Q3 Earnings Should be Strong cf Q2Sales changes aside, there are 3 factors that will boost net earnings by an amount close to $100 million.
First, the debt buyback at substantial discount to face value should show a gain of at least $35 million and perhaps as high as $50 million, depending on the total amount bought back. I use a 12 % discount on $300 million buyback.
Secondly, Q2 had a one time impairment charge on associate investment of $50.5 million.
Thirdly, because of debt buyback, financing charges should drop by about $8 million.
This adds up to at least $90 million in earnings gains relative to Q2.
Even with a 5 % decrease in sales relative to Q2, Media's net earnings for Q3 are going to be above
.20 per share.
This is nearly twice consensus estimates of
.11 per share, which for the most part, do not include these gains.