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) Q3 Earnings Miss Estimates, Fall Y/Y
Read MoreHide Full Article
Canadian Pacific Railway Limited’s (CP - Free Report) third-quarter 2020 earnings (excluding 22 cents from non-recurring items) of $3.09 (C$4.12) per share missed the Zacks Consensus Estimate of $3.22. Quarterly earnings also declined year over year.
Quarterly revenues of $1,398.3 million (C$1,863 million) also lagged the Zacks Consensus Estimate of $1421.8 million. The top line decreased year over year due to drop in freight revenues amid coronavirus-related woes.
Freight revenues, contributing 97.7% to the top line, fell 5.7% on a year-over-year basis. The company’s freight segment consists of Grain (up 11.7%), Coal (down 29%), Potash (up 12.8%), Fertilizers and sulphur (down 1.5%), Forest products (up 9%), Energy, chemicals and plastics (down 16%), Metals, minerals and consumer products (down 24.4%), Automotive (up 8%), and Intermodal (down 5.9%). In the reported quarter, total freight revenues per revenue ton-miles (RTMs) were up 1% year over year. Also, total freight revenues per carload climbed 2% from the year-ago quarter’s reported figure.
Canadian Pacific Railway Limited Price, Consensus and EPS Surprise
Operating income declined 10.3% in the quarter under review. Operating expenses decreased 2.3% year over year. However, operating ratio (operating expenses as a percentage of revenues on an adjusted basis) deteriorated to 58.2% in the third quarter from 56.1% in the year-ago quarter. Notably, lower value of this key metric bodes well.
Liquidity
The Zacks Rank #3 (Hold) company exited the third quarter with cash and cash equivalents of C$183 million compared with C$133 million at the end of December 2019. Long-term debt amounted to C$8,945 million compared with C$8,158 million at the end of December 2019. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dividend Update
Canadian Pacific’s board approved a quarterly cash dividend of C$0.95 per share, payable to shareholders on Jan 25, 2021, of record as of Dec 31, 2020.
2020 Outlook Revised
With volumes gradually improving, Canadian Pacific anticipates revenue ton-miles to decline in low-single digit in 2020 compared to the year-ago period. Previously, the company expected the same to decrease in mid-single digit. Additionally, adjusted earnings per share are estimated to increase at least in mid-single digits from C$16.44 reported in 2019. The company maintains its expectation for 2020 capital expenditures at C$1.6 billion. Effective tax rate is estimated to be approximately 24.8% in the current year.
Sectorial Snapshot
Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.
Kansas City Southern , carrying a Zacks Rank #3, reported third-quarter 2020 earnings (excluding 5 cents from non-recurring items) of $1.96 per share, beating the Zacks Consensus Estimate of $1.88. Meanwhile, quarterly revenues of $659.6 million lagged the Zacks Consensus Estimate of $662.4 million.
JB Hunt Transport Services Inc (JBHT - Free Report) , carrying a Zacks Rank of 3, reported third-quarter 2020 earnings of $1.18 per share, falling short of the Zacks Consensus Estimate of $1.26. Total operating revenues of $2,472.5 million beat the consensus mark of $2,345.2 million.
United Airlines Holdings Inc (UAL - Free Report) , carrying a Zacks Rank of 3, incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share in the third quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $7.63. Moreover, operating revenues of $2,489 million lagged the Zacks Consensus Estimate of $2,570.1 million.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Canadian Pacific (CP) Q3 Earnings Miss Estimates, Fall Y/Y
Canadian Pacific Railway Limited’s (CP - Free Report) third-quarter 2020 earnings (excluding 22 cents from non-recurring items) of $3.09 (C$4.12) per share missed the Zacks Consensus Estimate of $3.22. Quarterly earnings also declined year over year.
Quarterly revenues of $1,398.3 million (C$1,863 million) also lagged the Zacks Consensus Estimate of $1421.8 million. The top line decreased year over year due to drop in freight revenues amid coronavirus-related woes.
Freight revenues, contributing 97.7% to the top line, fell 5.7% on a year-over-year basis. The company’s freight segment consists of Grain (up 11.7%), Coal (down 29%), Potash (up 12.8%), Fertilizers and sulphur (down 1.5%), Forest products (up 9%), Energy, chemicals and plastics (down 16%), Metals, minerals and consumer products (down 24.4%), Automotive (up 8%), and Intermodal (down 5.9%). In the reported quarter, total freight revenues per revenue ton-miles (RTMs) were up 1% year over year. Also, total freight revenues per carload climbed 2% from the year-ago quarter’s reported figure.
Canadian Pacific Railway Limited Price, Consensus and EPS Surprise
Canadian Pacific Railway Limited price-consensus-eps-surprise-chart | Canadian Pacific Railway Limited Quote
Operating income declined 10.3% in the quarter under review. Operating expenses decreased 2.3% year over year. However, operating ratio (operating expenses as a percentage of revenues on an adjusted basis) deteriorated to 58.2% in the third quarter from 56.1% in the year-ago quarter. Notably, lower value of this key metric bodes well.
Liquidity
The Zacks Rank #3 (Hold) company exited the third quarter with cash and cash equivalents of C$183 million compared with C$133 million at the end of December 2019. Long-term debt amounted to C$8,945 million compared with C$8,158 million at the end of December 2019. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dividend Update
Canadian Pacific’s board approved a quarterly cash dividend of C$0.95 per share, payable to shareholders on Jan 25, 2021, of record as of Dec 31, 2020.
2020 Outlook Revised
With volumes gradually improving, Canadian Pacific anticipates revenue ton-miles to decline in low-single digit in 2020 compared to the year-ago period. Previously, the company expected the same to decrease in mid-single digit. Additionally, adjusted earnings per share are estimated to increase at least in mid-single digits from C$16.44 reported in 2019. The company maintains its expectation for 2020 capital expenditures at C$1.6 billion. Effective tax rate is estimated to be approximately 24.8% in the current year.
Sectorial Snapshot
Let’s take a look at some of the other recently released earnings reports from companies within the Zacks Transportation sector.
Kansas City Southern , carrying a Zacks Rank #3, reported third-quarter 2020 earnings (excluding 5 cents from non-recurring items) of $1.96 per share, beating the Zacks Consensus Estimate of $1.88. Meanwhile, quarterly revenues of $659.6 million lagged the Zacks Consensus Estimate of $662.4 million.
JB Hunt Transport Services Inc (JBHT - Free Report) , carrying a Zacks Rank of 3, reported third-quarter 2020 earnings of $1.18 per share, falling short of the Zacks Consensus Estimate of $1.26. Total operating revenues of $2,472.5 million beat the consensus mark of $2,345.2 million.
United Airlines Holdings Inc (UAL - Free Report) , carrying a Zacks Rank of 3, incurred a loss (excluding $1.83 from non-recurring items) of $8.16 per share in the third quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $7.63. Moreover, operating revenues of $2,489 million lagged the Zacks Consensus Estimate of $2,570.1 million.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>