Mr Price Action/ February 13, 2017/ Earnings Season/ 0 comments

Q4 Earnings – Week 2017-02-12

Based on the earnings release the Q4 season easily qualifies as the best of the last six years. Despite all turbulence in the markets, post-US elections volatility, renewed optimism above US corporate world the higher USD and lower prices of oil are having weaker impact on corporate profits and revenues. The EBITDA and revenue growth are back to black and is likely the growth trend will continue well into 2017. But let’s have a look what names report this week:

AIG – market is expecting higher profit after not very perfect 2015

PepsiCo – as for Coca-Cola the stronger USD, recent slowdown and changing underlying consumers’ behaviour effect the company results. More and more people search for healthier food and beverages and is also topped from regulation side by few changes in labelling the products and adding warnings about negative effects of sugars. On the other hand the higher prices of some of its products and better demand for healthier products can be supportive. While going into earnings release bear in mind that company is above its peers in terms of various metrics. Expectations are for revenue growth of 5% and EPS growth of 9%, both y/y.

Cisco – the company seems to have a hard time to turn the business upside down and enter new but fast growing and profitable business of datacenter and internet of things playing field, cloud and security. As it is stuck for now to its core traditional business the revenue is to decline 3% and EPS 2%, both y/y. The comparison with peers shows us the company is below the average.

Nestle – investors are curious about new CEO and his direction and focus (nutrition and pharmaceutical part). All of that will be watched apart from revenue that is expected to growth 2% y/y and EPS to decline 3% y/y.  The company is suffering from an ongoing slowdown and emerging markets may put additional pressure if the economic rebound in Q4 was not translated into higher revenue for Nestle. From a perspective of comparison with its peers, it is worth to look at the company valuation and price actions (charts) as it has underperformed lately.

GoldCorp – to report higher profit as the price of gold moved higher

Restaurant Brands International – new restaurant opening and changes to menus should prompt the profits higher. Just wondering how the owner of Burger King and Tim Hortons can lure the customers in other countries.

TMX Group – to show pick up in profits and revenue from volatile trading across Canadian equities, derivatives and energy

Teva Pharmaceutical Industries – to report by has already warned about weaker 2016/2017 results. The generic producers is under heavy load of debt (from Actavis acquisition), weak US market and some not perfect management decisions.

TransCanada Corp – markets are expecting better results on higher shipping volumes of gas and oil. What will not fly by unnoticed will be the update on XL Keystone pipeline.

Hilton Worldwide Holdings – should benefit form better bookings of more expensive rooms despite business travel decline

Deere & Co – lower commodity prices of agricultural products to have negative impact on company results

Bombardier – to report smaller loss than last year (USD 673 mln). The impact of CSeries program still present.

Name Exchange Date Estimated EPS EPS growth y/y Estimated Revenue
Noble Energy US Mon -0.10 1,000
TMX Group CA Mon 1.12 0.184
AIG US Tue 0.34 131.1% 12,871
Heineken NL Wed 1.99 8.3% 10,477
Credit Agricole FR Wed 0.22 -30.2% 4,416
Air Liquide FR Wed 2.73 -2.0% 10,426
Danone FR Wed 1.58 5,410
PepsiCo US Wed 1.16 9.2% 19,535
Cisco Systems US Wed 0.56 -1.6% 11,534
Kraft Heinz US Wed 0.88 41.8% 6,755
GoldCorp CA Wed 0.13 1,080
AirFrance-KLM FR Thu
Nestle CH Thu 1.74 24,396
Schneider Electric FR Thu 2.29 16.4% 12,794
TransCanada CA Thu 0.72 12.7% 3,480
Charter Communications US Thu 1.07 185.8% 10,229
Duke Energy US Thu 0.81 -6.7% 5,892
Allianz GE Fri 3.66 22.8% 27,547
Enbridge CA Fri 0.58 20.0% 9,584
Deere & Co US Fri 0.53 -34.1% 4,675

Good luck Champs!

Mr Hawk


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