Aphria managed to swing to an adjusted profit in its latest quarter. Once you get past that headline result, there’s plenty of evidence of the challenges facing the cannabis industry in today’s release and, indeed, investors are sending the stock lower in pre-market trading. The big Leamington, Ont.-based pot producer lost pricing power in the recreational market as the average price per gram slumped to $5.22 from $6.02 in the fiscal second quarter. Aphria also cut its full-year revenue and profit forecasts while pointing to the usual culprit (Ontario’s slow retail rollout) as well as a host of other issues, including Alberta’s temporary ban on vape products. We’ll explore all of this and more with now-permanent Aphria CEO Irwin Simon at 11:05 a.m. ET, who also touted his company’s “cash position and balance sheet” in today’s release, which could easily be interpreted as a dig at some of his rivals who’ve been in the spotlight recently.
ENCANA GETS GO-AHEAD TO MOVE AND CHANGE ITS NAME
Shareholders have voted overwhelmingly in favour of Encana’s plan to re-domicile in the United States and change its name to Ovintiv. Beyond the general head-scratching about the rebranding and dismay about shedding the company’s Canadian identity, Encana’s claim that a U.S. home will allow it to expand its investor base had run into some vocal opposition, most notably Letko Brosseau, which argued the net impact will be negative as Canadian index funds sell and institutional shareholders potentially back away from the stock.
BLACKROCK CEO PUTS CEOs ON NOTICE
Larry Fink was blunt in his latest open letter to chief executive officers: climate change is forcing a “fundamental reshaping of finance” that will compel BlackRock to put sustainability at the forefront of its investment decisions. Not only that, Fink says his US$7-trillion behemoth “will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them.” Read all about it here. One question to keep in mind: how will indexing factor into BlackRock’s approach?
U.S. BANK EARNINGS SEASON
A major rebound in JPMorgan’s trading unit (+56 per cent) helped lift the bank to a record fourth-quarter profit and set an optimistic tone for the start of bank earnings season south of the border. In a release, JPMorgan CEO Jamie Dimon touted U.S. consumers as being in a “strong position” and said the ”resolution of some trade issues” has helped lift sentiment. It’s been a mixed bag from its peers: Wells Fargo shares are slipping in pre-market trading after falling short of profit expectations; Citigroup, meantime, is moving higher after outpacing estimates.
An Iranian judiciary spokesperson today announced arrests tied to the Flight 752 crash. That’s about all we know right now. The names of those arrested haven’t been disclosed, nor has the number of people detained. We’ll watch for details on those fronts. President Hassan Rouhani acknowledged in an address that “the entire world will be watching” how the case unfolds, and vowed to “use everything at [the government’s] disposal” in the investigation.
OTHER NOTABLE STORIES
-HBC has hired Iain Nairn as president of its flagship Bay banner. His resume includes stints at kikki.K, David Jones, Country Road Group and Witchery Group (I will admit to not being familiar with any of those). We’ll assess what it’ll take to breathe new life into The Bay.
-We will keep our eye on shares on WSP Global and Aecom today after Bloomberg reported the former has approached the latter about a potential deal.
-We’ll also watch shares of Endeavour Mining and Centamin today after Endeavour gave up on merger negotiations, citing “insufficient” information provided for due diligence.
-China has shed the currency manipulator label previously affixed by the U.S. Treasury Department. In a release yesterday afternoon (just two days before the Phase One trade deal signing ceremony in Washington), Treasury Secretary Steven Mnuchin said “China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability.”
-Tilray filled out its management team today with the appointment of Revlon veteran Jon Levin as chief operating officer. The pot producer has also hired former Molson Coors official Michael Kruteck as CFO.
-Visa announced a US$5.3-billion bet on fintech yesterday afternoon, with the acquisition of Plaid – which connects consumers’ banking information with apps.
-Finally, should note that today is David Klein’s first day on the job as chief executive of Canopy Growth.
-Notable data: U.S. CPI, China trade balance
-Notable earnings: Cogeco, Aphria, Organigram, JPMorgan Chase & Co., Citigroup, Wells Fargo, Delta Air Lines
-10:00 a.m. ET: Encana holds a shareholder vote in Calgary on its plan to move the company’s corporate domicile to the U.S.
-1:30 p.m. ET: Federal government special representative for the Prairies Jim Carr holds fireside chat at Calgary Chamber of Commerce
Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnnbloomberg.ca/subscribe.