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Since Roots Corp. debuted on the TSX just last year, it has only one earnings announcement in its track record. But the numbers were sufficiently dazzling that investors bid up the shares Tuesday, perhaps in anticipation of what might come Wednesday morning.

The iconic Canadian clothing retailer had an underwhelming IPO, falling by 20 per cent its first day, and spent a chunk of 2017 with its shares trading in the single digits. But after Roots beat earnings-per-share expectations by 42 per cent when it released its fiscal third-quarter numbers in early December for the three months ended Oct. 28, the shares went on a new trajectory. Tuesday, they closed at $11.47, up 2.2 per cent and within striking distance of their 52-week high of $12.28, set in January.

Analysts expect, on average, EPS of 53 cents on revenue of just over $124 million, according to Thomson Reuters Eikon. Analysts are warming up to the stock, with two analysts in the past 30 days bumping up their fourth-quarter EPS estimates.

Analyst Camilo Lyon of Canaccord Genuity says he believes Roots’ third-quarter gain in same-store sales of more than 10 per cent gave it momentum that carried over into the fourth quarter. Also, he says, the company reduced the number of items it sells by 26 per cent in the quarter, removing slow-selling goods. That focus on higher-volume products should improve the cost of goods sold and profit margins, he says. He has a buy rating an $14 price target.

Wednesday’s moves will include a number of big U.S. names that reported after the markets closed Tuesday.

CSX Corp., one of the biggest U.S. rail operators, reported a stronger-than-expected quarterly profit on Tuesday, driven by cost-cutting. Shares of the Jacksonville, Florida-based company rose 3.7 percent to $58.65 (U.S.) in after-hours trading.

CSX said its operating ratio, which measures operating expenses as a percentage of revenue, fell to 63.7 percent in the first three months of 2018 from 73.2 percent a year earlier.

Excluding one-time items, CSX earned 78 cents (U.S.) per share, topping analysts’ average expectation of 66 cents (U.S.), according to Thomson Reuters I/B/E/S. Revenue rose slightly to $2.88 billion (U.S.).

Investors may extrapolate CSX’s numbers, to some degree, to Canadian Pacific Railway Ltd., which reports after markets close on Wednesday. Canadian National Railway Co. reports April 23.

Airline shares may see a boost Wednesday as United Continental Holdings Inc., the third-largest U.S. airline by passenger traffic, beat expectations and eased concerns of industry fare wars.

United Continental handily beat analysts’ estimates, reporting EPS of 50 cents (U.S.) versus average expectations of 43 cents (U.S.). Higher fares helped offset the costs of fuel and a rash of winter storms. Operating revenue rose to $9 billion (U.S.) from $8.4 billion (U.S.) a year ago, meeting analysts’ estimates.

Last quarter Chicago-based United sent airline industry shares lower by sparking concerns about fare wars with its aggressive capacity expansion plans. The carrier said Tuesday it was adjusting its plans for capacity growth for the year, aiming for a rate of between 4.5 percent and 5.5 percent. Its previous expected range was between 4 percent and 6 percent.

The news wasn’t so good at International Business Machines Corp., which issued a full-year profit forecast late Tuesday that missed Wall Street expectations. The shortfall was ever-so-slight — IBM said it continues to expect adjusted earnings per share of at least $13.80 (U.S.), while analysts were expecting $13.83 (U.S.) — but it sent the shares of the company down 6 percent in extended trading.

That guidance miss offset a beat for the company’s first quarter. Excluding special items, the company earned $2.45 (U.S.) per share, beating the analyst average estimate of $2.42 (U.S.), according to Thomson Reuters I/B/E/S.

Wednesday morning, Morgan Stanley and U.S Bancorp. report, continuing a run of earnings from major U.S. financials. While JPMorgan Chase & Co. missed expectations Friday, citing soft capital markets revenue, Goldman Sachs beat consensus handily Tuesday and surprised the street by bullishly saying it would pause share buybacks in the second quarter and instead use capital to facilitate trades, loans and deals for customers. Morgan Stanley stock was essentially unchanged Tuesday as Goldman fell 1.65 per cent.

Wednesday after markets close, Kinder Morgan Inc. will release earnings.

With files from Reuters

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