Domtar Corporation (NYSE:UFS) is scheduled to report Q3 earnings results before markets open for trading on November 6, 2020.
The company is expected to report earnings of -$0.26/share on revenue of $1.088 billion. The consensus earnings per share (EPS) of -$0.26/share is based on a poll of 10 analysts and represents a decline in eps of −128.7% over the same quarter last year, when the company reported earnings of $0.89/share.
The revenue forecast of $1.088 billion based on a poll of 6 analysts implies a year-over-year (YoY) decline in revenue of −15.2%. Last year the company reported $1.283 billion in revenue for the quarter.
|Metric||Expected||Prior Year||YoY Change|
Earnings Call Trends
Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.
What are your expectations from Domtar Corporation for earnings this quarter? Let us know in the comments!
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 26.7%.
|Report Date||Price Day Prior||Price Next Day||Change %||Result|
|August 7, 2020||$22.47||$28.48||26.7%||Increase|
|May 8, 2020||$22.05||$23.66||7.3%||Increase|
|February 7, 2020||$36.31||$33.83||−6.8%||Decline|
|October 25, 2019||$35.91||$37.90||5.5%||Increase|
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.91, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.91 implies a 0.2% chance of earnings manipulation.
Fundamentals And Technical Analysis
Domtar Corporation is currently trading at $23.88/share, down −0.1% for the day. The company is trading at approximately 59.6% of its 52-week high of $40.05/share. The company’s stock price is down −16.2% since the last earnings report and down −11.7% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 32.06 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 131.80 and a forward P/E multiple of 43.97.
Domtar Corporation’s current share price also implies a price-to-book (P/B) multiple of 0.58. The following table summarizes some other key fundamental ratios:
|Last Reported Fiscal Period Key||FY2020.Q2|
|Period End Date||June 30, 2020|
|Stock Price (Current)||$23.88|
|P/E Ratio (Fwd)||44.0x|
|Total Debt / Total Capital||47.5%|
|Levered Free Cash Flow||$167 million|
|EV / EBITDA||6.3x|
Domtar Corporation is a small-cap stock with a market capitalization of $1.318 billion and a total enterprise value of $2.386 billion. The company operates in the Materials sector and the Paper & Forest Products industry.
Domtar Corporation designs, manufactures, markets, and distributes communication papers, specialty and packaging papers, and absorbent hygiene products in the United States, Canada, Europe, Asia, and internationally. It operates through two segments, Pulp and Paper, and Personal Care. The company provides business papers, including copy and electronic imaging papers used in inkjet and laser printers, photocopiers, and plain-paper fax machines, as well as computer papers, preprinted forms, and digital papers for office and home use. It also offers commercial printing and publishing papers, such as offset papers and opaques used in sheet and roll fed offset presses; publishing papers, which include tradebook and lightweight uncoated papers for publishing textbooks, dictionaries, catalogs, magazines, hard cover novels, and financial documents; and base papers for envelopes, tablets, business forms, and data processing/computer forms. In addition, the company provides papers for thermal printing, flexible packaging, food packaging, medical packaging, medical gowns and drapes, sandpaper backing, carbonless printing, labels and other coating, and laminating applications; and papers for industrial and specialty applications, such as carrier papers, treated papers, security papers, and specialized printing and converting applications. Further, it designs, manufactures, markets, and distributes absorbent hygiene products, including adult incontinence and infant diaper products under the Attends, IncoPack, Indasec, Reassure, Chelino, and Comfees brand names. Additionally, the company offers branded and private label briefs, bladder control pads, protective underwear, underpads, and washcloths, as well as baby diapers, change mats, youth pants, and training pants for healthcare, retail, and direct-to-consumer channels. It serves merchants, retail outlets, stationers, printers, publishers, converters, and end-users. Domtar Corporation was founded in 1848 and is based in Fort Mill, South Carolina.