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Canadian National (CNI) Q4 Earnings: Is a Beat in Store?

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Rail and rail-related transportation business operator Canadian National Railway (CNI - Free Report) is scheduled to report fourth-quarter 2016 results on Jan 24, after the market closes.

Last quarter, the company posted a positive earnings surprise of 4.35%. Moreover, the company’s bottom line surpassed the Zacks Consensus Estimate in all of the past four quarters, with an average beat of 5.60%. Let’s see how things are shaping up for this announcement.

Factors at Play this Quarter

Canadian National is expected to gain from strong grain production along with improved coal volumes outlook since Donald Trump’s Presidential win. The company could see increased volumes in other segments like lumber, automotive and petroleum products.

However, the company’s top line continues to be affected by weather-related challenges. The company also faces competition from peers like Union Pacific Corp. (UNP - Free Report) and Canadian Pacific Railways (CP - Free Report) . Another concern for Canadian Pacific is the tough competition from trucking companies.

We note that the company’s stock has underperformed the broader Zacks categorized Transportation-Rail industry over the past three months. Shares of the company appreciated 6.05%, while the industry gained 9.41% over the same period.

Earnings Whispers

Our proven model shows that Canadian National is likely to beat earnings estimates this quarter because it has the perfect combination of two key ingredients.

Zacks ESP: The Most Accurate estimate stands at 94 cents, while the Zacks Consensus Estimate is pegged at 90 cents. Hence, the Earnings ESP is +4.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

 Zacks Rank: The company carries a Zacks Rank #3 (Hold). Please note that stocks with Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings estimates.

Conversely, we caution against stocks with a Zacks Rank #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

A Stock That Warrants a Look

Canadian Nationalis not the only company looking up this time around.  Here is another stock from the transportation sector that you may want to consider, as our model shows that it has the right combination for an earnings beat this quarter:

JetBlue Airways Corp. (JBLU - Free Report) , which is  scheduled to report fourth-quarter results on Jan 26, has a Zacks Rank #3 and an Earnings ESP of +2.08%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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