Down 50 per cent, Element Fleet Management Corp. was the worst-performing stock in the entire S&P/TSX Composite this year — at least, until Monday, when it said it appointed a new CEO and would re-stock its board with a fresh set of independent directors.
Can the company build on its 10 per cent gain Monday with its earnings Tuesday morning? Expectations are for, on average, 18 cents of earnings per share, a profit level that would represent a decline of more than 20 per cent from a year ago. The estimate of just over $226 million in revenue is just a hair higher than the $223 million reported in 2017’s first quarter, according to Thomson Reuters Eikon.
Element Fleet Management missed fourth-quarter EPS estimates by just over 5 per cent, but it was the first time in six quarters the company hadn’t beaten or missed just slightly. That, of course, comes after re-setting expectations: In March, it warned that it needed to cut its 2018 earnings guidance and engage in a lengthy turnaround process, and the shares fell 36 per cent.
There may be less drama, at least on the earnings front, from Hydro One Ltd., also set to report Tuesday before the market opens. Analysts expect, on average, 33 cents of EPS on just over $1.78 billion in revenue. While Hydro One may not have the volatility of Element Fleet Management, it has a mixed track record: According to Eikon, it missed EPS estimates for three quarters before beating them, by nearly double-digits, in the past two. It’s missed on revenue expectations in all five of those quarters, Eikon says.
Still, the stock is steady, not having moved more than 4.2 per cent in either direction in the seven days after those announcements, with bumps of 0 to 2 per cent more typical.
Also on tap Tuesday morning: Boyd Group Income Fund, where analysts expect, on average, 97 cents EPS on just under $450 million in revenue. The automotive-repair company has a string of minor misses, and one in-line-report, stretching back six quarters.
Analysts expect Endeavour Mining Corp. to report EPS of 35 US cents, but who knows, really? The company reported 55 US cents in the fourth quarter when the consensus was 21 cents, and the company has five EPS surprises, positive and negative, of 49 per cent or more in the past eight quarters.
Auto-parts maker Linamar Corp. is scheduled to release earnings after markets close Tuesday, with an investor conference call scheduled later. Like its peers, it has seen its shares bounce around as much by international-trade news as by earnings. Tuesday, it’ll have the chance to set its own agenda. Analysts expect EPS of $2.43 on revenue of just under $1.88 billion; with the exception of a spill in 2017’s third quarter, Linamar has eight quarters of EPS beats, including a fourth-quarter outperformance that sent shares up nearly seven per cent in the following seven days.
Note: The earnings-per-share numbers expected by analysts and reported by the companies are typically adjusted for items they consider special, unusual or non-recurring. The EPS figures in this story may not match the companies’ net income per share as calculated by generally accepted accounting principles.
David Milstead