Making sense of the markets this week: February 12, 2023
Canadian Telecoms dial up their earnings results
No big surprises from Canada’s major telecommunications companies that wrapped up their 2022 earnings statements: Telus slightly underperformed expectations; while Rogers outperformed; and Bell finished exactly where most thought it would.
Here are the Big Tech earning highlights:
- Rogers (RCI.B/TSX): Earnings per share of $1.09 (versus $0.98 predicted) and revenues of $4.17 billion (versus $4.16 billion predicted).
- Bell (BCE/TSX): Earnings per share of $0.71 (versus $0.72 predicted) and revenues of $6.44 billion (versus $6.39 billion predicted).
Telus forecasted sunny skies, predicting big gains in both revenue and earnings for 2023, due to its capital spending needs trending down. The company was quick to point out, despite the lower-than-expected earnings results, that its wireless growth numbers and focus on global health operations should continue to pay off in 2023.
Bell continued to reward dividend-conscious shareholders as it increased its annual dividend from $3.68 to $3.87, and reported record growth in its fibre business.
The big story on the Canadian telecommunications horizon is still the “will they or won’t they?” corporate relationship of Rogers and Shaw. The $20 billion takeover by Rogers is seeking final approval from Industry Minister Francois-Philippe Champagne. You can read more about Canadian telecommunications stocks at MillionDollarJourney.com.
Disney shareholders welcome back return of Bob Iger and a reinstated dividend
Investors were eager to see what Disney (DIS/NYSE) had in store for its first earnings call since CEO Bob Iger returned to the fold after a three-year “retirement.” Iger is legendary in management circles for guiding Disney to key acquisitions (including Marvel, Pixar and Star Wars), and he replaced his successor Bob Chapek. He started his latest tenure on November 20, 2023, so we’re not sure how much credit Iger can take for Q4 earnings, but a big beat of expectations is certainly a great way for him to take the helm again. (All in U.S. dollars in this section.)
Disney earning highlights:
- Earnings per share: $0.99 versus $0.78 predicted
- Revenue: $23.51 billion versus $23.37 billion predicted
- Disney+: Subscription losses came in lower than expected after a price increase
- Shares: Up 5% in after hours trading on Wednesday, February 8, 2023
Also, Iger announced that Disney is to lay off 7,000 employees and that the company is restructuring into three main divisions:
- Disney Entertainment, including streaming and media operations
- ESPN
- Parks, experiences and products
Finally, dividend-conscious investors will be pleased to hear that, nearly three years after the elimination of Disney’s dividend, the company will look to introduce it again in 2023, with Iger stating, “Our cost-cutting initiatives will make this possible, and while initially it will be a modest dividend, we hope to build upon it over time,” Iger said.
A couple of other notable earnings results south of the border this week included Paypal and Chipotle.
