A stock that might move a bit on earnings news? Let’s go with the safe pick, Valeant Pharmaceuticals International Inc., which releases first-quarter numbers Tuesday before the bell.
Last time around, when Valeant’s full-year 2017 results were due, we said “Volatility, thy name is Valeant” and noted that in three of the prior four earnings-related trading sessions, the stock had moved in double digits. Well, that February announcement was no exception, with an 11 per cent drop on a downward revision on 2018 revenue guidance.
The first-quarter announcement might not prove as earth-shaking, but with investors rushing in and out of the shares on the slightest of news, management’s pronouncements can easily yield action. Analysts expect, on average, 59 US cents of earnings per share on just under US$1.94 billion in revenue, which would represent a year-over-year profit decline. Two other big drug companies, Endo International Plc and Perrigo Company Plc, report Tuesday as well.
Broadly, watch the energy sector as a whole as U.S. President Donald Trump is expected to announce Tuesday whether the country will honor the international nuclear deal with Iran or pull out of it. Early reports suggested Mr. Trump would scrap it, returning to past sanctions.
Tuesday’s corporate Canada calendar also includes CCL Industries, the label- and container-maker that joined the S&P/TSX 60 in 2017. CCL is coming off its biggest beat of the past two years, having exceeded its EPS expectation by 31 per cent in its 2017 fourth quarter. Before that, however, came CCL’s only miss in the previous eight periods. Analysts expect, on average, 67 cents on revenue of just over $1.2 billion. Which CCL will reveal itself Tuesday?
Analysts expect Loblaw parent George Weston Ltd. to report EPS of $1.43 on just under $10.75 billion in revenue. An EPS beat of 6.5 per cent above consensus in the most recent quarter was George Weston’s first positive surprise since the beginning of 2016, according to Eikon. Subsidiary Loblaw Cos. Ltd. (Weston owns just under half) reported a mild first-quarter surprise last week.
WestJet Airlines Ltd. reports before the bell Tuesday; analysts expect 36 cents of EPS on revenue of just over $1.2 billion. The airline has consistently outperformed expectations, with beats in each of the past eight quarters, according to Eikon. In the most recent two, however, EPS exceeded consensus by 3.1 per cent and then 0.5 per cent, not nearly the lovely surprise of 10 per cent to 50 per cent-plus in early 2017.
Utility TransAlta Corp. is expected to report EPS of 2 cents on just under $625 million in revenue. The company is coming off a big miss in the fourth quarter, when analysts expected break-even earnings but the company recorded a 50-cent-per-share loss.
Quebec commercial-property owner Cominar REIT is expected to report adjusted funds from operations of $1.04 per share on $213-million in revenue.
Other U.S. names slated for a Tuesday before-market release include oil and gas producer Energen Corp., which had been under pressure from activist investor Keith Meister, and satellite company Dish Network Corp, which is expected to report a drop in revenue when it releases its first-quarter results as it loses more subscribers in its legacy pay-TV service.
In Monday evening’s Canadian earnings, Sleep Country Canada Holdings Inc. hit earnings expectations of 30 cents of EPS, but revenue of $135.3 million came in below analysts’ consensus of just under $138 million. It’s a comedown from the prior quarter, when Sleep Country beat revenue and posted a blowout EPS quarter, exceeding consensus by nearly 30 per cent.
Human resources consulting and technology company Morneau Shepell Inc. reported revenue of $167.5 million, below average analyst expectations of $170 million.
Tourmaline Oil Corp. was also expected to post results Monday evening, as was fertilizer giant Nutrien Ltd.
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.
With files from Reuters