Back to top

Analyst Blog

Canadian Pacific Railway Limited (CP - Analyst Report) is set to release its second-quarter 2013 results before the opening bell on Jul 24, 2013.

In the last quarter, the company delivered a 2.54% earnings surprise. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Canadian National Railway remains focused on volume expansion, operational efficiency, pricing revision and network capability upgrade. We believe that these measures will aid the company in registering higher revenues in the coming quarters. With the Industrial and Automotive segments looking bright, we expect these to counterbalance the weak outlook for the coal business. The company also faces uncertainty in the global economy along with labor issues, commodity risks related to the purchase of diesel, competition from other Canadian and U.S. firms and currency fluctuations. We expect the company to perform at par with the broader market in the coming months.


Earnings Whispers

Our proven model does not conclusively show that Canadian National Railway is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Expected Surprise Prediction (ESP) (Read: Zacks Earnings ESP: A Better Method) and Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Negative Zacks ESP: This is because the Most Accurate estimate is $1.44 while the Zacks Consensus Estimate is higher at $1.48. This leads to an ESP of -2.70% for Canadian Pacific Railway.

Zacks Rank #3 (Hold): Canadian Pacific Railway’s Zacks Rank #3, decreases the predictive power of ESP.

We caution investors against the stock going into the earnings announcement, as a Zacks Earnings ESP of -2.70% combined with a Zacks Rank # 3 lowers the possibility of an earnings surprise.

Other Stocks to Consider


Here are some other companies to consider as our model shows they have the right combination of elements to post an earnings beat this quarter.


Expeditors International of Washington Inc. (EXPD - Analyst Report) has an Earnings ESP of +2.33% and carries a Zacks Rank #3 (Hold).


Kansas City Southern (KSU - Analyst Report) has an Earnings ESP of +1.79% and carries a Zacks Rank #3 (Hold).

Union Pacific Corporation (UNP - Analyst Report) has an Earnings ESP of +0.39% and carries a Zacks Rank #3 (Hold).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
GREEN PLAIN… GPRE 36.46 +3.79%
MATRIX SERV… MTRX 30.90 +2.93%
ENZO BIOCHE… ENZ 5.20 +2.77%
GENTIVA HEA… GTIV 15.82 +2.73%
VIPSHOP HOL… VIPS 191.34 +2.23%