Earnings Season: Four Hits and Misses

Earnings season is underway and with markets remaining turbulent, investors are watching earnings results even closer for hits and misses. Using StarMine’s SmartEstimate, which is based on the most recent forecasts from the most accurate analysts, we are able to highlight some of the names whose results are expected to meet or beat consensus estimates, and those who may yield negative earnings surprises.

Miner Teck Cominco Ltd. (TCK) is expected to produce earnings per share [EPS] of C$0.84 in the first quarter of fiscal 2008, according to Starmine’s consensus estimate. But its SmartEstimate is C$0.91 per share, which produces a predicted surprise of 8.7%.

Credit Suisse analyst Ralph Profiti, who has a four-star ranking at StarMine, also has an estimate of C$0.91. UBS analyst Brian MacArthur (4-star) has an estimate of C$0.86, and recently adjusted his model to account for higher coking coal prices.

Next up is Nuvista Energy Ltd. [NVA/TSX] with a consensus estimate of C$0.64 per share. The SmartEstimate is C$0.67, which produces a predicted surprise of 4.1%.

BMO Capital Markets analyst Mark Leggett (4-star) has an estimate of C$0.65, and considers Nuvista in a good position to capitalize on higher prices for natural gas.

PotashCorp of Saskatchewan (POT) is expected to earn $1.47 per share with a SmartEstimate of $1.51, yielding a predicted surprise of 2.5%. Home Capital Group Inc. rounds off the list of expected upside surprises with a consensus EPS estimate of C$0.70, and SmartEstimate of C$0.71, which produces a predicted surprise of 2.1%.

Vancouver-based drugmaker Cardiome Pharma Corp. (CRME) has a whopping predicted surprise of negative 88.1%, due to a consensus estimate of C$0.20 per share, and a SmartEstimate of C$0.38.

RBC Capital Markets analyst Philippa Flint (5-star) has an EPS estimate of C$-0.41, and recently lowered her revenue forecast for Cardiome’s Vernakalant drug. Stefan Quenneville (4-stars) of Macquarie Research has an estimate of C$0-0.33.

With a consensus estimate of C$-0.16 per share, and a SmartEstimate of C$-0.18, Fraser Papers Inc.’s predicted surprise is negative 18.2%. BMO’s Stephen Atkinson (5-star) has an estimate of C$-0.27, and rates the stock “underperform.”

Evertz Technologies Ltd. (EVTZ.PK) is expected to earn C$0.25 per share with a SmartEstimate of C$0.23, yielding a predicted surprise of negative 7.2%.

Canadian National Railway Co. (CNI) completes the list of expected negative surprises with a consensus EPS estimate of C$0.63, and a SmartEstimate of C$0.59, which produces a predicted surprise of negative 6.4%. BMO’s Randy Cousins (4-star), who has a C$0.60 estimate, cited high fuel costs and lower volumes as reasons behind his estimates.