Q: Your thoughts on the latest earnings and market reaction?
Appreciate all your hard work. Ted
Appreciate all your hard work. Ted
5i Research Answer:
GEI lost 3c per share, vs estimates of +32c. Revenue of $2.35B missed estimates of $2.93B. EBITDA of $129M missed estimates by 15%. It was a pretty bad quarter. GEI tried to appease investors with a 5% dividend hike. At least two brokers downgraded the stock. The main issue was higher costs, with a restructuring and executive transition costs. Finance costs also rose. The Gateway Terminal is now contributing, at least. Distributable cash flow fell 3%. Based on the results, the stock drop is likely appropriate. Better earnings are expected this year but the company needs to execute. If costs continue to rise, many of its operational gains could still be offset. At 17X earnings, it is hard to get really excited about this one at this time.