A Mixed Bag of Earnings on a Busy Wednesday

Some winners and some losers as 2nd quarter results begin to roll through.

| More on:
The Motley Fool

It’s a busy day on the earnings front for a collection of Canada’s most prominent companies.  Let’s jump right in to see who’s made investors happy, and who hasn’t:

Encana (TSX:ECA)

From the prospective of releasing better than expected results, Encana had a great quarter.  Normalized earnings checked in at $0.34/share which compared very favourably to the $0.18/share expected.  The company also announced that it’s now 75% hedged through the balance of 2013.  This is up from 52% at last report.  More hedges were added during the quarter at $4.37/mcf.

Though the results look good, the stock is basically flat on the day – an indication that the market is looking for something else out of this company.  More important than current results is what’s going on with management as the company’s Chairman announced he’s leaving.  A strategic review is expected at some point in the fall out of this company and until that occurs, expect Encana’s stock to be more or less stalled.

Rogers (TSX:RCI.B)

Rogers reported an inline quarter, which was seemingly a welcomed sight as the stock has lifted by +2%.  Similar to Encana however, this quarter is not overly important to Rogers’ trajectory over the balance of 2013.  Developments on the competitive front, specifically relating to Verizon will dictate whether today’s move is the start of a more significant rally or merely a hiccup in the stock’s decline.

Cenovus (TSX:CVE)

Out of the companies we’re touching on here, Cenovus had by far the worst quarter.  EPS checked in at $0.34 compared to the $0.45/share that Capital IQ indicated was the consensus expectation.  An impairment charge of $109 million was taken during the quarter and the mid-point of the company’s production guidance was reduced by 2%.  In addition, operating cost guidance was increased by 12%.  Cenovus is having issues with its Foster Creek and Pelican Lake projects, and the market doesn’t like it.  The stock is down by close to 4%, after having a nice little rally of late due to the run up in oil prices.

CP Rail (TSX:CP)

CP disappointed the market with lighter than expected earnings just like its rival CN did after Tuesday’s close.  Granted, these earnings are huge improvements over last year, but these improvements are now very much priced into the company’s stock.  During the quarter, CP faced a $25 million revenue headwind due to the flooding in Western Canada, as well as $35 million in train accident related costs.  This was an increase over the normal level of $15 million.  CP’s operating ratio stands at 71.9%, which is a remarkable achievement compared to the low-80% range that is was in this time last year, however, again, it’s all about expectations, and CP didn’t meet them.

For serious long-term gains, cutting out the quarterly noise and parking your hard earned savings in the world’s greatest businesses is a proven formula.  In our special FREE report “3 U.S. Stocks That Every Canadian Should Own” we profile 3 such businesses.  To download this report at no charge, simply click here now.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler owns shares of Cenovus Energy.  David Gardner owns shares of CN Rail.  The Motley Fool doesn’t own shares in any of the companies mentioned.   

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.

More on Investing

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

Paper Canadian currency of various denominations
Bank Stocks

1 Magnificent Canadian Dividend Stock Down 28% to Buy and Hold for Decades

This top Canadian dividend stock is underperforming its large peers this year, but a turnaround could be on the horizon.

Read more »

TFSA (Tax-Free Savings Account) on wooden blocks and Canadian one hundred dollar bills.
Dividend Stocks

Where to Invest Your $7,000 TFSA Contribution

The TFSA is attractive for investors who want to generate tax-free passive income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Dividend Stocks

TFSA Investors: 3 Dividend Stocks Worth Holding Forever

These TSX stocks have the potential to grow their dividends over the next decade, making them top investments for TFSA…

Read more »

hand stacks coins
Investing

Secure a Wealthy Future With These 3 Canadian Stocks

These Canadian stocks have the potential to appreciate substantially over time and may also enhance returns through dividend payments.

Read more »

Tractor spraying a field of wheat
Dividend Stocks

Is Nutrien Stock a Buy for its Dividend Yield?

Nutrien is down more than 50% form the 2022 highs. Is NTR stock now oversold?

Read more »

analyze data
Investing

3 Blue-Chip Stocks Every Canadian Should Own

These blue-chip stocks are backed by large-cap companies with well-established businesses, solid fundamentals, and a growing earnings base.

Read more »

dividends grow over time
Stocks for Beginners

The Smartest Growth Stock to Buy With $2,000 Right Now

Do you have $2,000 to invest for the long term? These three TSX stocks have and will continue to deliver…

Read more »