Several TSX stocks are poised to have a big month in March 2023. Going by the Globe and Mail’s TSX earnings calendar, dozens of TSX-listed companies will be reporting their earnings this month. Earnings announcements are big events for stocks, because they reveal financial data that tends to move stock prices. In this article, I will explore two TSX stocks that could have a big month in March 2023 thanks to their upcoming earnings releases.
BCE Inc (TSX:BCE) is a Canadian telecommunications (“telco”) stock that’s set to release earnings on March 14. This earnings release could be a big deal. Telcos like BCE tend to have a lot of debt, making them among the companies that can be negatively impacted when interest rates rise. On Wednesday, the Bank of Canada chose to keep interest rates at their current (fairly high) level, so next week’s BCE earnings release could set the tone for the rest of the year.
What’s BCE likely to report in its upcoming earnings release?
It’s hard to predict with any certainty, but we know that last quarter BCE eked out a little bit of revenue growth (3.7%) while profits declined. In the quarter, BCE delivered:
- $6.43 billion in revenue, up 3.7%
- $567 million in net income, down 13.5%
- $654 million in adjusted net income, down 5.5%
- $2.1 billion in cash flows from operating activities, up 18%
- $376 million in free cash flow, up 376%
Overall, it was a pretty good quarter. The free cash flow increase was pretty impressive, earnings less so.
BCE’s next quarterly release will probably look similar to the previous one, in terms of revenue at least. BCE earns recurring revenue that comes in over the course of two years (a typical contract length). Therefore, if revenue increased 3.7% year-over-year last quarter, it should increase by a similar amount in the coming quarter – unless BCE gains or loses customers. Overall, I would expect lukewarm performance from BCE in the months ahead.
National Bank of Canada (TSX:NA) is another Canadian company that has earnings coming out this month – in this case, on March 24. As a bank, NA has the potential to gain from rising interest rates. Last year, the Bank of Canada raised interest rates multiple times. That led to a surge in net interest income at Canada’s major banks. In its most recent quarter, National Bank’s revenue increased 17%, driven by higher net interest income. We could see similarly strong results this quarter. The higher interest rates go, the more interest banks collect on loans – particularly variable rate loans. National Bank has a lot of such loans, so it might do pretty well when it releases earnings on March 24. The bank also has a brokerage service, which was the first in Canada to go zero-commission, so it will be interesting to see how things play out in that part of the business.
It’s going to be a busy March for Canadian stocks. Many big earnings releases are coming out, and investors may find plenty of surprises worth reading about. The two stocks mentioned in this article, in particular, are worth taking a look at ahead of earnings.