Retail earnings highlights
All numbers below are in U.S. dollars.
• Walmart (WMT/NYSE): Earnings per share of $1.80 (versus $1.65 predicted). Revenue of $173.39 billion (versus $170.71 billion predicted).
• Home Depot (HD/NYSE): Earnings per share of $2.82 (versus $2.77 predicted). Revenue of $34.79 billion (versus $34.64 billion predicted).
Walmart continued to show why it deserves its best-in-class status for mass retailers. Quarterly revenue was up 6% and e-commerce sales were up a massive 23%. No doubt shareholders were excited about the 9% dividend raise the company announced.
The big news from “the big blue retailer,” a.k.a. Walmart, was that it’s buying TV manufacturer Vizio for $2.3 billion. The move makes sense given how many Vizio TVs Walmart sells. The company pointed out that the acquisition would be a major boost for its advertising business, as it could now better track customer data. Look forward to massive Black Friday Vizio sales for years to come.
“Our market is on its way back to normal demand conditions. We’re not quite there yet, but the pressures we saw in 2023 are receding.”
—Richard McPhail, Walmart CFO
Home Depot announced that its sales were down about 3% from 2022’s fourth quarter, but that was significantly less of a pullback than it had been expecting, given the current high interest rate environment.
Canadian earnings: who needs profits anyway?
Sometimes you have to wonder if the analysts who predict quarterly earnings know what they’re talking about. Take Nutrien, Suncor and Loblaw, which all reported their earnings. Loblaw’s quarter was predictably boring, and the stock moved up slightly, score one for the analysts. However, Nutrien came in way below earnings expectations, yet the stock went up 7%. Suncor on the other hand had a great earnings report, but shares were down slightly on the day.
Canadian earnings highlights
Here are the numbers released this week. Note: Nutrien is a Canadian company based in Saskatoon, but trades on the New York Stock Exchange and reports in U.S. dollars.
- Suncor Energy Inc. (SU/TSX): Earnings per share of $1.26 (versus $1.07 predicted). Revenue of $14.14 billion (versus $12.69 billion predicted).
- Nutrien (NTR/TSX, NYSE): Earnings per share of USD$0.37 (versus $0.65 predicted). Revenue of USD$5.40 billion (versus $5.20 billion predicted).
- Loblaw (L/TSX): Earnings per share of $2.00 (versus $1.90 predicted). Revenue of $14.53 billion (versus $14.53 billion predicted).
Analysts usually point to anticipated forward guidance being the key in instances like this. So, because the future doesn’t look great for oil prices (recessions, supply increases, etc.) and Nutrien believes potash demand will increase going forward, the stock market is looking ahead and not simply reacting to last quarter’s news.
Nutrien shareholders definitely miss the days of sanctions crippling the supply of Russian potash to the market, despite the bump on Thursday. The fourth quarter price was USD$235 per tonne, compared to USD$526 per tonne a year earlier.
In more positive news, Nutrien’s CEO Ken Seitz said, “We do see potential for firming of potash prices,” and went on to add that Red Sea logistics issues were likely to continue to add to cost pressures for the foreseeable future.
Suncor announced that it had set a new oilsands production record at 757,400 barrels per day, however, profit margins were down on lower oil prices. The oil giant also announced it would be bringing in a familiar corporate face as its next board chair, as Russ Girling (former CEO of TC Energy Corp) would be taking over fromMichael Wilson.
Kyle Prevost
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