Canada Inc. reports cloudy outlook, stocks still surge

Bloomberg

After weeks of wondering how corporate Canada fared in the early days of the Covid-19 pandemic, investors finally got a proper look under the hood.
Senior executives spoke about the impact. Some described the future as too hard to predict. Others tried to identify parallels and differences with the financial crisis.
By withdrawing their 2020 forecasts, many Canadian companies have expressed their lack of confidence about when the economy will reopen and how consumers will behave when it does. Profit expectations have slumped to levels unseen in four years, according to data compiled by Bloomberg.
Even so, stocks continued to rally. The S&P/TSX Composite Index rose every day this week and has gone up seven weeks in a row, its longest winning streak in 14 months.
With more than 65% of companies in the index having reported quarterly results over the past three weeks, here’s a look at some of the numbers and the future state.
Air Canada was the single best performing company in the index for the decade that ended Dec. 31, 2019. Now it has one of the bleakest outlooks. The airline expects the impact of the virus to last for at least three years and predicted large job cuts as it hunkers down to survive “the darkest period ever” for the industry. Air Canada is down 65% this year.
It declined to give an update on its planned purchase of smaller rival Transat A.T. Inc. until its gets regulatory approval. But the market has a view: Transat shares ended the week at C$8.30, far below the C$18 takeover price.
One company’s sorrow is another’s hope. With fewer commercial airplanes carrying cargo and more consumers shopping online, Cargojet Inc. experienced a surge in volumes for all of its segments. First quarter adjusted Ebitda jumped about 25% to C$40.2 million ($28.9 million) and revenues went up 11% to C$123 million. Its shares are up 35% this year.