Earnings season is in full swing. There are over 60 TSX-listed companies expected to release earnings next week. It’s an exciting time for investors. Quarterly earnings and conference calls can provide significant insight into a company’s operations.
Companies use the opportunity to update guidance and make dividend announcements. Analysts are also engaged, quick to provide revised estimates and ratings. All of which can have significant impacts on a stock’s share price.
Expect the three companies below to make big moves post earnings this week.
Canadian National Railway (TSX: CNR)(NYSE: CNI)
Analysts are expecting modest earnings-per-share (EPS) growth of 3% for CN Rail. The company has been struggling with logistics, which has resulted in missed estimates in three of the past four quarters. This is out of the norm for this typically reliable performer.
On the back of Canadian Pacific Railway‘s earnings beat (despite a negative impact from labour negotiations) this past week, anything less will be a disappointment.
CN Rail has committed significant capital expenditures to upgrade its rail infrastructure. If the company shows improvement in this area, the company can make big moves to the upside. Analysts are turning bullish on the company, and earnings are being revised to the upside.
Suncor Energy Inc. (TSX: SU)(NYSE: SU)
Canada’s largest oil major is scheduled to report earnings on Wednesday, July 26. Expectations are high for the company. Second-quarter EPS is expected to rise to $0.63 from $0.12 a year ago. That is an increase of 425%!
Suncor will be under the microscope, as it expected to provide an update on the shutdown of the company’s Syncrude oil sands site in northern Alberta.
The production facility is an important one to the company. It produces 360,000 barrels a day, which is approximately 10% of Suncor’s total production. The plant has been offline since the end of June. The initial estimate was for the plant to come back online by the beginning of August. Most recently, insiders have claimed the plant will not come online until September at the earliest.
I expect weakness in the company’s share price if the hit to earnings and guidance is worse than initially thought.
Aecon Group Inc. (TSX: ARE)
After a failed takeover attempt by China Communications Construction Co. Ltd, Aecon Group’s share price has tumbled. Thursday’s second-quarter results will be the first since the failed takeover.
Analysts are bullish, expecting EPS of $0.16 — up significantly from the $0.01 EPS posted in 2017. The company is still without a permanent CEO, and any news on this front will benefit the Aecon’s share price.
Since the Feds stepped in and blocked the deal, Aecon has signed just shy of $1 billion in new contracts. The market is discounting the stock’s potential, and an earnings beat can send the shares flying.
