Author: Consultant

China’s exports beat forecasts in April, buoyed by demand for materials from overseas manufacturers who rushed out goods to make the most of U.S. President Donald Trump’s 90-day tariff pause.

The world’s two largest economies have been locked in a bruising tit-for-tat tariff war and businesses on both sides of the Pacific will be looking for some kind of resolution at closely watched trade talks in Switzerland this weekend.

Customs data on Friday showed outbound shipments from China rose 8.1 per cent year-on-year in April, beating a forecast 1.9 per cent increase in a Reuters poll of economists but slowing from the 12.4 per cent jump in March.

Trump announced sweeping “reciprocal tariffs” of 10 per cent on April 2, before offering a pause for most countries while the White House worked on multiple trade deals. China, however, was excluded from the reprieve and singled out for levies of 145 per cent, kicking off a protracted cat-and-mouse game that has rattled global markets and upended supply chains.

Chinese manufacturers had also been front-loading outbound shipments in anticipation of the duties, but are now banking on icebreaker tariff talks between American and Chinese officials in Geneva on Saturday.

Imports fell 0.2 per cent, compared with expectations for a 5.9 per cent drop, suggesting domestic demand may be holding up better than expected as policy-makers continue to take steps to prop up the $19-trillion economy.

“The ASEAN countries are speeding up their production to meet the July deadline, the 90-day negotiation break. Their production is highly reliant on China’s exports in raw materials and industrial inputs, so China’s exports got support,” said Dan Wang, China director at Eurasia Group.

“Over the next two months, China’s exports could continue to be strong due to industrial capacity relocation, but the trade data could deteriorate quite quickly if the 145 per cent tariffs on China are still in place and ASEAN countries’ talks (with the Trump administration) don’t make progress,” she added.

Exports to Southeast Asian countries rose 20.8 per cent in April.

China’s exports to the U.S., meanwhile, fell 21 per cent. That meant the trade surplus with the U.S. dropped to $20.5-billion from $27.6-billion in March, a win for Trump, who has repeatedly said he wants to narrow the gap.

Beijing cannot afford a trade war with the U.S. but sees Trump’s tariffs as unwelcome interference, with officials wanting to implement the painful domestic reforms needed to shore up long-term growth at their own pace.

If not lowered or removed, the tariffs could deal a heavy blow to China’s economy, which has relied on exports to drive growth as it struggles to recover from the pandemic shocks and a protracted property market slump.

“The damage of the U.S. tariffs has not shown up in the trade data for April,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “I expect the trade data will weaken in the next few months gradually.”

“Hopefully, the trade negotiations between China and the U.S. can reach agreement soon and bring down tariffs to mitigate the shock to global trade,” he added.

Beijing has in the past few months reiterated its confidence that China could achieve the “around 5 per cent” growth target for the year, and rolled out measures to bolster consumption and support the country’s exporters.

A slew of monetary stimulus measures, including liquidity injections and cuts to policy rates, was announced on Wednesday in a bid to ease tariff hits on the economy.

For now, the trade sector’s momentum is still riding on the global scramble to make the most of Trump’s brief tariff relief.

China’s steel exports topped 10 million metric tons for a second straight month in April, as top customers like South Korea and Vietnam bought in bulk to outrun the tariffs, which analysts expect to disrupt China’s lucrative transhipment trade.

With global copper producers rushing stocks to the U.S. after Trump proposed slapping levies on the metal, China’s imports of unwrought copper and copper products remained unchanged last month.

Soybean imports plunged to a 10-year low in April, but this was due to prolonged customs clearance delays and late Brazilian shipments caused by harvest slowdowns and logistics issues.

FIRST-QUARTER HIGHLIGHTS

• Consolidated comparable sales were up 4.7% and consolidated retail sales¹ were up 5.1%. Increased trips drove sales growth across all banners, with particular strength in Ontario, Quebec and Eastern Canada.
  • Canadian Tire Retail (CTR) comparable sales¹ grew 4.7%, with growth across all CTR divisions except Fixing, led by strong growth in seasonal weather-related categories. Auto maintenance, outdoor tools, and auto parts were the top-performing lines of business in the quarter.
  • SportChek delivered a third consecutive quarter of comparable sales¹ growth, up 6.3%, driven by strong sales across both corporate and franchise stores. Skiing and snowboards, hockey, and outerwear were the top performing categories in the quarter.
  • Mark’s comparable sales¹ were up 2.2%, driven by industrial wear. New store openings continued to be the most significant contributor to retail sales growth and advances in in-store Net Promoter Score (NPS).
• Backed by the strength of the Canadian Tire brand and Triangle member engagement, loyalty sales growth outperformed retail sales. Loyalty penetration¹ was up 132 bps, reaching 54.5% of retail sales on a direct scan, rolling 12-month basis.
• Consolidated income before income taxes (IBT) was down $51.3 million to $51.6 million and Diluted EPS was $0.67, including the results for Helly Hansen business (now included in discontinued operations) and expenses related to the implementation of the Company’s True North strategy.
• Normalized for the True North expenses, IBT¹ on a continuing operations basis was up $62.8 million to $165.7 million, which resulted in Normalized Diluted EPS (continuing operations) of $2.00, up $0.92 from last year. Improved IBT was mainly due to an increase in retail segment profitability.
  • Normalized Retail IBT¹ on a continuing operations basis was $50.9 million, up $69.2 million, due to higher gross margin and lower interest expense.
  • Financial Services IBT was $97.0 million, up $1.3 million, as higher revenue offset expected increases in net impairment losses, as well as higher funding costs.

https://www.newswire.ca/news-releases/canadian-tire-corporation-reports-strong-first-quarter-2025-results-865507253.html

Highlights
(All financial figures are unaudited and in Canadian dollars unless otherwise noted. * identifies non-GAAP financial measures. Please refer to Non-GAAP Reconciliations Appendices.)

• First quarter GAAP earnings of $2.3 billion or $1.04 per common share, compared with GAAP earnings of $1.4 billion or $0.67 per common share in 2024
• Adjusted earnings* of $2.2 billion or $1.03 per common share*, compared with $2.0 billion or $0.92 per common share in 2024
• Adjusted earnings before interest, income taxes and depreciation and amortization (EBITDA)* of $5.8 billion, an increase of 18%, compared with $5.0 billion in 2024
• Cash provided by operating activities of $3.1 billion, compared with $3.2 billion in 2024
• Distributable cash flow (DCF)* of $3.8 billion, an increase of 9%, compared with $3.5 billion in 2024
• Reaffirmed 2025 full year financial guidance and multi-year financial outlook
• Sanctioned up to $2.0 billion of Mainline capital investment through 2028 to further reliability and maximize existing throughput given continuing demands on the system
• Launched a binding open season on Flanagan South Pipeline (FSP) supporting Mainline Optimization Phase 1 which adds 150 kbpd of capacity
• Announced definitive agreement to acquire a 10% equity interest in the operating Matterhorn Express Pipeline (MXP), a 2.5 bcf/d natural gas pipeline connecting growing Permian supply to Katy, Texas, for US$0.3 billion of cash consideration
• Sanctioned construction of the Traverse Pipeline alongside Whitewater Midstream (Whitewater), MPLX LP (MPLX), and Targa Resources (Targa) to provide natural gas transportation service between Katy and Agua Dulce in the U.S. Gulf Coast
• Sanctioned the $0.4 billion Birch Grove expansion of T-North Pipeline in British Columbia to serve growing egress needs out of the Montney basin
• Sanctioned a US$0.1 billion expansion of the T15 project at Enbridge Gas North Carolina, doubling capacity of the original natural gas generation related project

https://www.newswire.ca/news-releases/enbridge-reports-record-quarterly-results-and-reaffirms-2025-financial-guidance-illustrating-its-industry-leading-resilient-business-model-838461499.html

Canadian Natural Resources CNQ-T +5.99%increase reported a first-quarter profit on Thursday that beat analysts’ estimates, helped by higher oil and natural gas production, sending the company’s U.S.-listed shares up more than 2 per cent in premarket trading.

Oil producers in Canada are benefiting from the start up of the Trans Mountain pipeline expansion project, which has nearly tripled the flow of oil to the country’s Pacific Coast from landlocked Alberta, raised the price of Canadian crude and opened up market access to refineries in Asia and the U.S. West Coast.

Canadian Natural Resources’ quarterly output also got a boost from the recently acquired Athabasca oil sands and Duvernay shale formation assets, which the company bought from Chevron for US$6.5-billion.

Canadian Natural Resources, the country’s largest oil and gas producer, said its total output rose to 1.58 million barrels of oil equivalent per day (mboepd) during the first quarter from 1.33 mboepd.

The company produced 1.17 million barrels per day (bpd) of liquids and 2.45 billion cubic feet (bcf) per day of natural gas during the quarter.

Total realized price for exploration and production liquids rose 14 per cent to $79.85 per barrel, while realized prices for natural gas output climbed nearly 23 per cent to $3.13 per thousand cubic feet.

Canadian Natural Resources said it would lower its annual capital budget by $100-million to $6.05-billion, adding that it would have no impact on the company’s planned operating activities or targeted production levels for 2025.

The company aims to produce between 1.51 million and 1.55 million barrels of oil equivalent per day (boepd) in 2025, the upper limit of which is in line with analysts’ expectations, according to data compiled by LSEG.

On an adjusted basis, Canadian Natural Resources earned $1.16 per share in the quarter, compared with analysts’ average expectation of $1.05.

Shopify SHOP-T -1.33%decrease reported double-digit revenue growth for its first fiscal quarter, but the stock slumped during morning trading as the company’s outlook fell short ofanalysts’ expectations.

Harley Finkelstein, president of the Ottawa e-commerce giant, said in an earnings call Thursday that tariffs have had little effect on the company so far. He cited the diversity of the company’s merchant base and consumers as one reason for Shopify’s strong quarter amid market volatility. The fact that more than half of U.S. customers buying from Shopify merchants have incomes exceeding US$100,000 also helps, he said.

“We believe this helps insulate our merchants from some of the potential swings in pricing or other market factors,” he said on the call.

Why Shopify could be a buy even in the middle of a trade war

Shopify, which charges merchants subscription and transaction fees to use its platform, generated US$2.4-billion in revenue in the first quarter ended March 31, beating analysts’ estimates of US$2.3-billion, according to S&P Capital IQ. That was up 27 per cent from US$1.9-billion in the same quarter last year.

Shopify posted a net loss of US$682-million, with a large chunk of that attributable to its equity holdings in other companies. Excluding the impact of those investments, the company reported a net income of US$226-million, up 57 per cent.

Gross merchandise volume (GMV), the value of sales made over Shopify’s platform, was US$74.8-billion, up 23 per cent.

Shopify, which reports in U.S. dollars, forecast revenue growth around a mid-20s-percentage rate on a year-over-year basis for the next quarter. The company also expects its gross profit to rise by a percentage rate in the high teens and operating expenses to be between 39 and 40 per cent of revenue, similar to this quarter.

In a note to shareholders Thursday morning, RBC analysts Paul Treiber and Daniel Perlin expressed concern about Shopify’s forecast for the coming quarter, noting that the company’s outlook for gross profit and free cash flow is below analysts’ consensus expectations.

Former Rogers CEO Joe Natale nominated to Shopify board

Jeff Hoffmeister, Shopify’s chief financial officer, responded to questions about the discrepancies on the morning call. He cited the company’s payment partnership with PayPal, the percentage of revenue taken up by Shopify Payments and larger GMV merchants coming onto its platform as possible headwinds to its gross margins.

“Go back two years, there are a lot of good products we produced. They’re continuing to ramp. They’re ramping really well. Just given the size of the overall business, it takes a while for them to have a meaningful impact,” he said.

In recent quarters, Shopify, which operates in more than 170 countries with millions of customers worldwide, has been gaining momentum through its Plus subscriptions, targeted at large-enterprise customers.

The company’s revenue from subscriptions went up 21 per cent to US$620-million, and it made $US$1.7-billion from merchant fees, up 29 per cent. Free cash flow increased 56 per cent per cent.

While analysts are generally positive about Shopify’s long-term organic growth, many of them reduced their targets ahead of the company reporting its first quarter earnings. They cited headwinds including U.S. President Donald Trump’s lifting of the de minimis exemption on May 2 for goods imported into the U.S. from China. Previously, this exemption allowed goods valued at or below US$800 to enter the country duty-free.

Shopify offered Mark Carney a job as president in 2020, before he went to Brookfield

Days after Mr. Trump signed an executive order on April 2 to eliminate the de minimis exemption and amid tariff announcements, Shopify’s stocked dropped about 20 per cent alongside several other high-profile technology stocks.

Analysts expect the de minimis elimination to slightly affect the company’s GMV growth in future quarters by slowing shipments from drop shippers, which do not keep inventories but instead use Shopify’s platform to ship goods directly from foreign manufacturers to domestic consumers.

However, Mr. Hoffmeister dispelled anxiety about the recent de minimis expiration on Thursday’s earnings call, saying it wasn’t “expected to have a meaningful impact on Shopify in the near term.”

He added only 1 per cent of the company’s GMV is related to imports from China that were subject to the exemption. “We will continue to monitor its impact on our business.”

To adjust for tariffs, Mr. Finkelstein said Shopify has seen some merchants raise prices, but the increases aren’t part of a broader trend yet. Merchants are using a number of strategies, including reconsidering which countries to source goods from, when to buy inventory or which products to stock, he added.

Shopify recently introduced a number of tools to help those on its platform navigate tariffs, including local shopping features, tools to display and collect duties at checkout and international importing guides.

“We acknowledge the uncertainty ahead and are actively monitoring our data to help us support our merchants and adapt to whatever changes may arise,” Mr. Finkelstein said.

Restaurant Brands QSR-T -0.01%decrease missed first-quarter revenue and profit estimates on Thursday, hurt by sluggish demand at its restaurant chains such as Burger King and Tim Hortons amid tariff-related uncertainty.

The restaurant industry has been battling ongoing sales declines as budget-conscious Americans stick to home-cooked meals, prioritizing spending on essentials over dining out.

The U.S. economy shrank for the first time in three years in the first quarter, signaling consumers are expecting product prices to shoot up due to the escalating global trade tensions.

The Trump administration’s shifting tariff policies have forced businesses to raise prices in an effort to protect profit margins from rising input costs and supply chain disruptions.

Fast-food chain operators such as McDonald’s, Domino’s, Chipotle and Starbucks took a hit to sales and flagged weak consumer demand.

“We anticipated that Q1 would be our softest quarter of the year and believe that some of the macro noise may have driven further softness,” Restaurant Brands CEO Josh Kobza said on a post-earnings call.

Comparable sales at the company’s Tim Hortons segment, its biggest revenue generator, dipped 0.1 per cent in the quarter, while at Burger King it fell 1.3 per cent.

“Surprised by the Tim Hortons miss in the context of peers that cited strength in Canada including McDonald’s, Starbucks, Wendy’s & Yum!, while the brand was a theoretical beneficiary of the ‘Buy Canadian movement’,” Andrew Charles, analyst with TD Cowen Securities, said.

Rising prices of commodities such as coffee pushed up its supply chain costs, according to Restaurant Brands.

The company reported quarterly revenue of $2.11-billion, compared with analysts’ average expectation of $2.13-billion, according to data compiled by LSEG.

On an adjusted basis, Restaurant Brands earned 75 cents per share, missing estimates of 78 cents.

Telecom company BCE Inc. BCE-T +6.79%increase has cut its dividend by more than half, marking a long-anticipated departure from its extended history of steady payout growth.

BCE is reducing its annualized dividend to $1.75, or $0.4375 quarterly per common share, from a $3.99 annualized common share dividend. This represents a 56 per cent drop.

BCE has been distributing to shareholders more in dividends than it has been earning in free cash flow, while also balancing the weight of more than $30-billion in long-term debt.

“What we’ve heard from discussing this with shareholders and investors, the message is to focus in the near term on lowering debt,” said BCE president and chief executive officer Mirko Bibic in an interview Thursday morning.

“We wanted to give ourselves the flexibility to invest for growth, because our job in the short, medium and long term is to grow this franchise with the view of driving total shareholder returns,” he added.

In a call with investors, Mr. Bibic acknowledged competitive and inflationary pressures, heightened macroeconomic uncertainty, a slowdown in immigration and the higher cost of capital given the decline in BCE’s share price.

The company’s share price fell 35 per cent in the year leading up to the dividend cut, as investors balked at the company’s high payout ratio and acquisition spending.

Quebecor boosts cell phone market share with Freedom discounts

Until the dividend cut, the widely held shares were yielding 13.6 per cent, which was broadly seen as unsustainable for the company. This will now fall to about 6 per cent.

Mr. Bibic said the company expects to use the majority of the cash saved to pay down debt, with an initial goal of reaching a 3.5 net debt to EBITDA ratio by 2027.

“When we get there, we’ll have the flexibility to consider other ways to return capital to shareholders,” Mr. Bibic said.

The company also ended the discount on its dividend reinvestment plan.

In a note to investors Thursday morning, Scotiabank analyst Maher Yaghi said that management “should be able to regain investor confidence in the long term” now that it has indicated a clear line of sight towards material organic deleveraging in the years to come.

To further this goal, Mr. Bibic said Thursday that the company has launched two additional formal processes for divestitures. BCE’s executives said last quarter that they were assessing potential non-core assets to sell to pay down debt, including its telecom infrastructure.

Part of the company’s debt is related to the company’s proposed acquisition of U.S.-based Ziply Fibre, which would see BCE pay $5-billion for the company and hundreds of millions in capital expenditures building out Ziply’s network.

BCE also announced Thursday that it has struck a partnership on Ziply with PSP Investments that will see the Ottawa-based pension plan invest US$1.5-billion to expand the fiber network from 1.3 million to up to 8 million potential customers.

The deal will add improve the company’s free cash flow by $1-billion between 2026 and 2028, Mr. Bibic said.

PSP Investments, a public sector pension fund with $265-billion in assets, will own a 51-per-cent equity stake in the new Network FiberCo business, to build of fiber infrastructure outside of Ziply’s incumbent footprint.

BCE will continue to own 100 per cent of the existing Ziply business, which has a potential base of 1.3 million customers. The PSP investment is expected to grow Ziply’s network from 1.3 million to up to 8 million potential customers.

“We see this transaction as essentially reducing BCE’s exposure to the Ziply venture. Canadian telecom investors have been lukewarm to news of changes in infrastructure ownership structures recently, but de-risking the project could be well-received,” said Desjardins analyst Jerome Dubreuil.

The telecom is acquiring the fibre company for $5-billion, and previously said it expected to spend hundreds of millions expanding Ziply’s network in the northwestern U.S.

PSP Investments and BCE will share in the cost of expanding the network to a potential 8 million customers, with the pension plan agreeing to “a potential commitment in excess of US$1.5 billion” for the project.

Adding PSP as a majority owner in Ziply’s expanded platform dramatically lowers BCE’s future capital spending, resolving a major concern for investors.

PSP Investments first invested in Ziply in 2019, alongside four other institutional investors, then agreed to sell the company to BCE in November, 2024.

In its first quarter, the company has net losses of 596 mobile customers, versus analyst consensus of 7,700 adds. Internet net additions of 9,500 missed consensus of 23,600. Revenue was $5.9-billion, down one per cent from last year.

Canadian oil and gas producer Cenovus Energy CVE-T +9.88%increase on Thursday posted a fall in first-quarter profit but managed to beat Wall Street estimates on the back of higher output and improved refining margins.

The Calgary-based company’s U.S.-listed shares were up nearly 1.4 per cent in premarket trading following the results.

Energy producers in Canada have been benefiting from the completion of the Trans Mountain pipeline expansion project, which offers the only export route to international markets bypassing the U.S.

The pipeline has raised its capacity to 890,000 barrels per day.

Peer Imperial Oil last week posted its highest-ever first-quarter earnings , driven by stronger margins in its refining and fuel sales business.

Suncor Energy on Tuesday beat quarterly profit estimates on greater refinery production and sales volumes.

Cenovus’ total upstream production was 818,900 barrels of oil equivalent per day (boepd) in the first quarter, up from 800,900 boepd a year earlier.

Its total quarterly downstream throughput was 665,400 barrels (bbl) per day, compared with 655,200 bbl per day a year ago.

Refinery utilization in the Canadian Refining segment rose to 104 per cent from 94 per cent a year ago, while it rose to 90 per cent in the U.S. Refining segment from 87 per cent.

CEOs of Canadian oil and gas producers, including Cenovus’ Jon McKenzie, had said earlier in April they are seeking to avoid making abrupt decisions about spending or production, with oil prices hitting four-year lows and recession fears growing.

Cenovus’ first-quarter net income fell to $859-million from C$1.18-billion a year earlier, as crude prices declined on uncertainty surrounding the U.S. economy, tariff policies and fears of oversupply.

However, the company’s quarterly profit per share of 47 cents surpassed analysts’ average estimate of 37 cents per share, according to data compiled by LSEG.

Nutrien NTR-T +0.80%increase fell short of Wall Street expectations for first-quarter profit on Wednesday, as the top potash producer was impacted by delayed field activity due to wet weather conditions in North America.

The company’s quarterly sales for crop nutrients was down at US$1.19 billion compared with $1.31 billion from a year ago, while sales for crop protection products was down at $972 million compared with $1.11 billion from 2024.

The Saskatoon-based firm posted an adjusted profit of 11 cents US per share for the quarter ended March 31, compared with the analysts’ average estimate of 31 cents per share, according to data compiled by LSEG.