverage universe.
"The negative impact from Covid-19 has been an equal opportunity challenge. SCVL has controlled the controllables better than every competitor in the channel, in our view," updates Poser.
Poser thinks Shoe Carnival's advantage over its competitors will become more evident as Caleres and Designer Brands report earnings over the next two weeks. Also on the positive side, it's noted that SCVL has efficiently opened stores where permitted and conversion rates are at some of the highest levels that SCVL management has ever seen.
Susquehanna keeps a Positive rating on Shoe Carnival and assigns a price target of $31.
HollyFrontier (HFC +3.7%) moves higher after Tudor Pickering upgrades shares to Buy from Hold with a $38 price target, up from $34, citing net asset value accretion after the company converts its Cheyenne refinery into a renewable diesel plant.
HollyFrontier may see lower refining EBITDA from closing Cheyenne, but the amount should be "fairly small" over the next two years, TPH analyst Matt Blair says.
RBC analyst Brad Heffern, who rates HollyFrontier at Outperform, says the news is neutral but it locks the company into a "high renewable diesel spend over the next two years."
HFC's average Wall Street analyst rating and Seeking Alpha Authors' Rating are both Bullish, while its Quant Rating is Neutral.
Facing subscriber losses, Sling TV (DISH -0.9%) has moved out President Warren Schlichting.
Taking his place is Michael Schwimmer, who had returned to Dish Network last summer to lead international business development and strategy.
Sling for a time was intended to help make up for subscriber declines at Dish's legacy satellite TV business. But in Q4 2019, Sling posted its first decline (a net loss of 94,000 accounts), and that accelerated to 281,000 net losses in Q1.
Sling subscribers as of March 31 were down 4.7% Y/Y to 2.31M.
Variety notes that Sling TV launched a number of free promotions in the COVID-19 pandemic to try to reverse the drain, and that Schlichting told the publication “I don’t know where this is going to land,” and that within the company, “we’re either going to win a lot of friends or get thrown off the end of the boat.”
EOG, which began shutting in a quarter of its wells in March to take 125K bbl/day off the market in May, also recently reduced its hedge position, eliminating some protection against lower prices in a sign of confidence the price recovery will take hold.
The news comes as Permian producer Parsley Energy (PE +4.4%) also said it is turning wells back on just weeks after closing them down.
The optimism is due partly to the broader problems in the U.S. shale industry.
"We see very little capital flowing into the industry and we see higher declines from all the shale players throughout the rest of the year," Boedeker says.
Troilus Gold (OTCQB:CHXMF -8.9%) increases the size of the previously announced financing, and have agreed to purchase, on a bought deal basis, 21M units at $1.05/unit for gross proceeds of ~$22M
Each Unit will consist of one common share and one-half of one common share purchase warrant exercisable at $1.50.
Underwriters have an option to purchase an additional 3.15M units; if over-allotment option is exercised in full, the aggregate gross proceeds will be $25.36M.
The Company intends to use the net proceeds to advance engineering efforts at Troilus, commence geotechnical drilling at the deposit, continue infill and exploration drilling and for working capital and general corporate purposes.
Baird breaks down what Google search trends looked like over the last four weeks in what could be an indicator for Q2 sales demand.
Companies/brands with a big increase in searches include Hibbett Sports (NASDAQ:HIBB) +124% Y/Y, Tractor Supply (NASDAQ:TSCO) +54%, Freshpet (NASDAQ:FRPT) +52%, Williams-Sonoma (NYSE:WSM) +50% and Target (NYSE:TGT) +48%. Products showing a big burst of activity include table saw (+85%), treadmill (+79%), chicken feed (+75%), patio furniture (+73%) and grocery delivery (+65%).
Over the last two weeks, Google searches for Bed Bath & Beyond (NASDAQ:BBBY) and Dick's Sporting Goods (NYSE:DKS) accelerated, while searches for Costco (NASDAQ:COST) and Home Depot (NYSE:HD) cooled off.
Wells Fargo (WFC +1.4%) notified hundreds of independent auto dealerships last month that it will no longer accept loan applications from most independent shops, CNBC reports, citing people with knowledge of the situation.
The lender is taking the action due to concern over credit quality of the loans as millions of people have lost their jobs as a result of lockdowns to slow the spread of COVID-19.
Independent dealerships typically sell used cars, unlike franchise dealerships, which focus on new vehicles from specific manufacturers.
"The independent dealers we will continue doing business with are those with deep, long-standing relationships with Wells Fargo," Wells Fargo spokeswoman Natalie Brown said in an email to CNBC.
Wells Fargo also had stepped back from some parts of the mortgage market since the COVID-19 pandemic. At the end of April, it temporarily stopped accepting applications for new home equity lines of credit.
Ventas (VTR +4.7%) received substantially all April and May rents from its triple-net senior housing tenants, according to its REITweek presentation.
Its office segment received 98% of April rents and as of May 27, 94% of its tenants paid rent, in line with April.
Expects senior housing operating portfolio ("SHOP") average monthly occupancy to decline 100 basis points, driving $2M-$3M revenue decline per month depending on mix and timing for 400 total assets.
SHOP occupancy at May 21 was 79.2% vs. 84.0% at April 2.
Meanwhile SHOP total operating expenses are ~10% higher to combat the pandemic.
As of May, Ventas tested more than 12,000 employees and more than 1,400 residents for COVID-19 at a total cost of $1M-$2M; 3K additional tests are currently in-process with additional testing being evaluated.
88% of its U.S. SHOP communities are past the peak of COVID-19 mortality projections per day, based on IHME 05/26/20 model; meanwhile, 90% of its U.S. senior housing triple net communities are past the peak of COVID-19 mortality projections based on the same model.
Freddie Mac (OTCQB:FMCC -0.5%) has appointed Christian M. Lown as EVP and CFO, effective June 15, 2020, succeeding Donald F. Kish, who has served as Interim CFO since December 2019 and will continue to serve as Senior Vice President, Corporate Controller and Principal Accounting Officer.
Lown was previously EVP and CFO at Navient Corporation.
Avaya Holdings (NYSE:AVYA) and Windstream Enterprise (OTCPK:WINMQ) announced an expanded partnership along with a joint product development framework to help customers accelerate a path to the cloud.
Windstream Enterprise was the first to offer cloud-based services based on Avaya's Aura platform.
Now the two will leverage a recent expansion of the Avaya IX subscription program, a consumption-based alternative allowing customers to flex license usage up or down and quickly add new technology to their subscription bundle.
Credit Suisse lifts estimates on Outperform-rated Kellogg (K -0.6%).
The firm has a price target of $76 (19X the 2021 EPS estimate), which is above the food stock's 52-week high. So far in 2020, low-beta Kellogg has tracked pretty close to the S&P 500 Index.
The price target boost is based off raised estimates on Kellogg, with 2020 organic sales growth of 3.7% now seen vs. 3.5% prior and EPS of $3.81 vs. $3.78 prior and $3.77 consensus. CS also sees EPS of $4.02 for 2021 vs. $3.89 consensus.
Helping to underpin the higher estimates on Kellogg, the outlook for Africa from management was better than anticipated. Kellogg is also noted to be maintaining a positive but realistic tone regarding U.S. cereal (19% of sales).
American Campus Communities (NYSE:ACC) climbs 3.1% after the company's presentation for REITweek shows preleasing rates aren't that far behind that of a year ago.
At May 31, 2020, its same-store-owned portfolio was 82.6% preleased vs. 84.9% at the same date a year ago.
Only two of ACC's same-store properties are affected by California State University System's decision to hold classes primarily online in the fall; says 47 of the 68 universities served by ACC are planning for a return to in-person classes for fall 2020, while 12 are considering a range of possible scenarios or a hybrid model.
Believes most students plan to return in the fall regardless of the curriculum being delivered in-person, online, or in a hybrid format.
Since the company's April 21 earnings call, the REIT has signed more than 5,500 additional leases bringing its total to more than 10,000 leases for fall 2020.
Says ~94.8% of residents made April rent payments, representing April delinquency of ~$3.0M.
Estimates that 93.3% of residents made May payments, representing delinquency of ~$3.8M.
Expects to refund about $13M-$17M of rent on certain ACE properties.
The amount of natural gas flowing on pipelines to U.S. liquefied natural gas export plants has hit a nine-month low of 4.3B cf/day, due to weak global demand in the wake of COVID-19 lockdowns, data provider Refinitiv says.
Most of the feedgas decline was at Cheniere Energy's (LNG +5%) export plants at Sabine Pass in Louisiana and Corpus Christi in Texas, according to the report.
Buyers in Asia and Europe have already canceled more than 20 U.S. LNG cargoes for both June and July, and more cancellations are anticipated.
Cboe Global Markets (NYSE:CBOE) slips 1.8% after JPMorgan analyst Kenneth B. Worthington downgrades the stock to Neutral from Overweight as "trading volumes and open interest as a leading indicator remain tepid."
Doesn't see the reopening of Cboe trading floors next week "as a meaningful enough catalyst to drive volumes above current expectations," Worthington writes.
Points to MEMX launch scheduled for late Q3 as increasing risks for trading volumes and the stock.
Growth through acquisition will be "particularly challenging to pull off."
Adding all that up, and with CBOE reaching Worthington's price target, he moves to a Neutral rating.
Morgan Stanley reiterates an Overweight rating on Mondelez International (MDLZ -1.0%) on its view the company will add more market share.
Analyst Dara Mohsenian says the firm's market share analysis gives it increased confidence that MDLZ can post solid 3% organic sales growth in 2020 even with COVID-related slower category growth in gum & candy and emerging markets risk.
"We forecast MDLZ organic sales growth momentum building back up to 4% in 2021 as we see structural reasons for why MDLZ share gains should continue, albeit at a more moderate pace, and category growth should recover vs. temporary 2020 COVID-related weakness. With more attractive relative valuation after YTD stock underperformance, with MDLZ roughly one standard deviation below its LT averages vs. both US-centric food and broader CPG peers, we see a buying opportunity here."
Mohsenian notes MDLZ valuation is at a large ~17% CY21 P/E discount to multinational large-cap CPG peers, despite a closing gap from a fundamental standpoint.
As Mondelez's topline acceleration crystallizes with a 2021 rebound, MS expects the market to shift to a multinational peer set and drive multiple expansion on Mondelez.
Dominion is hoping for a positive U.S. Supreme Court ruling soon to help reinstate permission vacated by a federal circuit court for the pipeline to cross the Appalachian Trail, but conservation groups are saying a supplemental EIS is needed in light of new information that has come to light since the Federal Energy Regulatory Commission issued an EIS for the project in 2017.
Part of the groups' rationale for a new review, according to S&P Global Platts, is that new information has come to light that they contended must be considered under the National Environmental Policy Act, involving endangered species along the pipeline route, more understanding about climate change, and changing circumstances related to cumulative impacts from projects in the area.
Splunk (SPLK +1.2%) intends to offer $900M convertible senior notes due 2027 in a private placement, and initial purchasers have an option to purchase up to an additional $135M notes.
The company plans to use a portion of the net proceeds to pay the cost of the capped call transactions and to repurchase up to $500M outstanding 0.500% convertible senior notes due 2023, and remainder for working capital or other general corporate purposes.
Activision Blizzard (ATVI -1.7%) has delayed key game season openers this week amid widespread U.S. protests.
Season 4 of Call of Duty: Modern Warfare and Warzone, and season 7 of Call of Duty: Mobile will be postponed, the company says: "Now is not the time."
"We are moving the launches of Modern Warfare Season 4 and Call of Duty: Mobile Season 7 to later dates. Right now it’s time for those speaking up for equality, justice and change to be seen and heard. We stand alongside you," the company says.
Tellurian (TELL -7%) tumbles after Stifel downgrades shares to Sell from Hold with a Street-low $0.10 price target, saying it is unlikely to see greenfield U.S. liquefied natural gas projects move ahead for at least two years.
Tellurian has nearly a year's worth of liquidity but its Indian deal looks unlikely, and its odds of amassing all necessary contracts before liquidity runs out seems "highly unlikely," Stifel's Ben Nolan says.
The rally in Sturm, Ruger & Company (RGR +6.4%) isn't over yet, according to Lake Street.
"May demand for firearms exceeded our expectations significantly. Historically speaking, this level of demand is unprecedented and has continued longer than we expected. With the outbreak of civil unrest very late in May, we think the high demand is likely to continue into June. Although it is hard to weigh the drivers in demand, we think there is still some unfilled demand from COVID, recent buying due to civil unrest and continued and perhaps heightened buying due to the upcoming election and potential for increased regulation following the election."
Lake Street thinks high consumer demand for firearms is likely to continue through the U.S. election.
Lake Street raises its price target on Buy-rated RGR to $80 from $68 vs. the average sell-side PT of $68.40.
CEO Yoav Zeif says the cuts will not affect the progress of its upcoming launch plans, "which remain a top priority as we lead the industry to new heights with our best-in-class additive manufacturing solutions."
In upgrading Stratasys to Overweight from Neutral with a $22 price target, JPM analyst Paul Coster praises the company's cost reductions ahead of what he anticipates will be several positive catalysts associated with new product introductions during H2.
Movie-theater owner Reading International (RDI +3.3%) has begun limited cinema operations in New Zealand, and will begin operating certain Reading cinemas in Australia on June 11.
That comes alongside the easing of COVID-19 restrictions.
The remainder of its New Zealand cinema circuit will reopen on Thursday. In Australia, a phased reopening will begin with four cinemas on June 11, with seven opening in Victoria from June 15-22, and the remaining 12 cinemas (in Queensland, Tasmania and New South Wales) reopening after further local easing.
“The aggressive approach of the New Zealand government to suppress the virus, alongside the successful efforts of Australia’s government, have paved the way for Reading to re-start these important operational divisions that have long underpinned our global cash flow," says CEO Ellen Cotter.
"And, with the U.S. economy now re-opening, we also look forward to a gradual and safe ramping up of our U.S. cinema business and the completion of our 44 Union Square project in New York City.”
It expects to begin a phased reopening of its 24 U.S. cinemas in July.
Lands' End (LE -10.4%) reports Q1 net revenue decrease of 17.3% Y/Y to $217M, due to decreased demand attributable to the COVID-19 pandemic.
U.S. eCommerce net revenue declined 16.5% Y/Y and International eCommerce net revenue remained ~flat.
Comparable store-sales growth of 14.2% in February before closing mid-March.
Outfitters net revenue declined 26.2% Y/Y.
Gross margin decreased ~230 bps to 43.4% due to additional promotional activity throughout the industry and additional inventory reserves.
Adj. EBITDA decreased to a loss of $11.6M compared to positive $3M Y/Y.
Cash and equivalents were $59.1M; Net cash used in operations was $80.2M and Inventories, net, was $383.2M as of May 1, 2020.
The Company had borrowings of $75M and $116.3M of availability under its asset-based senior secured credit facility and other short-term debt of $384.1M at May 1, 2020.
Q2 2020 Outlook: Net revenue: to decline mid to high single digits; Global eCommerce business: high single digit growth Y/Y; Retail and Outfitters businesses: to decline; SG&A expense rate: to be in line Y/Y.
Barclays keeps an Overweight rating on CSX (CSX +1.6%) on its view that the company now delivers near industry-leading profitability.
The firm raises its price target on CSX to $76 from $67. The average price target on CSX is $70.19.
"While difficult to detect since the beginning of freight market challenges last year and continuing headwinds during the pandemic, we suspect CSX's strategy to leverage lower cost and improve service outcomes will lead to future volume expansion," notes analyst Brandon Oglenski.
Looking ahead, targeted truck to rail conversion opportunities in the merchandise business is seen potentially leading to sustainable growth outcomes for CSX during the next cycle, similar to expansion achieved by both Canadian National and more recently Canadian Pacific.
That offer comes from its indirect sports subsidiaries, Diamond Sports Group and Diamond Sports Finance, to exchange any and all 6.625% senior notes due 2027 for newly issued 12.75% senior secured notes due 2026 and cash.
As of the extended early tender time (5 p.m. yesterday), about $66M of the outstanding notes (about 3.62%) had been validly tendered with corresponding consents delivered.
That doesn't meet the amount required to approve proposed amendments. The company will continue to solicit consents until expiration on June 9.
Donaldson (DCI +3.4%) reported Q3 revenue decline of 11.7% Y/Y to $629.7M, or decline of 9.7% on constant currency basis.
Engine Products sales were $420.4M (-14.1% Y/Y); and Industrial Products sales $209.3M (-6.3% Y/Y).
Sales percent change by geography: US/Canada -12% Y/Y; EMEA -12.5% Y/Y; APAC -8.1% Y/Y and LATAM -15.8% Y/Y.
Q3 Gross margin declined by 55 bps to 33.2%; and operating margin declined by 60 bps to 13.4%.
Q3 EBITDA was $110.6M (-11.7% Y/Y); and margin was flat at 17.6%.
Net cash provided by operating activities for the quarter was $88.4M, compared to $80.4M a year ago. Free cash flow was $61.9M.
Total liquidity, cash on hand and availability under a $500M revolving credit facility, was $469M. The net-debt-to-EBITDA leverage ratio was 1.0 as of April 30, 2020.
Company says May 2020 sales to be down about 24%, reflecting relative outperformance in replacement parts versus new equipment, APAC sales are expected to be the strongest while sales in the Americas are expected to be the weakest.
"One of the reasons why we modeled SpaceX's (SPACE) launch and satellite deployment was to find out when they might need access to outside capital," Morgan Stanley's Adam Jonas told CNBC in response to a question about a SpaceX IPO.
"It doesn't guarantee a timing, but in our minds, we're thinking to do the ambitious plans they have and the capital intensity of tens of billions of dollars to put people into orbit - and even on earth to work with those systems - we're thinking a couple of years."
Thinly traded nano cap RegeneRx Biopharmaceuticals (OTCQB:RGRX -1.3%) is down on average volume on the heels of its announcement that, due to COVID-19 disruptions, the completion date of its Phase 3 clinical trial, ARISE-3, evaluating lead candidate RGN-259 in dry eye syndrome has been moved out ~two months.
RGN-259 is a sterile, preservative-free topical eye drop whose active ingredient is Thymosin beta 4 (TB4), a protein that plays a key role in healing.