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The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark in one), the average beat being 6.7%.
Let's delve deeper to unearth the factors that are likely to have influenced CNI’s fourth-quarter 2022 performance.
We expect upbeat freight demand and favorable pricing to have boosted Canadian National’s performance in the to-be-reported quarter. Owing to the strong freight conditions, revenues at the Petroleum and Chemicals, Metals and Minerals, Coal, Intermodal and Automotive segments are likely to have impressive. This in turn is expected to have boosted the railroad operator’s top line in the fourth quarter.
Fuel surcharge revenues are also likely to have been high and may have driven the top line. Owing to favorable revenues, operating ratio (operating expenses as a percentage of total revenues) is likely to have improved on a year-over-year basis in the December quarter. On the flip side, the bottom-line growth is likely to have been restricted due to elevated operating expenses, driven by high fuel price.
What Our Model Says
Our proven model predicts an earnings beat for CNI this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Canadian National has an Earnings ESP of +0.51% (the Most Accurate Estimate and the Zacks Consensus Estimate are presently pegged at $1.57 and $1.56 per share, respectively) and a Zacks Rank #3.
Highlights of Q3
Third-quarter 2022 earnings of $1.63 per share (C$2.13) outpaced the Zacks Consensus Estimate of $1.51 per share and improved 34.7% year over year. Quarterly revenues of $3,459.8 million (C$4,513 million) outperformed the Zacks Consensus Estimate of $3,214.2 million and increased 21.3% year over year. The uptick was driven by higher fuel surcharge revenues backed by higher fuel prices, freight rate increases, higher Canadian export volumes of coal via west coast ports, higher volumes of U.S. grain and the positive translation impact of a weaker Canadian dollar.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider as well, since our model shows that these too have the right combination of elements to beat on their fourth-quarter 2022 earnings.
JetBlue Airways (JBLU - Free Report) has an Earnings ESP of +9.81% and a Zacks Rank #3. JBLU will release results on Jan 26.
We expect upbeat air-travel demand to have aided JBLU’s fourth-quarter performance. However, high costs may have been a dampener.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +0.55% and a Zacks Rank #3. NSC will release results on Jan 25.
We expect the upbeat demand scenario to have aided NSC’s fourth-quarter performance. However, high fuel costs may have been a dampener.
Image: Bigstock
Is a Beat in Store for Canadian National (CNI) in Q4 Earnings?
Canadian National Railway Company (CNI - Free Report) is scheduled to report fourth-quarter 2022 results on Jan 24, after market close.
The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters (missing the mark in one), the average beat being 6.7%.
Let's delve deeper to unearth the factors that are likely to have influenced CNI’s fourth-quarter 2022 performance.
We expect upbeat freight demand and favorable pricing to have boosted Canadian National’s performance in the to-be-reported quarter. Owing to the strong freight conditions, revenues at the Petroleum and Chemicals, Metals and Minerals, Coal, Intermodal and Automotive segments are likely to have impressive. This in turn is expected to have boosted the railroad operator’s top line in the fourth quarter.
Fuel surcharge revenues are also likely to have been high and may have driven the top line. Owing to favorable revenues, operating ratio (operating expenses as a percentage of total revenues) is likely to have improved on a year-over-year basis in the December quarter. On the flip side, the bottom-line growth is likely to have been restricted due to elevated operating expenses, driven by high fuel price.
What Our Model Says
Our proven model predicts an earnings beat for CNI this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Canadian National has an Earnings ESP of +0.51% (the Most Accurate Estimate and the Zacks Consensus Estimate are presently pegged at $1.57 and $1.56 per share, respectively) and a Zacks Rank #3.
Highlights of Q3
Third-quarter 2022 earnings of $1.63 per share (C$2.13) outpaced the Zacks Consensus Estimate of $1.51 per share and improved 34.7% year over year. Quarterly revenues of $3,459.8 million (C$4,513 million) outperformed the Zacks Consensus Estimate of $3,214.2 million and increased 21.3% year over year. The uptick was driven by higher fuel surcharge revenues backed by higher fuel prices, freight rate increases, higher Canadian export volumes of coal via west coast ports, higher volumes of U.S. grain and the positive translation impact of a weaker Canadian dollar.
Other Stocks to Consider
Here are a few other stocks from the broader Zacks Transportation sector that investors may consider as well, since our model shows that these too have the right combination of elements to beat on their fourth-quarter 2022 earnings.
JetBlue Airways (JBLU - Free Report) has an Earnings ESP of +9.81% and a Zacks Rank #3. JBLU will release results on Jan 26.
We expect upbeat air-travel demand to have aided JBLU’s fourth-quarter performance. However, high costs may have been a dampener.
Norfolk Southern Corporation (NSC - Free Report) has an Earnings ESP of +0.55% and a Zacks Rank #3. NSC will release results on Jan 25.
We expect the upbeat demand scenario to have aided NSC’s fourth-quarter performance. However, high fuel costs may have been a dampener.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.