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) Q2 Earnings Beat, Revenues Miss Mark
Read MoreHide Full Article
Canadian Pacific Railway Limited (CP - Free Report) reported better-than-expected earnings but lower-than-expected revenues in the second quarter of 2019.
The company’s earnings (excluding 65 cents from non-recurring items) of $3.21 per share (C$5.17) surpassed the Zacks Consensus Estimate of $3.19. Moreover, quarterly earnings increased more than 30% year over year. The bottom line was aided by the company’s prudent cost management, courtesy of the precision scheduled railroading model.
Quarterly revenues of $1,478 million (C$1.98 billion), however, fell short of the Zacks Consensus Estimate of $1,502.8 million. However, the top line expanded year over year. Impressive freight revenues led to the year over year top line improvement.
Freight revenues rose 13% year over year and contributed 97.7% to the top line. Notably, the company’s freight segment consists of Grain (up 13%), Coal (up 5%), Potash (up 17%), Fertilizers and sulfur (up 15%), Forest products (up 13%), Energy, chemicals and plastics (up 24%), Metals, minerals and consumer products (flat), Automotive (up 14%) and Intermodal (up 12%). In the reported quarter, total freight revenues per revenue ton-miles (RTMs) were up 7% year over year. Also, total freight revenues per car load increased 7% from the year-ago quarter’s figure.
Operating income increased 31% in the quarter under review. Operating expenses increased marginally year over year. Operating ratio (operating expenses as a percentage of revenues on an adjusted basis) improved to 58.4% from 64.2% in the prior-year quarter driven by this railroad operator’s efforts to control costs. Notably, lower the value of this key metric bodes well. Capital spending was C$683 million in the reported quarter.
Canadian Pacific Railway Limited Price, Consensus and EPS Surprise
This Zacks Rank #2 (Buy) company exited the second quarter with cash and cash equivalents of C$45 million compared with C$61 million at the end of 2018. Long-term debt amounted to C$8,266 million compared with C$8,190 million in December 2018. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
For full-year 2019, Canadian Pacific expects revenue ton mile (RTM) to increase between 4% and 5%. Moreover, earnings per share in the third and fourth quarters of 2019 are expected to increase in double digits. Capital expenditures are still projected around C$1.6 billion for the current year.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting second-quarter 2019 earnings reports from key players like Union Pacific Corp. (UNP - Free Report) , Norfolk Southern Corp. (NSC - Free Report) and United Parcel Service (UPS - Free Report) . While Union Pacific will report second-quarter earnings on Jul 18, Norfolk Southern and UPS will announce the same on Jul 24.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year. See their latest picks free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Canadian Pacific (CP) Q2 Earnings Beat, Revenues Miss Mark
Canadian Pacific Railway Limited (CP - Free Report) reported better-than-expected earnings but lower-than-expected revenues in the second quarter of 2019.
The company’s earnings (excluding 65 cents from non-recurring items) of $3.21 per share (C$5.17) surpassed the Zacks Consensus Estimate of $3.19. Moreover, quarterly earnings increased more than 30% year over year. The bottom line was aided by the company’s prudent cost management, courtesy of the precision scheduled railroading model.
Quarterly revenues of $1,478 million (C$1.98 billion), however, fell short of the Zacks Consensus Estimate of $1,502.8 million. However, the top line expanded year over year. Impressive freight revenues led to the year over year top line improvement.
Freight revenues rose 13% year over year and contributed 97.7% to the top line. Notably, the company’s freight segment consists of Grain (up 13%), Coal (up 5%), Potash (up 17%), Fertilizers and sulfur (up 15%), Forest products (up 13%), Energy, chemicals and plastics (up 24%), Metals, minerals and consumer products (flat), Automotive (up 14%) and Intermodal (up 12%). In the reported quarter, total freight revenues per revenue ton-miles (RTMs) were up 7% year over year. Also, total freight revenues per car load increased 7% from the year-ago quarter’s figure.
Operating income increased 31% in the quarter under review. Operating expenses increased marginally year over year. Operating ratio (operating expenses as a percentage of revenues on an adjusted basis) improved to 58.4% from 64.2% in the prior-year quarter driven by this railroad operator’s efforts to control costs. Notably, lower the value of this key metric bodes well. Capital spending was C$683 million in the reported quarter.
Canadian Pacific Railway Limited Price, Consensus and EPS Surprise
Canadian Pacific Railway Limited price-consensus-eps-surprise-chart | Canadian Pacific Railway Limited Quote
Liquidity
This Zacks Rank #2 (Buy) company exited the second quarter with cash and cash equivalents of C$45 million compared with C$61 million at the end of 2018. Long-term debt amounted to C$8,266 million compared with C$8,190 million in December 2018. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook
For full-year 2019, Canadian Pacific expects revenue ton mile (RTM) to increase between 4% and 5%. Moreover, earnings per share in the third and fourth quarters of 2019 are expected to increase in double digits. Capital expenditures are still projected around C$1.6 billion for the current year.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting second-quarter 2019 earnings reports from key players like Union Pacific Corp. (UNP - Free Report) , Norfolk Southern Corp. (NSC - Free Report) and United Parcel Service (UPS - Free Report) . While Union Pacific will report second-quarter earnings on Jul 18, Norfolk Southern and UPS will announce the same on Jul 24.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>