Shopify Inc. reported a fourth-quarter profit of US$657 million compared with a loss of US$623 million a year earlier as its revenue rose 24 per cent.
The e-commerce technology firm, which keeps its books in U.S. dollars, says the profit amounted to 51 cents US per diluted share for the quarter ended Dec. 31, up from a loss of 49 cents US per diluted share in the last three months of 2022.
On adjusted basis, Shopify says it earned 34 cents US per diluted share, up from adjusted profit of seven cents US per share.
Revenue totalled US$2.14 billion, up from US$1.74 billion a year earlier.
The increase in revenue came as Shopify’s merchant solutions revenue rose to US$1.62 billion compared with US$1.34 billion a year earlier, boosted by an increase in driven primarily increased sales by its merchants. Subscription solutions revenue was US$525 million, up from US$400 million.
In its outlook for the first quarter of 2024, Shopify says it expects overall revenue to grow at a low-twenties percentage rate on a year-over-year basis.
This report by The Canadian Press was first published Feb. 13, 2024.
Restaurant Brands International Inc. reported its fourth-quarter net income more than doubled compared with a year ago.
The parent company of Tim Hortons, Burger King and other brands, which keeps its books in U.S. dollars, says its net income totalled US$726 million or $1.60 per diluted share.
The result was up from US$336 million or 74 cents US per diluted share for the last three months of 2022.
The company says the increase was driven by a larger income tax benefit and increased income from operations, partially offset by higher interest costs.
On an adjusted basis, Restaurant Brands says it earned 75 cents US per diluted share in its most recent quarter, up from 72 cents US per diluted share a year earlier.
Revenue totalled US$1.82 billion, up from US$1.69 billion in the same quarter a year earlier.
This report by The Canadian Press was first published Feb. 13, 2024.
Intact Financial Corp. says it earned $531 million in the fourth quarter of 2023, a 50 per cent increase from earnings of $353 million during the same quarter a year earlier.
The Toronto-based company says earnings of $1.3 billion for 2023 as a whole, however, were down 46 per cent compared with a year earlier amid numerous natural disasters.
Earnings per share were $2.78 for the fourth quarter, up from $1.88.
Intact says its board approved a quarterly dividend on outstanding common shares of $1.21 per share, an 11-cent increase.
The company says over the next twelve months, it expects hard insurance market conditions to continue, driven by inflation and losses from catastrophes.
In January, the company estimated total catastrophe losses for the fourth quarter were $200 million on a pre-tax basis.
This report by The Canadian Press was first published Feb. 13, 2024.
Gold prices fell sharply on Tuesday as the dollar climbed higher after data showing bigger than expected increase in U.S. consumer prices in the month of January dashed hopes of an early rate cut by the Federal Reserve.
CME Group’s FedWatch Tool is currently indicating just an 8.5% chance of a quarter point rate cut in March, while the chances of a quarter point rate cut in early May have fallen to 35.3%.
The dollar, which remained subdued ahead of the inflation data, climbed higher soon after the release of the report from the Labor Department. The dollar index surged to 104.88, gaining nearly 0.7%.
Gold futures for April ended down $25.80 at $2,007.20 an ounce.
Silver futures for March ended lower by $0.613 at $22.154 an ounce, while Copper futures for March settled at $3.7110 per pound, losing $0.0130.
“Gold has crumbled under the pressure of rates staying higher. How much worse it gets for the yellow metal will ultimately depend on how bad the data gets but, under the circumstances, we’re certainly back in a “good news is bad news” scenario ahead of the retail sales data,” says Craig Erlam, Senior Market Analyst at OANDA, UK & EMEA. “The fairytale scenario of a strong economy, low inflation, and rate cuts now looks a step too far.”
The Labor Department said its consumer price index rose by 0.3% in January after inching up by 0.2% in December. Economists had expected consumer prices to edge up by 0.2%.
While the report also showed the annual rate of consumer price growth slowed to 3.1% in January from 3.4% in December, economists had expected the pace of growth to slow to 2.9%.
Excluding food and energy prices, core consumer prices climbed by 0.4% in January after rising by 0.3% in December. Core prices were expected to increase by 0.3%.
With Federal Reserve officials repeatedly saying they need more “confidence” inflation is slowing before lowering interest rates, the data has further reduced optimism about a near-term rate cut.
Oil prices climbed higher on Tuesday amid concerns about supply due to the ongoing tensions in the Middle East, where Houthi militants continue to attack commercial vessels in the Red Sea.
A drop in Russian crude oil exports also contributed to the increase in oil prices.
Meanwhile, the United States rejected Russian President Vladimir Putin’s suggestion of a ceasefire in Ukraine, Reuters says in a report, citing some sources.
Data showing consumer price inflation in the U.S. rose by more than expected in the month of January has dashed hopes of an early rate cut by the Federal Reserve and lifted the dollar higher. The dollar’s rise capped oil’s advance.
West Texas Intermediate Crude oil futures for March ended higher by $0.95 or about 1.25% at $77.87 a barrel, rising for a seventh straight session.
Brent crude futures settled at $82.77 a barrel, gaining $0.77 or about 0.94%.
The monthly report from OPEC reveals dispersion and non-compliance yet again among OPEC members on the supply cuts that were agreed upon at the end of 2023. Iraq is said to be the biggest group member that is non-compliant.
In U.S. economic news, the Labor Department said its consumer price index rose by 0.3% in January after inching up by 0.2% in December. Economists had expected consumer prices to edge up by 0.2%.
While the report also showed the annual rate of consumer price growth slowed to 3.1% in January from 3.4% in December, economists had expected the pace of growth to slow to 2.9%.
Excluding food and energy prices, core consumer prices climbed by 0.4% in January after rising by 0.3% in December. Core prices were expected to increase by 0.3%.
With Federal Reserve officials repeatedly saying they need more “confidence” inflation is slowing before lowering interest rates, the data has further reduced optimism about a near-term rate cut.
Investors now await weekly oil reports from the American Petroleum Institute (API), due later today, and the Energy Information Administration (EIA), due Wednesday morning.
The Canadian market suffered one of its worst setbacks in recent months as stocks tumbled on sustained selling pressure on Tuesday after data showing a bigger than expected increase in U.S. consumer price inflation reduced the possibility of a rate cut by the Federal Reserve anytime soon.
Mirroring widespread selling, all the sectoral indices ended in the red. Technology, materials, consumer discretionary, utilities, financials and energy stocks were among the major losers.
The benchmark S&P/TSX Composite Index, which plunged to 20,466.50, ended with a loss of 482.33 points or 2.29% at 20,584.97.
The Information Technology Capped Index dropped 4.59%. The Materials Index tumbled 3.35%, while the Consumer Discretionary Index and the Utilities Index both ended down 2.37% and 2.3%, respectively.
The Healthcare, Communication Services, Energy, Financials and Real Estate indexes shed 1.5 to 2.1%, respectively.
SSR Mining Inc. (SSRM.TO) tanked 53.5%, weighed down by the company’s announcement that it is suspending operations at its Çöpler mine.
Shopify Inc (SHOP.TO) shares plunged 12.5% after the company forecast its Q1 revenue growth rate below estimates.
BRP Inc (DOO.TO), Precision Drilling Corporation (PD.TO), Restaurant Brands International (QSR.TO), Cargojet (CJT.TO) and goeasy (GSY.TO) lost 3.2 to 4.5%.
The Canadian market suffered one of its worst setbacks in recent months as stocks tumbled on sustained selling pressure on Tuesday after data showing a bigger than expected increase in U.S. consumer price inflation reduced the possibility of a rate cut by the Federal Reserve anytime soon.
Mirroring widespread selling, all the sectoral indices ended in the red. Technology, materials, consumer discretionary, utilities, financials and energy stocks were among the major losers.
The benchmark S&P/TSX Composite Index, which plunged to 20,466.50, ended with a loss of 482.33 points or 2.29% at 20,584.97.
The Information Technology Capped Index dropped 4.59%. The Materials Index tumbled 3.35%, while the Consumer Discretionary Index and the Utilities Index both ended down 2.37% and 2.3%, respectively.
The Healthcare, Communication Services, Energy, Financials and Real Estate indexes shed 1.5 to 2.1%, respectively.
SSR Mining Inc. (SSRM.TO) tanked 53.5%, weighed down by the company’s announcement that it is suspending operations at its Çöpler mine.
Shopify Inc (SHOP.TO) shares plunged 12.5% after the company forecast its Q1 revenue growth rate below estimates.
BRP Inc (DOO.TO), Precision Drilling Corporation (PD.TO), Restaurant Brands International (QSR.TO), Cargojet (CJT.TO) and goeasy (GSY.TO) lost 3.2 to 4.5%.
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Bank of Montreal (BMO.TO), Royal Bank of Canada (RY.TO), WSP Global Inc (WSP.TO), George Weston (WN.TO) and Constellation Software (CSU.TO) ended down 1.6 to 2.5%.
Among the stocks that bucked the weak trend, Softchoice Corporation (SFTC.TO) climbed 5.6% and Waste Connections (WCN.TO) surged 2.3%.
The Labor Department said its consumer price index rose by 0.3% in January after inching up by 0.2% in December. Economists had expected consumer prices to edge up by 0.2%.
While the report also showed the annual rate of consumer price growth slowed to 3.1% in January from 3.4% in December, economists had expected the pace of growth to slow to 2.9%.
Excluding food and energy prices, core consumer prices climbed by 0.4% in January after rising by 0.3% in December. Core prices were expected to increase by 0.3%.
With Federal Reserve officials repeatedly saying they need more “confidence” inflation is slowing before lowering interest rates, the data has further reduced optimism about a near-term rate cut.
Canada’s Shopify SHOP-T -10.46%decrease topped Wall Street estimates for fourth-quarter revenue and profit on Tuesday, riding on demand for its ecommerce services from merchants during the holiday shopping season.
However, the company’s shares were down more than 6 per cent in Toronto shortly after the opening bell.
“Shopify reported a strong quarter and exceeded revenue growth expectations. While guidance for the first quarter was also healthy, it may not be enough given high investor expectations,” said Gil Luria, analyst at D.A. Davidson.
Total revenue rose 24% to $2.14 billion for the three months to December, higher than analysts’ average estimate of $2.08 billion, according to LSEG data.
On an adjusted basis, Shopify earned 34 cents per share, beating expectations of 31 cents.
Shopify, which offers tools and services for businesses to set up their online stores, has launched new tools and offerings along with artificial intelligence products to stay ahead in a competitive e-commerce space.
Merchants on the platform reached a record of $9.3 billion in sales over the Black Friday-Cyber Monday weekend, the company had said in November, a 24% increase from a year earlier.
The company expects first-quarter revenue to grow at a low-20s percentage rate, while analysts were expecting a 20% rise.
U.S. consumer prices rose more than expected in January amid a surge in the cost of shelter, but the pickup in inflation did not change expectations that the Federal Reserve will start cutting interest rates in the first half of this year.
The largest increase in prices in four months reported by the Labor Department on Tuesday came against the backdrop of labour market strength and economic resilience. Some economists also blamed difficulties adjusting the data for seasonal fluctuations for the stronger-than-expected inflation readings.
“Today’s data is not what markets or the Fed would have liked to see, but it’s important not to over react and jump to the assumption that an inflationary resurgence is developing,” said Seema Shah, chief global strategist at Principal Asset Management. “A March cut is completely off the agenda, but May could still be in play if economic activity plays ball and finally starts to show the impact from prior Fed tightening.”
The consumer price index (CPI) increased 0.3 per cent last month after gaining 0.2 per cent in December, the Labor Department’s Bureau of Labor Statistics said. Shelter, which includes rents, accounted for more than two-thirds of the rise in the CPI.
New weights, published last week, which saw the housing share rising and that of new and used cars lowered, were used to calculate the January consumer price data.
Companies also push through price increases at the start of the year, which was evident in strong rises in the costs of medical care services and tobacco products.
Food prices rose 0.4 per cent. Grocery food inflation also increased 0.4 per cent, boosted by more expensive sugar and sweets as well as fats and oils. Prices for non-alcoholic beverages shot up 1.2 per cent, while the cost of fruits and vegetables rose 0.4 per cent. But cereals and bakery products were cheaper. Prices for meat, eggs and fish were unchanged. Gasoline prices dropped 3.3 per cent.
In the 12 months through January, the CPI increased 3.1 per cent after advancing 3.4 per cent in December. Economists polled by Reuters had forecast the CPI gaining 0.2 per cent on the month and rising 2.9 per cent year-on-year. The annual increase in consumer prices has moderated from a peak of 9.1 per cent in June 2022.
Annual revisions to the CPI data published last Friday were mixed, but generally showed inflation was on a downward trend after surging in 2022. The BLS updated the seasonal factors, the model it uses to strip out seasonal fluctuations from the data.
Financial markets pushed back their interest rate cut expectations to June from in May on the CPI report. U.S. stocks opened lower. The dollar rose against a basket of currencies. U.S. Treasury prices fell.
Policy-makers have said they are in no hurry to start lowering borrowing costs and want convincing evidence that inflation is on a sustained slow path. Since March 2022, the U.S. central bank has raised its policy rate by 525 basis points to the current 5.25 per cent to 5.50 per cent range.
Excluding the volatile food and energy components, the CPI rose 0.4 per cent last month after increasing 0.3 per cent in December. The so-called core CPI was lifted by a 0.6 per cent surge in shelter after gaining 0.4 per cent in December.
Owners’ equivalent rent (OER), a measure of the amount homeowners would pay to rent or would earn from renting their property, jumped 0.6 per cent after rising 0.4 per cent in the prior month.
Rental inflation has remained elevated despite anecdotal evidence suggesting that rent asking prices were going down. Rent measures in the CPI tend to lag the independent gauges by several months. There is also a large stock of apartment buildings in the pipeline, adding to economists’ expectations that rents will lead inflation lower this year.
While OER’s slightly bigger share in the CPI basket compared to 2023 likely pushed up inflation in January, it is expected to contribute to lower readings this year, if the BLS rent measures start to align with the private gauges, as expected.
There were also increases in the cost of lodging away from home. Motor vehicle insurance prices rose 1.4 per cent. The cost of recreation increased as did those of communication, personal care, airline fares and education. But used car and truck prices dropped 3.4 per cent. Apparel was cheaper and Americans also paid less for prescription medication.
The core CPI advanced 3.9 per cent year-on-year in January, matching December’s increase.
While significant progress has been made in lowering inflation, risks remain, including the potential for renewed supply chain problems due to Red Sea shipping disruptions and drought in the Panama Canal.
Though consumer prices remain elevated, measures tracked by the Fed’s for its 2 per cent inflation target have improved considerably. The increase in the personal consumption expenditures (PCE) price index slowed to an annualized rate of 1.7 per cent in the fourth quarter from a 2.6 per cent pace in the July-September quarter. The core PCE price index rose at a 2.0 per cent rate, unchanged from the third quarter.
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