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Canadian Pacific's Third-Quarter Earnings & Revenues Miss Estimates
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Canadian Pacific Kansas City’s (CP - Free Report) third-quarter 2024 earnings (excluding 7 cents from non-recurring items) of 73 cents per share marginally missed the Zacks Consensus Estimate of 74 cents. However, the bottom line improved 5.8% on a year-over-year basis. Results were aided by strong operational efficiency.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Operating revenues of $2.60 billion lagged the Zacks Consensus Estimate of $2.67 billion. However, the top line improved by 4.5% on a year-over-year basis due to synergies and robust operational and safety performances.
In the reported quarter, total freight revenues per revenue ton miles increased 1.5% year over year. Total Freight revenues per carload increased 9.6% year over year.
On a reported basis, the operating income was up 2.6%. Total operating expenses surged 8.3% year over year due to escalated labor costs. The reported operating ratio (operating expenses as a percentage of revenues) improved 120 basis points to 66.1% from 64.9% in the year-ago quarter. A lower value of the metric is more desirable.
Canadian Pacific Kansas City Limited Price, Consensus and EPS Surprise
Freight revenues, accounting for 97.5% of the top line, increased 6% to $3.46 billion. The actual figure missed our estimate of $3.51 billion. CP’s Freight segment contains Grain (up 11.3%), Coal (up 8.3%), Potash (up 8.3%), Energy, chemicals and plastics (up 10.7%), Metals, minerals and consumer products (down 2.6%), Automotive (up 25.2%) and Intermodal (down 4%). Meanwhile, Fertilizers and Sulphur and Forest products remained flat at $91 million and $198 million.
Other revenues increased 20.6% to $88 million in the third quarter of 2024.
CP’s Liquidity
CP exited the third quarter with cash and cash equivalents of C$463 million compared with C$464 million in the fourth quarter of 2023. Long-term debt amounted to C$18.71 billion compared with C$19.35 billion at the end of the fourth quarter of 2023.
CP’s Outlook
Canadian Pacific Kansas City now expects RTMs to increase in the mid-single digits from the 2023 actuals on a combined basis. CP continues to expect 2024 core adjusted combined diluted earnings per share to grow in double digits from the 2023 actuals to $3.84 per share.
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.
Delta Air Lines (DAL - Free Report) reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis due to high labor costs.
Revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year. This included the $380 million impact of the outage caused by CrowdStrike (CRWD - Free Report) .
Norfolk Southern Corporation’s (NSC - Free Report) third-quarter 2024 earnings (excluding $1.6 from non-recurring items) of $3.25 per share beat the Zacks Consensus Estimate of $3.10 and increased 22.6% year over year due to lower costs.
Railway operating revenues were $3.05 billion in the quarter under review, lagging the Zacks Consensus Estimate of $3.09 billion. The top line increased 2.7% year over year, with the Merchandise and Intermodal segments registering an improvement in revenues.
J.B. Hunt Transport Services’ (JBHT - Free Report) third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.
Total operating revenues of $3.07 billion surpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The operating income for the September quarter decreased 7% year over year to $224.1 million.
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Canadian Pacific's Third-Quarter Earnings & Revenues Miss Estimates
Canadian Pacific Kansas City’s (CP - Free Report) third-quarter 2024 earnings (excluding 7 cents from non-recurring items) of 73 cents per share marginally missed the Zacks Consensus Estimate of 74 cents. However, the bottom line improved 5.8% on a year-over-year basis. Results were aided by strong operational efficiency.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Operating revenues of $2.60 billion lagged the Zacks Consensus Estimate of $2.67 billion. However, the top line improved by 4.5% on a year-over-year basis due to synergies and robust operational and safety performances.
In the reported quarter, total freight revenues per revenue ton miles increased 1.5% year over year. Total Freight revenues per carload increased 9.6% year over year.
On a reported basis, the operating income was up 2.6%. Total operating expenses surged 8.3% year over year due to escalated labor costs. The reported operating ratio (operating expenses as a percentage of revenues) improved 120 basis points to 66.1% from 64.9% in the year-ago quarter. A lower value of the metric is more desirable.
Canadian Pacific Kansas City Limited Price, Consensus and EPS Surprise
Canadian Pacific Kansas City Limited price-consensus-eps-surprise-chart | Canadian Pacific Kansas City Limited Quote
CP’s Segmental Highlights
Freight revenues, accounting for 97.5% of the top line, increased 6% to $3.46 billion. The actual figure missed our estimate of $3.51 billion. CP’s Freight segment contains Grain (up 11.3%), Coal (up 8.3%), Potash (up 8.3%), Energy, chemicals and plastics (up 10.7%), Metals, minerals and consumer products (down 2.6%), Automotive (up 25.2%) and Intermodal (down 4%). Meanwhile, Fertilizers and Sulphur and Forest products remained flat at $91 million and $198 million.
Other revenues increased 20.6% to $88 million in the third quarter of 2024.
CP’s Liquidity
CP exited the third quarter with cash and cash equivalents of C$463 million compared with C$464 million in the fourth quarter of 2023. Long-term debt amounted to C$18.71 billion compared with C$19.35 billion at the end of the fourth quarter of 2023.
CP’s Outlook
Canadian Pacific Kansas City now expects RTMs to increase in the mid-single digits from the 2023 actuals on a combined basis. CP continues to expect 2024 core adjusted combined diluted earnings per share to grow in double digits from the 2023 actuals to $3.84 per share.
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.
Currently, Canadian Pacific KC carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performances of Other Transportation Companies
Delta Air Lines (DAL - Free Report) reported third-quarter 2024 earnings (excluding 47 cents from non-recurring items) of $1.50 per share, which fell short of the Zacks Consensus Estimate of $1.56. Earnings decreased 26.11% on a year-over-year basis due to high labor costs.
Revenues of $15.68 billion surpassed the Zacks Consensus Estimate of $15.37 billion and increased 1.2% on a year-over-year basis, driven by strong air travel demand. Adjusted operating revenues (excluding third-party refinery sales) totaled $14.59 billion, flat year over year. This included the $380 million impact of the outage caused by CrowdStrike (CRWD - Free Report) .
Norfolk Southern Corporation’s (NSC - Free Report) third-quarter 2024 earnings (excluding $1.6 from non-recurring items) of $3.25 per share beat the Zacks Consensus Estimate of $3.10 and increased 22.6% year over year due to lower costs.
Railway operating revenues were $3.05 billion in the quarter under review, lagging the Zacks Consensus Estimate of $3.09 billion. The top line increased 2.7% year over year, with the Merchandise and Intermodal segments registering an improvement in revenues.
J.B. Hunt Transport Services’ (JBHT - Free Report) third-quarter 2024 earnings of $1.49 per share outpaced the Zacks Consensus Estimate of $1.42 but declined 17.2% year over year.
Total operating revenues of $3.07 billion surpassed the Zacks Consensus Estimate of $3.04 billion but fell 3% year over year. The operating income for the September quarter decreased 7% year over year to $224.1 million.