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.
Canadian Pacific (CP) Down on Q4 Earnings & Revenue Miss
Read MoreHide Full Article
Railroad operator, Canadian Pacific Railway Limited (CP - Free Report) reported lower-than-expected earnings and revenues in the fourth quarter of 2016. The company’s earnings (on an adjusted basis) of $2.28 per share (C$3.04) fell short of the Zacks Consensus Estimate of $2.37. However, the bottom line improved by 11.2% from the year-ago figure.
Quarterly revenues declined 3% year over year to approximately $1.23 billion (C$1.6 billion) and also missed the Zacks Consensus Estimate of $1.26 billion. Revenues were hurt by unfavorable weather on the West Coast and a delayed grain harvest. Carloads (volume) were flat year over year and revenue ton-miles fell 3%. The lackluster earnings report disappointed investors and as a result the stock declined in after-market trading on Jan 18.
Canadian Pacific Railway Ltd. Price, Consensus and EPS Surprise
Operating expenses decreased 9%. Operating ratio (operating expenses as a percentage of revenues on an adjusted basis) came in at 56.2% compared with the year-ago figure of 59.8%, as the company is looking to control costs. The company expects earnings per share to grow in high-single digits in 2017, led by an expected increase in volumes and cost control efforts.
Liquidity
Canadian Pacific exited 2016 with cash and cash equivalents of C$164 million compared with C$650 million at the end of 2015. Long-term debt totaled C$8,659 million compared with C$8,927 million at the end of 2015.
Dividend and Share Repurchase
Canadian Pacific had scrapped its plans to buy Norfolk Southern Corp. (NSC - Free Report) last year. Subsequently, Canadian Pacific raised its dividend by 43% to C$0.50 per share. The latest installment was declared last month. The amount will be paid on Jan 30 to the shareholders at the close of market on Dec 30, 2016. Further, the company rewards shareholders through buybacks.
Price Performance
Shares of Canadian Pacific have been laggards for quite some time, underperforming the Zacks-categorized Transportation-Rail industry over the last one year. Shares of Canadian Pacific have gained 39.41% in the last one year, while the industry has witnessed a growth of 47.18% in the same period.
The lackluster fourth-quarter results have dealt a further blow to the company.
CEO to Retire
Apart from announcing fourth-quarter results, Canadian Pacific announced a change at its helm. The incumbent chief executive officer, E. Hunter Harrison will be retiring on Jan 31 (he will be on vacation with immediate effect till that date) and Keith Creel has been named as Hunter’s replacement.
Upcoming Releases
Investors interested in the railroad space are keenly awaiting fourth-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corporation and Kansas City Southern in the coming days. Kansas City Southern is scheduled to report on Jan 20. Canadian National and Norfolk Southern are scheduled to report on Jan 24, and Jan 25, respectively.
Zacks Rank
Currently, Canadian Pacific carries a Zacks Rank #4 (Sell).
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Canadian Pacific (CP) Down on Q4 Earnings & Revenue Miss
Railroad operator, Canadian Pacific Railway Limited (CP - Free Report) reported lower-than-expected earnings and revenues in the fourth quarter of 2016. The company’s earnings (on an adjusted basis) of $2.28 per share (C$3.04) fell short of the Zacks Consensus Estimate of $2.37. However, the bottom line improved by 11.2% from the year-ago figure.
Quarterly revenues declined 3% year over year to approximately $1.23 billion (C$1.6 billion) and also missed the Zacks Consensus Estimate of $1.26 billion. Revenues were hurt by unfavorable weather on the West Coast and a delayed grain harvest. Carloads (volume) were flat year over year and revenue ton-miles fell 3%. The lackluster earnings report disappointed investors and as a result the stock declined in after-market trading on Jan 18.
Canadian Pacific Railway Ltd. Price, Consensus and EPS Surprise
Canadian Pacific Railway Ltd. Price, Consensus and EPS Surprise | Canadian Pacific Railway Ltd. Quote
Operating expenses decreased 9%. Operating ratio (operating expenses as a percentage of revenues on an adjusted basis) came in at 56.2% compared with the year-ago figure of 59.8%, as the company is looking to control costs. The company expects earnings per share to grow in high-single digits in 2017, led by an expected increase in volumes and cost control efforts.
Liquidity
Canadian Pacific exited 2016 with cash and cash equivalents of C$164 million compared with C$650 million at the end of 2015. Long-term debt totaled C$8,659 million compared with C$8,927 million at the end of 2015.
Dividend and Share Repurchase
Canadian Pacific had scrapped its plans to buy Norfolk Southern Corp. (NSC - Free Report) last year. Subsequently, Canadian Pacific raised its dividend by 43% to C$0.50 per share. The latest installment was declared last month. The amount will be paid on Jan 30 to the shareholders at the close of market on Dec 30, 2016. Further, the company rewards shareholders through buybacks.
Price Performance
Shares of Canadian Pacific have been laggards for quite some time, underperforming the Zacks-categorized Transportation-Rail industry over the last one year. Shares of Canadian Pacific have gained 39.41% in the last one year, while the industry has witnessed a growth of 47.18% in the same period.
The lackluster fourth-quarter results have dealt a further blow to the company.
CEO to Retire
Apart from announcing fourth-quarter results, Canadian Pacific announced a change at its helm. The incumbent chief executive officer, E. Hunter Harrison will be retiring on Jan 31 (he will be on vacation with immediate effect till that date) and Keith Creel has been named as Hunter’s replacement.
Upcoming Releases
Investors interested in the railroad space are keenly awaiting fourth-quarter earnings reports from key players like Canadian National Railway Company (CNI - Free Report) , Norfolk Southern Corporation and Kansas City Southern in the coming days. Kansas City Southern is scheduled to report on Jan 20. Canadian National and Norfolk Southern are scheduled to report on Jan 24, and Jan 25, respectively.
Zacks Rank
Currently, Canadian Pacific carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>