Reviewing Q1 2018 Earnings – Part 2

Comments on Earnings from Manga International, Sun Life, Spin Master and others.

Magna International 1Q18 EPS $1.84 vs. estimates of $1.70 (TSE: MG)

-“We had a strong start to the year, reporting record first quarter results and increasing our outlook for sales and earnings. We continue to position Magna for the emerging mobility ecosystem as demonstrated by the recently announced partnership with Lyft.” said CEO Don Walker.

-Revenue up 21% to $10.79 billion.

-Cash from operations up 26% to $577 million.

-$103 million in share repurchases.

-Dividend growth 5-year average: 21.3%.

-Magna International offers investors almost everything they could look for in a business. Strong top and bottom line growth combined with growing dividends and a history of share repurchases. Magna is investing in the electric automotive future and their partnership with Lyft looks interesting. The one hesitation for investors are the current NAFTA negotiations, as the agreement is critical to Magna’s supply chain. Following the earnings release, Magna increased their forecasts for sales and earnings for this year.

CCL Industries 1Q18 EPS $0.69 vs estimates of $0.67 (TSE: CCL.b)

-Revenue increased 15.6% to $1.22 billion.

-EPS of $0.69 were up 21% year-over-year.

-One of the best capital allocators on the TSX, CCL Industries recently increased their dividend 13% to $0.13 per share.

-Dividend growth 5-year average: 23.8%.

Sun Life Financial 1Q18 EPS $1.26 vs. estimates of $1.12 (TSE: SLF)

-“In the first quarter we delivered $770 million in underlying net income and a 15.1% ROE,” said Dean Connor, President and CEO.

-Sun Life increased their dividend 4% to $0.475 per share.

-Similarly to Manulife, Sun Life benefits from rising interest rates where they can invest their premiums and earn a higher return.

Spin Master 1Q18 EPS $0.22 vs. estimates of $0.15 (TSE: TOY)

-“Our results not only reflect our innovative products and brands resonating with consumers but they are also a testament to the team’s effort in effectively managing the business through the industry-wide disruption caused by the Toys”R”Us U.S. liquidation”, said Ronnen Harary, Chairman and Co-CEO.

-Revenue up 25.5% to $288 million.

-Management stated that the Toys R Us liquidation will impact second quarter sales, but as long-term investors, this shouldn’t impact an investment thesis, where the business continues to execute.

Savaria 1Q18 EPS $0.09 vs. estimates of $0.09 (TSE: SIS)

-“Our recent financing through a bought deal of $57 million combined with a new term loan of $50 million provides Savaria a total of $180 million of accessible cash for acquisitions and funding of organic growth.” said Marcel Bourassa, President and CEO.

-Revenue increases 78.7% to $56.6 million.

-Adjusted EBITDA up 51.5% to $7.9 million.

-Most recently they increased their dividend 38.5%.

-Savaria is a smaller company, with a market cap of approximately $700 million, which brings obvious risks as it’s not as established as blue-chip equities. Management restated revenue forecasts of $268 million, an increase of 48% from FY2017. A business that benefits from the aging population, these demographic shifts bring extremely long-term tailwinds, which makes Savaria an interesting company to watch. I started my position at $18 per share, and plan on adding in the near future if the current weakness persists.

You can view the rest of this week’s earnings and recent dividend increases at my Twitter account, @ReportEarnings
Disclosure

I hold a position in Magna International, Sun Life Financial, CCL Industries and Savaria Corp.

Please consult a financial advisor before making investment decisions.

This report represents my views, not actionable advice