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Making sense of the markets this week: November 12, 2023


Nov 11, 2023


Disney (and most U.S. corporations) shock to the upside

With 88% of corporations within the S&P 500 having now reported outcomes, practically 9 in 10 have surpassed earnings estimates. Shoppers proceed to really feel worse concerning the financial system, and firms simply proceed to make more cash. It’s fairly an odd time to attempt to make sense of the markets.

U.S. earnings highlights

That is what two American corporations reported this week. All figures under are in U.S. {dollars}.

  • Uber (UBER/NASDAQ): Earnings per share of $0.10 (versus $0.12 predicted), and revenues of $9.29 billion (versus $9.52 billion predicted). 
  • Disney (DIS/NYSE): Earnings per share of $0.82 (versus $0.70 predicted), and revenues of $21.24 billion (versus $21.33 billion predicted).

Disney’s outperformance was mainly as a result of ESPN+ subscriptions and continued income will increase at theme parks. Traders seem like large supporters of CEO Bob Iger’s announcement that Disney will “aggressively handle” its prices and can now be focusing on $7.5 billion in value reductions (up from a $5.5 billion goal earlier within the yr). Shares had been up 4% in after-hours buying and selling on Wednesday. 

“As we glance ahead, there are 4 key constructing alternatives that might be central to our success: attaining important and sustained profitability in our streaming enterprise, constructing ESPN into the preeminent digital sports activities platform, bettering the output and economics of our movie studios, and turbocharging development in our parks and experiences enterprise.” 

— Disney CEO Bob Iger

Uber, alternatively, had a extra subdued day. The earnings miss was contextualized by CEO Dara Khosrowshahi, when he identified that gross bookings for people-moving mobility had been up 31% yr over yr (YOY), whereas UberEats gross bookings had been up 18% YOY. The markets appeared to agree with Khosrowshahi’s spin, as shares had been up 3% on Tuesday, regardless of the earnings information.

Canadian fossil fuels worthwhile—for now

Regardless of a United Nations report stating that Canadian fossil fuels must be saved within the floor, the sector continued proper on pumping out earnings this quarter. 

Canadian earnings highlights

Right here’s what got here out of the earnings report. 

  • Keyera Corp. (KEY/TSX): Earnings per share of $0.36 (versus $0.50 predicted). Income of $1.46 billion (versus $1.60 billion estimate).
  • TC Power Corp. (TRP/TSX): Earnings per share of $1.00 (versus $0.98 predicted). Income of $3.94 billion (versus $3.91 billion estimate).
  • Suncor Power Inc. (SU/TSX): Earnings per share of $1.52 (versus $1.36 predicted). Income of $12.64 billion (versus $12.85 billion estimate).

Whereas accounting modifications at Keyera resulted in an earnings-per-share miss, shareholders appeared to take the information in stride. Share costs had been down lower than 1% on Wednesday. Administration highlighted the Pipestone growth being on observe and to be accomplished within the subsequent two months, in addition to a current credit score improve. The corporate was in nice form going ahead. With web debt to adjusted EBITDA (earnings earlier than curiosity, taxes, depreciation and amortization) at 2.5 occasions, the corporate is on the conservative aspect of its 2.5- to 3-times goal vary.

TC Power was up practically 1% on the day after constructive earnings information and the announcement that the brand new Coastal GasLink was accomplished forward of the year-end goal. Administration additionally said that it’s taking steps to strengthen the corporate’s steadiness sheet, together with promoting off $5.3 billion in asset gross sales that might be used to pay down debt.

Regardless of whole barrels of oil produced falling from 724,100 to 690,500 in final yr’s third quarter, Suncor outperformed expectations and shares rose 3.7% on Thursday. Traders had been forgiving within the lower of adjusted earnings as a result of decrease crude oil costs and elevated royalties.

The corporate attributed the lower in adjusted earnings to decrease crude costs and a weaker enterprise atmosphere, in addition to elevated royalties and decreased gross sales volumes as a result of worldwide asset divestments.


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