The Big Three: Canadian earnings blitz; analysts still bullish on SNC; U.S.-China trade
The focus is on fundamentals this morning amid a Canadian earnings bonanza. Some of the highlights since yesterday’s closing bell:
-TransCanada announced it's raising its quarterly dividend to 75 cents per share after reporting an adjusted profit that exceeded estimates. The pipeline operator also reiterated it's hunting for joint venture partners for its controversial Coastal GasLink project.
-Goldcorp booked a US$3.9-billion fourth-quarter non-cash impairment to account for new fair value estimates of its Peñasquito, Cerro Negro, Red Lake, and Éléonore mines. On an adjusted basis, the miner posted a modest profit.
-Canada Goose's third-quarter revenue surged 50.2 per cent and its adjusted profit exceeded estimates by 15 cents. The parka maker also fine-tuned (to the upside) its full-year revenue and profit per share growth forecasts.
-Bombardier's free cash flow rose 19 per cent in the fourth quarter to $1.04 billion and its adjusted profit narrowly beat the average estimate. In a message that will resonate in a few cities, CEO Alain Bellemare said he's focused on "flawless execution of our rail projects" in 2019.
-Canadian Tire’s total same-store sales rose 0.8 per cent in the fourth quarter with (relatively) strong performance at SportChek and Mark’s masking marginal sales growth at Canadian Tire stores that had been open for more than a year. We have CFO Dean McCann (who announced he’s retiring at year-end) on The Real Economy.
-TMX Group is raising its dividend and its fourth-quarter profit was in line with estimates on a 22 per cent surge in revenue despite a downturn in listing fees. We’ve got CEO Lou Eccleston on The Close.
-Manulife Financial announced it’s boosting its share buyback program after reporting an eight per cent rise in core fourth-quarter profit amid double-digit growth in Asia.
-Canaccord Genuity outpaced third-quarter estimates and its earnings release includes a laundry list of all the cannabis deals that helped pad its revenue in the quarter. It also announced it’s paying up to $113.2 million to acquire M&A shop Petsky Prunier.
-Telus’s revenue rose six per cent in the fourth quarter. It added 112,000 postpaid wireless subscribers, matching Rogers’ performance, but trailing BCE (disclosure: we’re part of BCE’s Bell Media division)
It was pure political theatre at yesterday’s meeting of the House justice committee as Liberals denied the opposition parties’ attempt to haul in Jody Wilson-Raybould and other big names like Gerald Butts, to discuss the alleged political interference in SNC’s corruption case. Instead, the can got kicked to Feb. 19, when lawmakers will meet in private to decide on next steps.
CHINA-U.S. TRADE TALKS
Our Bloomberg News partners are reporting U.S. President Donald Trump is considering an 60-day extension of his tariff standstill agreement with China. Meanwhile, Trump’s trade representative and treasury secretary are on the ground in Beijing, where they’re meeting with China Vice Premier Liu He ahead of a potential tête-à-tête between Robert Lighthizer and China President Xi Jinping.
AIRBUS SCRAPS A380
Quite a move by the company that now controls the CSeries (renamed A220). Airbus announced this morning it will cease production of its A380, taking a 463-million euro hit in the process. The decision was made after Emirates scaled back its order for the superjumbo. “We have no substantial A380 backlog and hence no basis to sustain production,” said outgoing CEO Tom Enders in a release, adding it was a “painful” decision. Meanwhile, its order backlog includes 480 A220s.
LIVE ON LOCATION
BNN Bloomberg's Paul Bagnell will be on location later this morning at the Canadian International Autoshow. Watch for his show-and-tells on The Open and Commodities, plus an interview with GM Canada’s president later in the day.
The Quadriga CX fiasco returns to a Halifax courthouse today, where law firms are jostling for the opportunity to represent clients who've been burned by the crypto platform's demise and the ensuing wild goose hunt for almost $200 million in crypto assets. The latest insight on that hunt can be found in a court monitor’s report from earlier this week.
OTHER NOTABLE STORIES
-Sierra Wireless plunged almost 25 per cent at the start of trading after a first-quarter profit warning late Wednesday
-BMO Capital Markets announced this morning it’s hiring former cabinet member Scott Brison as vice-chair of investment and corporate banking.
-Germany has dodged a recession by the skin of its teeth. The country’s economy flatlined in the fourth quarter after contracting 0.2 per cent in the third quarter.
-Spin Master reported a four per cent drop in fourth-quarter gross product sales, with weaker demand for Hatchimals weighing down sales in its remote control and interactive characters unit.
-Notable earnings: Bombardier, Canopy Growth, Agnico Eagle, TransCanada, Precision Drilling, Canadian Tire, Canada Goose, Brookfield Asset Management, Fairfax Financial, Coca-Cola
-Notable data: Canadian manufacturing sales, Canadian new housing price index
-9:00 a.m. ET: Financial Accountability Office of Ontario release report comparing fiscal position with other provinces
-10:15 a.m. ET: Finance Minister Bill Morneau and Employment Minister Patty Hajdu make announcement in Toronto re. skilled workforce (plus avail at 11:15 a.m. ET)
-10:30 a.m. ET: WestJet hosts media tour of new Dreamliners
-10:30 a.m. ET: Saskatchewan Court of Appeal resumes hearing government's reference case on constitutionality of the carbon tax
-11:00 a.m. ET: Ontario Premier Doug Ford and Economic Development Minister Todd Smith make announcement in Woodbridge re. auto sector (plus media avail)
-12:00 p.m. ET: Another round of Brexit amendment votes in U.K. Parliament
-12:00 p.m. ET: Sting performs in Oshawa, plus news conference with Unifor National President Jerry Dias at 1300
-13F filing deadline
Every morning BNN Bloomberg's Managing Editor Noah Zivitz writes a ‘chase note’ to BNN Bloomberg's editorial staff listing the stories and events that will be in the spotlight that day. Have it delivered to your inbox before the trading day begins by heading to www.bnnbloomberg.ca/subscribe.