A survey of North American equities heading in both directions
On the rise
CAE Inc. (CAE-T) jumped almost 14 per cent after shaking up its board, bringing in aerospace veteran Calin Rovinescu and a U.S. activist fund manager as directors as the Canadian pilot training company hunts for a new chief executive officer at a pivotal time for its North American business.
Mr. Rovinescu, who led Air Canada as CEO for 12 years until his retirement in 2021, will join CAE as chairman effective Feb. 14, the Montreal-based company said in a statement late Thursday. He replaces Alan MacGibbon, who’s been a director since 2015.
Peter Lee, a co-founder of Los Angeles-based investment firm Browning West LP, will also join the board following a co-operation and standstill agreement with the company, CAE said. He’ll co-chair the board’s CEO search committee with Mary Lou Maher, an existing director, and work closely with Mr. Rovinescu to continue the recruitment process previously overseen by the board’s human-resources committee, the company said.
“Browning West is pleased to have aligned with the board on the critical changes announced today,” Mr. Lee said in a statement e-mailed to The Globe and Mail. “We are confident that CAE has the right foundations to unlock the substantial value creation potential of the company.”
In all, CAE will replace four directors on its 13-member board. Pension giant Caisse de dépôt et placement du Québec, CAE’s biggest institutional shareholder with a 9.7-per-cent stake, named technology entrepreneur Louis Têtu as its representative. Katherine Lehman, a partner at New York-based private equity firm Palladium Equity Partners, is also joining as a director, CAE said.
Browning West disclosed in December that it had amassed a 4.3-per-cent economic interest in CAE and sent the company a letter asking for a formal role in succession planning for long-time CEO Marc Parent, who’s set to retire in August. CAE has the potential to grow earnings and free cash flow “well in excess of current market expectations” in the medium term but it needs to recruit the best possible leader to achieve that, Browning’s co-founders said in the letter.
CAE says it earned $168.6-million in its third quarter, up from $56.5-million during the same quarter last year.
The company says revenues were $1.2-billion, up 12 per cent from $1.1-billion a year earlier.
Earnings per share from continuing operations were 53 cents, up from 18 cents.
- With files from Nicolas Van Praet
Fairfax Financial Holdings Ltd. (FFH-T) gained 3.5 per cent after saying it earned US$1.3-billion in the fourth quarter of 2024, down from US$1.7-billion during the same quarter in 2023.
The company says the profit amounted to US$50.42 per diluted share, down from US$52.87 per diluted share.
Gross premiums written totalled US$7.5-billion, up from US$6.6-billion a year earlier.
Fairfax says its adjusted operating income for property and casualty insurance and reinsurance amounted to US$1.5-billion, up from US$1.2-billion.
The company earned US$4.3-billion for the full fiscal year, down from US$5.1-billion in 2023.
Gross premiums written rose in 2024 to US$32.8-billion, up from US$29.2-billion in 2023.
In a note, Scotia analyst Phil Hardie said: “The company ended the year with a quarter characterized by exceptional underwriting profitability and robust operating earnings that offset investment losses and lifted book value per share by 2.6 per cent from last quarter. EPS was ahead of Street expectations., with book value coming roughly in line with consensus.
“A key highlight from the quarter was the operating income which rose almost 26 per cent year-over-year and came in well ahead of our forecast. We expect this to remain a key growth driver in book value through our forecast, albeit with some variation due to quarter-to-quarter variances in underwriting profitability. Another notable development was the much stronger-than-expected underwriting profitability which appears to be an emerging trend.”
Fortis Inc. (FTS-T) was up 1.2 per cent after it reported a fourth-quarter profit of $396-million, up from $381-million a year ago.
The electric and gas utility says the profit amounted to 79 cents per share for the quarter ended Dec. 31, up from 78 cents per share a year earlier.
Fortis says the increase was due to rate base growth as well as new customer rates at its Central Hudson operations in New York effective July 1, 2024.
Revenue in the quarter totalled $2.95-billion, up from $2.89-billion a year earlier.
On an adjusted basis, Fortis says it earned 83 cents per share in its latest quarter compared with an adjusted profit of 72 cents per share in the last three months of 2023. The Street was projecting 81 cents.
Fortis serves utility customers in five Canadian provinces, 10 U.S. states and three Caribbean countries.
In a research note, RBC analyst Maurice Choy said: “With EPS being largely in line with our estimate and consensus, the company reaffirming its 2025-2029 outlook, and incrementally positive updates relating to the Tranche 2.1 MISO investments and load growth in Arizona, we expect the news to have a neutral to slightly positive impact on the company’s share price.”
Moderna (MRNA-Q) reported a bigger-than-expected quarterly loss on Friday, hit by a charge related to its efforts to scale down manufacturing amid weakening demand for its COVID-19 vaccine.
The company reported a quarterly loss of US$2.91 per share, compared to analysts’ expectations of a US$2.68 per share loss, according to data compiled by LSEG. The company posted a profit of 55 US cents per share last year.
Finance chief James Mock in an interview attributed the loss to a US$238-million non-cash charge related to the termination of its agreement with a contract manufacturer.
“As we looked at our manufacturing footprint, we believed we did not need that particular (manufacturer) and tried to eliminate the potential waste related to that capacity,” he said, declining to identify the manufacturer.
The company’s shares rose 3.4 per cent.
Moderna first announced it would start scaling down manufacturing of its COVID-19 vaccine, Spikevax, in late 2023, including at Lonza’s facility in Switzerland, as part of a larger cost-cutting effort that reduced the cost of sales by 47 per cent to US$1.5-billion last year.
The vaccine maker plans to keep lowering expenses this year, saying in January that it would cut cash costs by US$1-billion, as well as by an additional US$500-million in 2026. It also slashed its 2025 sales forecast by US$1-billion at that time.
Moderna’s stock fell nearly 60 per cent last year as sales of its COVID-19 vaccine crashed from their peak during the pandemic and its respiratory syncytial virus (RSV) shot got less uptake than expected.
Shares of Moderna, along with other vaccine makers, dropped further this year as lawmakers advanced President Donald Trump’s pick for Health and Human Services Secretary, Robert F. Kennedy, through Congress. Kennedy, a vaccine critic, was confirmed to the role on Thursday.
Airbnb (ABNB-Q) shares jumped 14.5 per cent on Friday after the vacation home rentals company beat Wall Street estimates for fourth-quarter results, boosted by strong international travel demand.
Travel companies have been helped by healthy demand in Asia, especially from Chinese consumers visiting destinations in Southeast Asia.
Airbnb said that nights booked by outbound Chinese tourists rose 25 per cent in the fourth quarter. It also saw a 30-per-cent growth in nights booked for domestic travel in Latin America, led by Brazil, compared to last year. First-time bookers in the region grew by nearly 15 per cent sequentially.
The short-term rentals platform said growth in expansion markets was twice that of their core markets.
“This instills confidence in our forecast for international markets to add tens of billions in bookings over the next several years,” said Morningstar analyst, Dan Wasiolek.
Airbnb also said it plans to invest US$200-million to US$250-million towards a new travel-related business which would be launched in May.
The company expects to launch one or two businesses every single year for the next five years, CEO Brian Chesky said on the post-earnings conference call.
“I think that each business could take three to five years to scale. A great business could get to a billion dollars of revenue,” he added.
William Blair analyst Ralph Schackart said, “over the longer term, the company has the opportunity to add incremental growth drivers such as experiences, among others, and the stock should grow at least in line with revenue growth.”
Shares of Airbnb trade at about 32.06 times their forward profit estimates, compared to an industry median of 17.99 times.
On the decline
Shares of Air Canada (AC-T) lost 2.6 per cent as an executive said on Friday it sees encouraging booking trends and yield signals for the second and third quarters of 2025, after reporting core profit for the year above analysts’ estimates on sustained passenger travel demand.
Airlines with international routes are capitalizing on the growing demand for global travel, as consumers place greater emphasis on experiences rather than material goods.
“We’re seeing the revenue environment experienced in Q4 2024 is continuing into 2025,” Mark Galardo, executive vice president, revenue & network planning, told analysts.
On Thursday night, Canada’s largest carrier forecast 2025 core profit above analysts’ estimates, helped by a rebound in business bookings and strong passenger demand for international travel.
The airline expects its 2025 adjusted earnings before interest, taxes, depreciation and amortization in the range of $3.4-billion to $3.8-billion, compared with analysts’ average estimates of $3.5-billion.
Mr. Galardo said it was too early to discuss the impact of possible U.S. tariffs on metals imported from other countries and the prospect of retaliatory duties.
Air Canada reported a quarterly operating revenue of $5.40-billion in the quarter ended December 31, up 4 per cent from a year earlier.
In a research note, Stifel analyst Daryl Young said: “Q4 was a solid finish to the year with AC delivering a healthy 9-per-cent EBITDA beat (strong revenue and slightly higher margins) and full-year 2025 guidance unchanged. We expect a positive share price reaction ... reflecting the strong Q4/24 revenue/EBITDA beat and given management’s commentary that the demand environment remains favourable (which we presume means bookings have stayed strong). However, we acknowledge that share performance could be tempered by the significant uncertainty around potential impacts of the weak C$ and geopolitical tensions on demand across H2/25 (plus USD cost/capex headwinds as cash flow hedges roll off).”
TC Energy (TRP-T) declined 3.1 per cent after it beat analysts’ estimates for fourth-quarter profit on Friday, boosted by strong demand in its Mexican operations and higher deliveries on its Canadian natural gas pipelines.
The results come as the country’s energy sector faces uncertainty after U.S. President Donald Trump imposed 25-per-cent tariffs on Canada and Mexico and then delayed them by a month.
Calgary-based TC Energy said it was assessing the trade negotiations and the impact of the proposed tariffs, but expected minimal impact.
The company said on Friday its Southeast Gateway Pipeline in Mexico had achieved mechanical completion and was expected to go into service by May.
TC Energy reiterated it was well-positioned to capitalize on the unprecedented demand for natural gas across North America, primarily driven by electric generation associated with booming demand from cryptocurrency mining and data centers.
The pipeline operator’s total revenue rose 2 per cent to $3.58-billion boosted by higher adjusted core earnings from Mexican natural gas pipelines and power and energy solutions segments.
However, profit fell at its U.S. and Canadian pipelines segments due to the sale of Portland Natural Gas Transmission System and lower earnings from the Coastal GasLink natgas pipeline.
The company posted an adjusted profit of $1.05 per share, compared with analysts’ estimates of $1.00, according to data compiled by LSEG.
TC Energy increased its quarterly dividend by 3.3 per cent to 85 cents.
In a research note, RBC analyst Maurice Choy said: “We expect the news will have a neutral to slightly positive impact on the company’s share price, reflecting: (1) the Q4/24 results, which saw EPS being ahead of consensus amid an in-line EBITDA performance; (2) favourable project updates, including the mechanical completion of the Southeast Gateway project and being at the low end of the project’s recently reduced cost estimate range; (3) increase in dividend that is largely consistent with our expectations; and (4) the reaffirmation of the company’s near- term EBITDA guidance ranges, with the potential for modest downside risk to EPS consensus.”
Canadian auto parts maker Magna International (MG-T) fell 4.7 per cent after it said on Friday that challenges, including government policies, have made forecasting “more difficult” as the Canadian auto parts maker cut its 2026 sales estimate and offered a weak revenue forecast for this year.
The industry is bracing for potential disruptions from U.S. tariffs on Canadian and Mexican imports, including steel and aluminum. While the duties were paused temporarily for a month on February 3, their long-term impact remains uncertain.
“It’s going to be disruptive and big,” Magna CEO Seetarama Kotagiri told Reuters. “To quantify that would require a crystal ball.”
He added that Magna is engaging with policymakers to provide data on potential impacts.
For 2025, CFRA analyst Garrett Nelson maintained a “hold” rating on Magna, and added that the company might face headwinds if tariffs are implemented and maintained for an extended period.
Earlier this week, Ford CEO Jim Farley warned of “a lot of cost, a lot of chaos” from the measures.
Magna operates over 140 manufacturing facilities throughout Canada, Mexico and the U.S., according to its website. Its customers include several top automakers such as BMW, Mazda and Ferrari.
Aurora, Ont.-based Magna expects its 2026 revenue to be between US$40.5-billion and US$42.6-billion, compared with a forecast of US$48.8-billion to US$51.2-billion it offered around the same time last year.
Magna’s forecasts do not incorporate any potential impact from the imposition of tariffs or changes in tariff rates.
Fellow Canadian company Bombardier recently delayed offering a 2025 forecast, citing tariff-related uncertainty.
Magna expects current-year sales between US$38.6-billion and US$40.2-billion, compared with the analysts’ average expectation of US$42.41-billion, according to data compiled by LSEG.
Its fourth-quarter sales rose 2 per cent to US$10.63-billion, beating expectations of US$10.30-billion. Adjusted earnings per share of US$1.69 were above the estimate of US$1.53.
Enbridge (ENB-T) slipped 5.5 per cent after it saw higher tolls on its pipelines and a doubling of income from its utilities segment, helping the company report a rise in its adjusted core profit for the fourth quarter on Friday.
Enbridge acquired three utilities from U.S.-based Dominion Energy last year, expanding its gas distribution business. This led to core profit doubling to $1.02-billion for the segment.
Enbridge’s Mainline system moves 40 per cent of crude in the United States and is North America’s largest crude oil pipeline network. It transports liquids and refined products from Edmonton, Alberta to various markets in Canada and the U.S. Midwest.
Adjusted core profit from the Mainline system rose 3 per cent to $1.34-billion, as the company saw a 6-per-cent increase in its toll pricing for crude moving from Alberta to Illinois, offsetting a drop in volumes.
The company’s natural gas transmission segment also saw a 17-per-cent rise in core profit, partly due to favorable contracting and lower operating costs on its U.S. assets.
Enbridge posted an adjusted core profit of $5.13-billion for the quarter ended December 31, up from $4.1-billion a year earlier.
The company also doesn’t see its financial guidance being materially impacted by impending tariffs from the U.S., CEO Greg Ebel said in the statement.
President Donald Trump’s proposed tariffs include a 10-per-cent tariff on energy imports from Canada, which brings about an uncertain environment for the country’s energy sector.
Enbridge has in its backlog $26-billion worth of projects from $27-billion in the previous quarter, after having put into service $5-billion of them in 2024.
The company posted an adjusted profit of 75 cents, in line with analysts’ average estimates, according to data compiled by LSEG.
However, net earnings fell by $1.2-billion, due to changes in the value of derivatives held by the company.
RBC analyst Maurice Choy said: “With Q4/24 results that were largely in line with our estimates and consensus on per share metrics (amid a solid EBITDA performance), the reaffirmation of the company’s 2025 and near-term guidance ranges (with management adding that the impacts from proposed tariffs on U.S. energy imports are not expected to be material to its financial guidance), and Enbridge’s continued delivery of its $26 billion secured growth program on an equity-self-funded basis (likely more to come on its growth outlook at Enbridge Day on March 4), we expect the announcements to have a neutral impact on the company’s share price.”
Agnico Eagle Mines Ltd. (AEM-T) declined 5.1 per cent despite reporting in-line fourth-quarter results that included an earnings beat driven by lower corporate expenses.
The Toronto-based gold producer posted revenue of $2.2-billion, up 26.6 per cent year-over-year and near the consensus forecast of $2.23-bilion. Adjusted earnings per share of $1.26 was up from 57 cents during the same period in fiscal 2023 and 8 cents higher than the Street’s forecast.
“Production is expected to be in the 3.3-3.5 Mozpa range over the next three years representing a slight decrease to previous 2025/26 guidance of 3.4-3.6Moz (RJL estimates of ~3.5Moz in each year) but higher than our 2027 forecast of 3.1Moz,” said Raymond James analyst Farooq Hamed. “Lower production from Canadian Malartic, Macassa and Pinos Altos were the main drivers of the lower guidance for 2025/26 while better expected production from LaRonde, Meadowbank and Canadian Malartic in 2027 explain the positive variance from our previous forecast. 2025 cash cost and AISC [all-in sustaining costs] guidance of $915-965/oz and $1,250-1,300/oz were in-line with our expectations of $948/oz and $1,269/oz respectively and represent 4 per cent and 3 per cent higher costs year-over-year.”
MTY Food Group (MTY-T) dropped after it reported a 2-per-cent rise in sales for its fourth quarter compared to the same period last year, while also reporting a loss for the period ended Nov. 30, driven mostly by weak performance at one of its pizza companies.
The company behind restaurant brands such as Jugo Juice, Thai Express and Timothy’s, said revenue came in at $284.5-million up from $280-million a year earlier. The expectation was for revenue of $269.5-million, according to Refinitiv Eikon data. The company said same-store sales were flat year over year.
In a release before markets opened on Friday, MTY reported a loss of $55.3-million or $2.34 per share compared to a profit of $16.4-million or 67 cents per share for the same period in 2023. The expectation was for a profit of 46 cents per share.
MTY said the year-over-year decrease was due mainly to $64.6-million in impairment charges on property, plant and equipment, intangibles assets and goodwill mostly related to its Papa Murphy’s brand “due to lower than expected past performance and lower expected future growth.”
It also said there were foreign exchange losses of $26.3-million taken primarily on intercompany loans.
Adjusted EBITDA was $58.8-million, which was in line with expectations and down from $60.4-million a year ago.
- Brenda Bouw
Crypto exchange Coinbase (COIN-Q) was down 8 per cent despite beating estimates for fourth-quarter profit on Thursday, driven by higher trading volumes in bitcoin and other digital tokens following the U.S. election.
Unprecedented interest in crypto, fueled by Donald Trump’s victory in the November presidential election, pushed bitcoin beyond US$100,000 in the quarter as investors anticipated more crypto friendly policies under the new administration.
Mr. Trump has promised to the make the U.S. the “crypto capital of the planet.” Paul Atkins, his pick to lead the Securities and Exchange Commission, is known for his pro-crypto views - a sharp contrast to former Chair Gary Gensler, who likened the industry to the “Wild West”.
Coinbase earned US$4.68 per share for the three months ended December 31, while analysts were expecting a profit of US$1.81 per share, according to data compiled by LSEG.
The profit included US$476-million in pre-tax gains on crypto asset investment portfolio.
Its transaction revenue rose 172 per cent to US$1.6-billion. Revenue from subscription and services unit, which houses businesses outside of trading, rose 15 per cent to US$641-million.
Total revenue rose to US$2.3-billion from US$953.8-million a year earlier.
With files from staff and wires