Q3 2021 Earnings Calendar

Posted by JM on November 22, 2021 

Earnings are in! 

As part of our process, we monitor earnings releases to make sure our good dividend growers are continuing to grow their earnings and that management continues to provide positive guidance going forward. See full earnings calendar at the bottom of the post.

As expected, Q3 was another good quarter for the stocks on ‘The List’ with twenty one of our twenty-seven stocks meeting or exceeding Analyst expectations.

Beats:

Brookfield Infrastructure Partners (BIP-N) was our big winner again due to earnings contributions from a recent acquisition (Inter Pipeline) and the sale of a US district energy operation which closed in July.

Intact Financial (IFC-T) was also up significantly, exceeding estimates by over 50%. This was primarily due to the additional earnings provided by the RSA Insurance Group acquisition in June of this year.

“RSA contributed 8% accretion to Q3-2021 NOIPS, bringing accretion to 9% for the four-month period since closing. Given the overall strength of Intact’s results, immediate high single-digit accretion is evidence of the quality of the acquired portfolio. We have increased confidence in achieving our target of high single-digit accretion in the first 12 months and upper teens within 36 months of closing.”

Great to see our companies on ‘The List’ acquiring and integrating successfully. This bodes well for continued growth.

Dividend Increases:

A few of our dividend growers did exactly that, extending their dividend growth streaks and announcing dividend increases in Q3, getting a head start on 2022.

TFII-T from .23 to .27 up 17.4%
WCN-N from .205 to .23 up 12.2%
CTC-A-T from 1.175 to 1.3 up 10.6%
IFC-T from .83 to .91 up 9.64%
FTS-T from .505 to .535 up 5.94%
EMA-T from .6375 to .6625 up 3.92%
T-T from .3162 to .3274 up 3.54%

In the news:

Equitable Group Inc. (EQB-T) announces two for one split of its common shares this quarter. We sent out a tweet when this happened. We mentioned that we like stock splits for the simple reason they prove that there has been growth.

Another announcement of significance this quarter was the lifting of pandemic-related restrictions that prevented banks and insurers from raising dividends and buying back shares. We will be watching our bank stocks on ‘The List’ closely for dividend increases when they report Q4 earnings later this year.

Misses:

The stocks that surprised the most with significant earnings misses were MGA-N and SJ-T.

Magna International Inc. (MGA-N) missed expectations due to a sales decrease of 13% in Q3.

“Industry pressures intensified in the third quarter of 2021, resulting in a challenged operating environment. As a result of semiconductor chip shortages, our customers’ production schedules were unpredictable, causing labour and other operational inefficiencies at our facilities. Semiconductor chip shortages and related production disruptions are expected to continue into 2022, and the negative impacts continue to exceed our expectations from earlier this year. Our results were also negatively impacted by inflationary cost increases in production inputs including freight, labour and commodities.”

We will watch closely to see if the uncertainties above are transitory in nature or become longer term concerns.

Stella Jones Inc. (SJ-T) missed earnings expectations by 20%. Management attributes the miss to the volatility of lumber prices during the quarter which increased their costs in their utility pole and railway ties segments that outpaced any price adjustments. They also saw a softening of demand in their logs and lumber sales. Management remains confident in the near term that revenue and profitability will be up year over year and announced an acquisition during the quarter, Cahaba Pressure Treated Forest Products Inc.

“Based on current market conditions and assuming the conclusion of the acquisitions of Cahaba Pressure and Cahaba Timber, management is forecasting sales, EBITDA and EBITDA margin in 2022 to be comparable to the solid results expected in 2021. The Company anticipates that the robust demand for utility poles, the sustained railway ties maintenance demand and the contribution from the pending acquisitions will offset the normalization of residential lumber sales in 2022.”

We are always wary of earnings misses but management seems confident going into the fourth quarter and beyond. We will give them the benefit of the doubt for now.

Update:

Enghouse Systems Limited (ENGH-T) which we highlighted as an under-performer last quarter showed a slight uptick in fundamental performance. Revenue and EBITDA were up slightly over Q2 and management announced two acquisitions during the quarter. The business seems to be trending in the right direction for now. We will continue to monitor.

Summary:

For the most part the Analysts were close with their estimates, with the median ‘beat’ in the range of 2%. Compare this to last quarter (8%), and earnings estimates are getting a bit more predictable as we come out of the pandemic.

Here is ‘The List’ sorted by reporting date complete with the market’s consensus estimates and actual reported results.