We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Canadian Pacific Kansas City (CP) Down 1.5% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Canadian Pacific Kansas City (CP - Free Report) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Canadian Pacific Kansas City due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Q2 Earnings Beat at CP
Canadian Pacific Kansas City Limited reported second-quarter 2024 earnings (excluding 6 cents from non-recurring items) of 77 cents per share beat the Zacks Consensus Estimate of 74 cents. The bottom line improved 24.2% on a year-over-year basis. Results were aided by strong operational efficiency.
Operating revenues of $2.63 billion marginally beat the Zacks Consensus Estimate of $2.60 billion. The top line improved by 11.4% on a year-over-year basis due to synergies and favorable operating and safety performance.
Freight revenues, accounting for 98.1% of the top line, increased 14% to $3.53 billion. The actual figure surpassed our estimate of $3.38 billion.CP’s Freight segment contains Grain (up 24%), Coal (up 7.8%), Potash (up 25%), Fertilizers and Sulphur (up 15.7%), Forest products (up 8.5%), Energy, chemicals and plastics (up 21%), Metals, minerals and consumer products (up 5.5%), Automotive (up 39.3%) and Intermodal (down 3.5%).
Other revenues decreased 4% to $69 million in the second quarter of 2024.
In the reported quarter, total Freight revenues per revenue ton miles increased 4% year over year. Total Freight revenues per carload increased 12% year over year.
On a reported basis, the operating income was up 34.2%. Total operating expenses surged 5% year over year, primarily due to escalated labor and fuel costs. The reported operating ratio (operating expenses as a percentage of revenues) deteriorated 550 basis points to 64.8% from 70.3% in the year-ago quarter due to high costs. A lower value of the metric is more desirable.
CP exited the second quarter with cash and cash equivalents of C$557 million compared with C$464 million in the fourth quarter of 2023. Long-term debt amounted to C$18.96 billion compared with C$19.35 billion at the end of the fourth quarter of 2023.
Outlook
Earnings per share (core adjusted combined) for the current year are expected to grow in double digits from the 2023 actuals. Management expects capital expenditures to be C$2.75 billion for full-year 2024. The company targets capital expenditures of approximately $2.6 billion to $2.8 billion per year across the combined network for the 2024–2028 period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.4% due to these changes.
VGM Scores
At this time, Canadian Pacific Kansas City has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Canadian Pacific Kansas City has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Canadian Pacific Kansas City is part of the Zacks Transportation - Rail industry. Over the past month, Norfolk Southern (NSC - Free Report) , a stock from the same industry, has gained 0.3%. The company reported its results for the quarter ended June 2024 more than a month ago.
Norfolk Southern reported revenues of $3.04 billion in the last reported quarter, representing a year-over-year change of +2.2%. EPS of $3.06 for the same period compares with $2.95 a year ago.
For the current quarter, Norfolk Southern is expected to post earnings of $3.10 per share, indicating a change of +17% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
Norfolk Southern has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Canadian Pacific Kansas City (CP) Down 1.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Canadian Pacific Kansas City (CP - Free Report) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Canadian Pacific Kansas City due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Q2 Earnings Beat at CP
Canadian Pacific Kansas City Limited reported second-quarter 2024 earnings (excluding 6 cents from non-recurring items) of 77 cents per share beat the Zacks Consensus Estimate of 74 cents. The bottom line improved 24.2% on a year-over-year basis. Results were aided by strong operational efficiency.
Operating revenues of $2.63 billion marginally beat the Zacks Consensus Estimate of $2.60 billion. The top line improved by 11.4% on a year-over-year basis due to synergies and favorable operating and safety performance.
Freight revenues, accounting for 98.1% of the top line, increased 14% to $3.53 billion. The actual figure surpassed our estimate of $3.38 billion.CP’s Freight segment contains Grain (up 24%), Coal (up 7.8%), Potash (up 25%), Fertilizers and Sulphur (up 15.7%), Forest products (up 8.5%), Energy, chemicals and plastics (up 21%), Metals, minerals and consumer products (up 5.5%), Automotive (up 39.3%) and Intermodal (down 3.5%).
Other revenues decreased 4% to $69 million in the second quarter of 2024.
In the reported quarter, total Freight revenues per revenue ton miles increased 4% year over year. Total Freight revenues per carload increased 12% year over year.
On a reported basis, the operating income was up 34.2%. Total operating expenses surged 5% year over year, primarily due to escalated labor and fuel costs. The reported operating ratio (operating expenses as a percentage of revenues) deteriorated 550 basis points to 64.8% from 70.3% in the year-ago quarter due to high costs. A lower value of the metric is more desirable.
CP exited the second quarter with cash and cash equivalents of C$557 million compared with C$464 million in the fourth quarter of 2023. Long-term debt amounted to C$18.96 billion compared with C$19.35 billion at the end of the fourth quarter of 2023.
Outlook
Earnings per share (core adjusted combined) for the current year are expected to grow in double digits from the 2023 actuals. Management expects capital expenditures to be C$2.75 billion for full-year 2024. The company targets capital expenditures of approximately $2.6 billion to $2.8 billion per year across the combined network for the 2024–2028 period.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -7.4% due to these changes.
VGM Scores
At this time, Canadian Pacific Kansas City has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Canadian Pacific Kansas City has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Canadian Pacific Kansas City is part of the Zacks Transportation - Rail industry. Over the past month, Norfolk Southern (NSC - Free Report) , a stock from the same industry, has gained 0.3%. The company reported its results for the quarter ended June 2024 more than a month ago.
Norfolk Southern reported revenues of $3.04 billion in the last reported quarter, representing a year-over-year change of +2.2%. EPS of $3.06 for the same period compares with $2.95 a year ago.
For the current quarter, Norfolk Southern is expected to post earnings of $3.10 per share, indicating a change of +17% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.2% over the last 30 days.
Norfolk Southern has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.