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These stocks are set for big moves Thursday

Globe and Mail columnist David Berman.

The Globe and Mail

At least half a dozen blue-chip Canadian companies, among some of this country's largest, will be reporting their quarterly financial results on Thursday morning, adding significantly to the first-quarter earnings picture that is emerging.

So far, about 70 per cent of companies in the S&P/TSX composite index have delivered their quarterly numbers, with mostly upbeat results.

According to Bloomberg, profits have grown more than 86 per cent over last year – although this gain is skewed by results from recovering commodity producers. On average, the results have topped analysts' expectations by an impressive 8 per cent. Sales have risen 6 per cent from a year earlier.

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Auto-parts giant Magna International Inc. will be one of the key companies to watch, given its large size and the fact that the company has been gripped by concerns over the international trade. The Trump administration has said it is keen to renegotiate the North American free-trade agreement, potentially affecting the cross border operations of Magna, and other auto-parts companies.

Magna's share price has been rising over the past month, by nearly 11 per cent, but is still down about 5 per cent from its recent high in December.

Nonetheless, analysts are upbeat, expecting Magna's profit to rise by 10 per cent, to $1.34 a share. Although the company missed expectations last quarter, its longer-term track record is superb, beating estimates during the previous 10 straight quarters by an average of more than 10 per cent.

Enbridge Inc., North America's biggest energy-infrastructure company after buying Houston-based Spectra Energy Corp. in 2016 as part of a wave of energy-sector deals, is expected to report a profit of 63.6 cents a share, down 16 per cent from last year. The company has missed expectations for the past three quarters.

Bombardier Inc. may provide more drama. The aerospace and transportation company is expected to report a loss of 1.6 cents a share, after some one-time adjustments, offering an improvement over a loss of 3.7 cents a share last year.

Apart from the numbers, expect some interesting commentary. The company has benefited from recent taxpayer aid, as it ramps up production of its new C Series jets. And that has led to moves from key institutional investors who want to overhaul Bombardier's board of directors and withhold votes for the company's executive chairman, Pierre Beaudoin.

Rounding out the day, expect quarterly results from Brookfield Asset Management, Canadian Tire and Telus.

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There will be more than earnings creating buzz in Canadian investment circles. It has been an awfully quiet couple of years for Canadian tech initial public offerings, but investors can expect some noise on Thursday morning when Real Matters Inc. starts trading following an IPO that values the company at about $1.2-billion.

The mortgage-services firm, which counts Canada's biggest banks among its customers, will start trading at $13 a share. However, given the fact that the IPO was seven-times overscribed, there may be some pent-up demand for this stock soon after the opening bell.

Of course, new companies often have a hard time living up to lofty expectations after their IPOs. Snap Inc., which operates the popular Snapchat application, demonstrated this on Wednesday when it released its first quarterly results since going public in March.

The company disappointed expectations for user growth amid concerns that rival Facebook Inc. can emulate many of its Snapchat app's features. Snap added 8 million daily active users during the quarter, taking the total user base to 166 million. Year-over-year growth slowed to 36 per cent. The initial reaction: Shares fell 21 per cent in after-hours trading.

Also in the U.S., department stores will be a sector to watch, as Nordstrom Inc., Kohl's Corp. and Macy's Inc. report their quarterly results.

The retail sector has been struggling, and these three companies are not exceptions, as consumers shop online or gravitate toward fast-fashion chains such as H&M, Zara and Uniqlo.

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Nordstrom, which has recently expanded into Canada and invested in line sales, saw its annual profit fall to $600-million (U.S.) in 2016, down about 17 per cent from the previous year. The shares have rallied nearly 20 per cent since the end of March, but are down about 40 per cent over the past two years.

Analysts are relatively upbeat this quarter. Their consensus profit estimate is 27.7 cents a share, up slightly from 26 cents a share last year. Given Nordstrom's recent track record, it's reasonable to assume the retailer will top estimates, too: It has sailed past estimates for three straight quarters.

In the case of Kohl's, analysts expect the company will report a profit of 29 cents a share, down from 31.6 cents a share last year. However, Kohl's has beaten estimates for the past three quarters, most recently by about 9 per cent.

Macy's, which has made plans to close 100 stores, is expected to report a profit of 34.6 cents a share, down from 37 cents last year. It, too, has a good record for beating estimates: It has reported better-than-expected profit in five of the past six quarters.

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