Prof. Fournier Press Review: July 26 – July 30
By: Pierre Fournier
Agenda: Lumber Price and fires in Western Canada, Air Canada, Magna International, American Express, Philips, Tesla, Boeing, CGI, Chevron, Market Review.
Significant increase in the price of lumber due to forest fires in Western Canada. According to Radio-Canada, forest fires in Western Canada are negatively influencing the Lumber industry. Indeed, since lumber companies are reducing their activities due to the outrage of forest fires, there has been a surge in lumber prices. Just last week, 1,000 board feet of lumber was priced at a hefty US$647, an increase of 9% compared to the day before markets closed. Read more here.
Second-quarter loss for Air Canada. For the second quarter of 2021, the COVID-19 crisis remains a threat to Air Canada's financial performance. Indeed, the airline has reported a loss of $ 1.165 billion for this quarter. However, it is important to note that the company is making steady progress towards making positive earnings. According to Global News, Air Canada has a positive outlook for its future as rising vaccination rates, and the recent easing of travel restrictions in Canada are positive factors for the airline industry.
Acquisition for Magna International. According to the Toronto Star, Ontario, auto parts maker Magna International has announced the acquisition of Swiss-born Veoneer. The objective of this transaction is to help Magna become a world leader in advanced driver assistance technologies. The amount of this transaction is valued at $ 3.8 billion.
Increasing revenues for American Express. Following five quarters on the decline, American Express' revenue is finally back on the rise. According to CNBC, this increase is mainly due to the resumption of consumer purchases. It is important to note that at the beginning of the COVID-19 crisis, American Express experienced a significant reduction in revenues as consumers reduced their spending on eating at restaurants, travelling, and shopping. In addition, several American Express credit card holders took the opportunity to pay off their debts which lowered the interest that American Express could earn, which as a result, decreased American Express' revenue further. Read more here.
Quarterly results for Philips. Philips of the Netherlands announced a decrease in profit in the second quarter of 2021. According to Reuters, there has been a global recall of defective breathing apparatuses earlier this year. Nevertheless, Philips is confident for the rest of the year 2021, although the company is aware of several uncertainties, particularly the shortage of electronic components. Read more here.
For the first time, Tesla celebrates its billion-dollar target. Having reached a record number of vehicle deliveries for the second quarter, Tesla earned a massive sum of $ 1 billion over the last three months, reports BNNBloomberg. However, Tesla mentioned that the shortage of power chips is still a threat in the short and medium term, which might delay the delivery of Tesla cars. Read more from CNBC.
Boeing: first quarterly profit since 2019. According to CNBC, aircraft maker Boeing appears to be recovering from problems associated with its flagship 737 MAX and the pandemic. After six consecutive quarters of losses, Boeing's earnings are finally on the increase. The group enjoyed a profit of 587 million dollars from April to June, while for the same period last year, the company had recorded a loss of 2.4 billion dollars. Boeing's revenues were mainly driven by the resumption of deliveries of the 737 MAX, which was grounded for twenty months following two fatal accidents.
An excellent quarter for CGI. According to BnnBloomberg, for the third quarter of 2021, the Montreal group CGI has declared an increase in its profits. Compared to the year 2020, the company recorded a 29% increase in profit. The company says that with strong cash flows and new contracts signed, CGI remains well-positioned to experience profitable growth in the coming years. CGI is a global information technology consulting, systems integration, outsourcing, and solutions company headquartered in Montreal, Quebec. Read more from the Toronto Star.
Chevron results confirm recovery in the oil and gas sector. As their oil and gas production activities benefited significantly from the rebound in economic activity, US company Chevron exceeded analysts' expectations for the second quarter. According to Yahoo Finance, it has lost more than 8 billion dollars during the period April to June 2020; meanwhile, for these same months in 2021, they recorded a profit of 3.1 billion dollars. In addition, Chevron has announced excellent news to reward its shareholders since they have decided to repurchase shares.
Down for the last trading day. According to CNBC, for the last day of trading in July, the New York Stock Exchange closed the week in negative territory. Several concerns for this sudden catastrophe have been associated with the spread of the Delta variant. The Toronto Stock Exchange also ended the day lower than usual. However, it is important to mention that the New York and Toronto stock exchanges recorded a gain for the month of July.