BRP says it will appeal a $60-million judgment in a patent-infringement lawsuit filed against it by rival Arctic Cat Inc.Bloomberg
With all due respect to Bombardier Inc. and its zooming stock, BRP Inc. is the Bombardier that has the better time on earnings day.
BRP — also known as Bombardier Recreational Products — has beaten Bay Street consensus earnings expectations for six straight quarters, thrice by more than 100 per cent. By contrast, despite a comeback that has seen its shares more than triple from their lows, Bombardier has managed to miss earnings expectations in four of the previous eight quarters.
BRP's streak is on the line Wednesday morning, as the maker of Ski-Doos and other fun vehicles releases results for its fourth quarter and full year. For the fourth quarter analysts expect $1.24 billion in revenue and 91 cents per share in earnings.
Analyst Steve Arthur of RBC Dominion Securities expects a solid quarter, but says the company has a "challenging" year-over-year comparison "given unusually high snowmobile shipments [in 2017]." That leads to forecasts of a revenue decline for the company. He expects a small decline in earnings per share; at 96 cents, his estimate is above the consensus.
Mr. Arthur, who has a "sector perform" rating on BRP, expects management to discuss the retail environment for all its products. He says BRP competitor Polaris Industries' recent commentary suggested Polaris lost market share in the market for side-by-side (off-road) vehicles. And yet, Mr. Arthur notes, a recent pullback in BRP shares has widened its discount to Polaris, making it "increasingly interesting on a relative basis."
Global economic bellwether FedEx Corp. was up slightly in Tuesday afternoon after-market U.S. trading after its strong earnings report. FedEx reported adjusted EPS of $3.72, versus a consensus of $3.11, with revenue of $16.5 billion topping the $16.16 average estimate. FedEx said its daily package volume was up 6 percent in the quarter.
The company also issued guidance for the current fiscal year in excess of analysts' consensus, saying it expected EPS of $17.90 to $18.30, excluding certain items including pension accounting, Consensus had been a $17.06 average.
Facebook isn't releasing earnings this week, but it likely wishes it was, because the headlines around its problems with Cambridge Analytica have been uniformly negative. Regulators, politicians, and plaintiffs' attorneys in multiple countries have seized on the news that the political firm, affiliated with Donald Trump's campaign, acquired and possibly misused Facebook user data.
In two days of declines this week, investors have erased $50 billion USD in market value — but, at $488 billion USD, the company remains one of the 10 most valuable in the world. Investors could pile on Wednesday, or decide that the market has overcorrected.
Back home, Canadian stocks set to announce between Tuesday night and Wednesday's market open include Automotive Properties Real Estate Investment Trust; Cardinal Energy Ltd.; AGT Food and Ingredients Inc. and TSO3 Inc.
With files from Reuters
David Milstead