Making sense of the markets this week: May 14, 2023 – MoneySense

Canadian pipeline profits continue to flow 

Enbridge, TC Energy and Keyera also reported earnings this week, and they were largely in line with what analysts had predicted; as a result, all three pipeline shares were up between 1% and 2% over the last five trading days.

Looking ahead, next quarter’s profits may not be quite so uplifting, as Alberta’s wildfires continue to have widespread human and economic consequences. Nearly 30,000 residents have been evacuated, and 109 fires have already affected energy production. This will clearly have an impact on companies’ bottom lines.

You can read more of my thoughts on Canadian pipeline stocks at MillionDollarJourney.com.

Algonquin Power leaves Kentucky, comes back to reality

Perhaps no single stock on the Toronto Stock Exchange has generated more surprise over the last year than Algonquin Power (AQN/TSX). Heading into 2022, the company was seen as a relatively stable combination of utility provider and renewable energy generator. Then, last November, interest rate realities finally hit, and all that debt-fuelled growth didn’t look quite so shiny.

This week, Algonquin announced solid earnings-per-share numbers of $0.17 (versus $0.16 predicted) and quarterly revenues of $778.6 million (versus $733.7 million predicted). Despite the slight outperformance relative to expectations, shares were down 2.68% on Thursday.

Algonquin’s share price history is a great example of how numbers can be manipulated to tell completely different stories. For example, I could tell you that the company was severely oversold and has had incredible momentum this year…

Or I could tell you that Algonquin shareholders are still suffering from having the wool pulled over their eyes, and management has a long way to go to get back to their previous trustworthy status.

The most important recent news for Algonquin is the breakup of the Kentucky Power acquisition. Algonquin’s president and CEO, Arun Banskota, addressed this transaction in the beginning of the earnings call, saying, “Last month, we announced with AEP a mutual termination of agreement to acquire Kentucky Power Company and AEP Kentucky Transmission Company. This was not an easy decision. However, our board of directors and management team decided that, given the challenging and continuously evolving macroeconomic environment and regulatory uncertainty over a final order, it was in the best interest of the company to terminate the transaction.”