Feb 2, 2023
The Daily Chase: BCE and Rogers report Q4 earnings; Canada Goose shares drop
First Look With Surveillance: BOE Hike, Meta Soars
Can almost call it Telecom Thursday around these parts, with the nation's two largest service providers both reporting results. Let's start with Rogers Communications – the company topped fourth-quarter earnings expectations, with adjusted earnings per share coming in at $1.09 against analyst forecasts for $0.98, with the company's wireless unit leading the way. The telco added 193,000 wireless postpaid subscribers in the quarter, up some 37 per cent from a year ago. Rogers sees the momentum continuing into this year, with expectations adjusted EBITDA will increase by between five and eight per cent in fiscal 2023. Of course, the elephant in the room remains the proposed $20 billion takeover of Shaw Communications, which is still awaiting final approval from Industry Minister Francois-Philippe Champagne.
…AND NOW OVER TO BCE
So, something of a different story over at BCE – BNN Bloomberg's owner, through its Bell Media division – where the company is expecting an outright decline in adjusted earnings per share over the course of this year. BCE says it expects adjusted EPS will fall by between three and seven per cent in fiscal 2023, as the higher cost of debt-servicing, rising depreciation and amortization expenses and a lack of tax adjustments weigh on the bottom line. If we turn our attention back to the fourth quarter itself, BCE essentially met analyst expectations on both the top and bottom line, with revenue rising nearly four per cent from a year ago. Wireless postpaid growth came in at 41.2 per cent, hitting 154,617 in the quarter, and the company also raised its quarterly dividend 5.2 per cent to $0.9675 per common share.
CANADA GOOSE CUTS OUTLOOK
It's looking like a rough start to the day for Canada Goose – shares are down the better part of six per cent in New York – after the parka maker reported results that fell well below analyst expectations. The high-end parka-maker says COVID-19 lockdown measures in China hampered its third-quarter showing, notably in December, its busiest sales month of the year. To make matters worse, it's also cutting the outlook for the current fiscal year, forecasting margins and profit will be significantly thinner than earlier expected, in part because of the resulting buildup in inventory due to those slow Q3 sales.
LOBLAW TAKES INTERNET FLOGGING OVER PRICES
There's an old internet adage I like that goes “Each day on Twitter there is one main character. The goal is to never be it”, and my word, I don't think Galen Weston or Loblaw's social media manager have taken heed. The grocery giant has been taking a beating on social media over rising food prices (and the quiet end to its price freeze on No Name products) as consumers vent their frustrations, and the responses, uh, have not necessarily resonated with the angry audience (suggestions customers shop where they “most feel comfortable” in response to price comparisons to local grocers seemed to draw some ire, and this $104.53 roast didn't seem to land well.) Now, let's be clear – Loblaw is not a charity, and has a duty to shareholders. But with food inflation running in the double-digits, grocers posting strong profits, and the lingering shadow of the bread price-fixing scandal still on consumers' minds, the backlash probably should've been expected.
META SHARES SOAR AFTER REVENUE BEAT
Shares of Facebook-parent Meta Platforms are surging in the premarket – up the better part of 20 per cent – after the company topped fourth-quarter revenue expectations and forecasted first quarter earnings could come rise from a year earlier. The company is also embarking on what CEO Mark Zuckerberg is calling a “year of efficiency” where the firm will carve out layers of middle management and deploy more artificial intelligence to boost productivity. All told, it's still a rebound from a low level – shares of Meta are coming off their worst yearly performance in the company's history.
OTHER NOTABLE STORIES
- The European Central Bank has raised rates by half a per cent and is pledging there are more hikes to come as the European economy grapples with sky-high inflation.
- Speaking of central banks, the Bank of England also raised its key rate by half a per centage point and signalled further tightening may be necessary.
- Shell has reported its largest annual profit on record, with the bottom line swelling nearly US$40 billion as energy prices have remained firm in the wake of Russia's invasion of Ukraine.
- BMO has closed its US$16.3 billion deal to buy Bank of the West, more than 13 months after initially announcing the deal. The acquisition now gives BMO a footprint in 32 U.S. states.
- Lightspeed Commerce posted a $814.8 million net loss in its third quarter, driven in large part by a non-cash goodwill impairment charge of $748.7 million tied to the decline in the valuation of tech companies.
- Another day, another round of tech job cuts – this time it's VerticalScope, which announced plans to cut about 60 jobs, representing 22 per cent of the company's workforce.
- Notable data: : Building Permits, Challenger Layoff Report, U.S. Initial Jobless Claims, U.S. Productivity, U.S. Factory Orders
- Notable earnings: Brookfield Infrastructure Corp, Rogers Communications, BCE, Lightspeed Commerce, Canada Goose Holdings, Open Text, Methanex, Estee Lauder Cos., Merck & Co., ConocoPhillips, Lear Corp., Sirius XM Holdings, Honeywell International, Hershey Co., 1-800-Flowers.com, Bristol-Myers Squibb, Harley-Davidson, Eli Lilly, GoPro, Ford Motor, Apple, Alphabet, Qualcomm, Amazon.com, Starbucks