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Canadian Pacific's (CP) Q1 Earnings & Revenues Decline Y/Y

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Canadian Pacific Railway Limited’s (CP - Free Report) first-quarter 2022 earnings of 50 cents (C$0.63) per share missed the Zacks Consensus Estimate by 7 cents. The bottom line dipped 29.6% year over year. Results were hurt by lower freight revenues.

Total quarterly revenues of $1,451.1 million (C$1,838 million) underperformed the Zacks Consensus Estimate of $1,538.7 million. Lower freight revenues (down 6% year over year), mainly due to weakness in the Grain sub-group, resulted in the overall top line declining 6.2% year over year. This was because freight revenues accounted for bulk (97.7%) of the top line.

CP’s freight segment consists of Grain (down 20%), Coal (down15%), Potash (up 3%), Forest products (up 8%), Energy, chemicals and plastics (down 20%), Metals, minerals and consumer products (up 14%), Automotive (down 16%) as well as Intermodal (up 13%). Revenues at the Fertilizers and Sulphur sub-segment were flat year over year. In the reported quarter, total freight revenues per revenue ton-miles (RTMs) rose 13% year over year. Total freight revenues per carload increased 3% from the year-ago quarter’s reported figure. Total carloads declined 10%, mainly due to the 28% plunge in Grain carloads.

On a reported basis, operating income dropped 31.4% while total operating expenses increased 10.5% year over year in the quarter under review, mainly due to the 32.5% upsurge in fuel costs. Adjusted operating income decreased 31.7%.  The operating ratio (operating expenses as a percentage of revenues on an adjusted basis) deteriorated to 69.8% in the first quarter from 58.5% in the year-ago quarter. Lower the value of the metric, the better. Lower revenues and escalated expenses caused this dismal reading for the key metric.

Liquidity

Canadian Pacific, presently carrying a Zacks Rank #3 (Hold), exited the March quarter with cash and cash equivalents of C$85 million compared with C$69 million at the end of 2021. Long-term debt amounted to C$17,917 million compared with C$18,577 million at the end of 2021.

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 dividend of C$0.19 per share, payable Jul 25 to its shareholders of record as of Jun 24.

Other Railroad Results

Below we present briefly the first-quarter 2021 results of other key players in the Zacks Transportation - Rail industry.

Union Pacific Corporation’s (UNP - Free Report) first-quarter 2022 earnings of $2.57 per share surpassed the Zacks Consensus Estimate of $2.55. Moreover, the bottom line increased 28.5% on a year-over-year basis. Operating revenues of $5,860 million also beat the Zacks Consensus Estimate of $5,810 million. The top line climbed 17.2% on a year-over-year basis owing to an uptick in freight revenues (up 17% to $5,440 million). Freight revenues were boosted by a positive business mix, higher fuel surcharge revenues, volume growth and pricing gains. 

Norfolk Southern Corporation’s (NSC - Free Report) first-quarter 2022 earnings of $2.93 per share surpassed the Zacks Consensus Estimate of $2.91. Moreover, the bottom line improved 10.2% year over year despite network challenges.

Railway operating revenues in the quarter under review came in at $2,915 million, outperforming the Zacks Consensus Estimate of $2,819.3 million. The top line increased 10.5% year over year, with all key segments — merchandise, intermodal and coal — registering improved revenues. Revenue per unit rose 16% year over year. Total volumes declined 5% year over year due to network issues.

Canadian National Railway Company’s (CNI - Free Report) first-quarter 2022 earnings (excluding a penny from non-recurring items) of $1.04 per share (C$1.32) missed the Zacks Consensus Estimate of $1.08. Results were hurt by supply-chain disruptions and severe winter weather conditions. However, the bottom line improved 7.2% year over year.

Quarterly revenues of $2,927.4 million (C$3,708 million) outperformed the Zacks Consensus Estimate of $2,898.6 million and increased 4.9% year over year.