The earnings season is here. Earnings are like the open house where a stock’s quarterly performance is mapped and expectations are reset. Next week is important for four companies, as they release their second-quarter earnings. While their earnings figure may not quite be the apple of the eye, their guidance could revive confidence of recovery in the second half.
Canada’s telecom giant BCE (TSX:BCE)(NYSE:BCE) will release its quarterly earnings on August 5. The company reported positive revenue growth in the first quarter itself. This momentum is expected to continue in the second quarter. BCE is accelerating its broadband and 5G infrastructure investing, so I am hoping for some positive numbers in the wireless and wireline business.
BCE is not a growth stock, but still, it surged 3% a month after its previous quarterly earnings. I expect a positive stock momentum even after the second-quarter earnings and some higher numbers for the second half if it is on track to meet its full-year guidance of 2-5% revenue growth.
Bombardier (TSX:BBD.B) will release its second-quarter earnings on August 5 too. Throughout the quarter, the company has been repaying debt. So the key highlight of the earnings would be the 2021 and 2022 debt. I also expect to see some positive revenue numbers as it secured one of its biggest business jet orders for the year in this quarter.
I don’t expect a sea change in its earnings but some signs towards breakeven after several years of losses. What makes me optimistic about Bombardier is its share price recovery of over 214% that reflects the strengthening of fundamentals.
Magna International (TSX:MG)(NYSE:MGA) will report its second-quarter earnings on August 6. The company reported a strong recovery in the first-quarter earnings with an 18% sales growth. It saw a recovery in light vehicle production. The automotive market has been gradually recovering, and I expect another double-digit revenue growth in the second quarter.
Magna stock surged 3.8% in the week it released its first-quarter earnings. There could be some stable growth in the stock price next week. However, Magna is a stock to buy and hold for the long term. Don’t judge the company for its quarterly performance but look at its full-year growth. It is set to report accelerated growth as electric vehicle sales pick up.
Supply chain planning solutions provider Kinaxis (TSX:KXS) will report its second-quarter earnings on August 6. Unlike other stocks, Kinaxis stock saw a slump after the first quarter earnings even though it saw a surge in subscriptions. I expect the positive momentum in subscription to continue as it secures new customers and the demand returns from manufacturing and other segments.
Just like Magna, don’t judge Kinaxis’s quarterly performance. It signs long-term contracts with its customers, so there could be a deviation in cash flow depending on payments.
The above stocks could benefit from the recovery as the pandemic impacted their earnings significantly. They have already shown early signs of recovery in the first quarter. The second quarter could bring more positive news for fundamental investors that invest for the long term.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Puja Tayal has no position in any of the stocks mentioned. The Motley Fool recommends KINAXIS INC and Magna Int’l.