-
Canadian Utilities Limited Class A Non-Voting Shares (CU)
-
Methanex Corporation (MX)
-
FirstService Corporation (FSV)
We have comments posted on the earnings from FSV and MX.
CU reported EPS of $0.3015 missing estimates of $0.4488 and revenues of $879M missing estimates of $896.76M. Its adjusted earnings of $100M were much lower than $136M in the prior year. The impact of its Alberta distribution utilities rebasing resulted in lower year-over-year earnings, which on its own, the rebasing contributed to a year-over-year decline in earnings of ~$25M. The company expects the earnings pressure associated with this rebasing to peak in Q3, and in Q4 it expects seasonality benefits to create opportunities for year-over-year growth. The company sees opportunity for growth in connection with the energy transition, including opportunities within ATCO Energy Sytstems and ATCO EnPower.
CU pays a nice yield of 5.4%, but these were not excellent results, and the stock price is reflecting some of this weakness in results. It is at an OK valuation, but we would prefer to wait for future quarters before adding to this name.