Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

What's In Store For Canadian Pacific (CP) In Q3 Earnings?

Published 10/12/2017, 09:52 PM
Updated 07/09/2023, 06:31 AM

Canadian Pacific Railway Limited (NYSE:CP) is scheduled to report third-quarter 2017 results on Oct 17, after the market closes.

Last quarter, the company came up with better-than-expected earnings but lower-than-expected revenues. Earnings (on an adjusted basis) improved 29.6% from the year-ago figure, while revenues increased 8.5% year over year.

Let’s see how things shape up this earnings season.

Factors at Play

The back-to-back hurricanes (Harvey and Irma) have been a major dampener to railroad operations and Canadian Pacific was no exception. Rise in fuel costs from natural disasters have the potential to hurt the bottom line in the third quarter.

With the automotive sector accounting for a significant revenue volume, softness in the same might limit the bottom-line growth in the soon-to-be-reported quarter.

Additionally, decreased revenues in other key segments like Sulfur and Fertilizer and Forest Products might further hurt results in the quarter.

Also, Canadian Pacific is a highly leveraged company. The stock has seen the Zacks Consensus Estimate for current-quarter earnings being revised 2.9% downward over the last 60 days. This, in turn, reflects the negative sentiment surrounding the stock.

However, the company’s cost-controlling efforts are expected to aid results in the quarter. Plus, its attempts to reward investors through share buybacks and raised dividend payments are impressive.

Earnings Whispers

Our proven model does not conclusively show that Canadian Pacific CSX (NASDAQ:CSX) is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as elaborated below.

Zacks ESP: Canadian Pacific has an Earnings ESP of -0.98% as the Most Accurate estimate is pegged at $2.32 per share, marginally lower than the Zacks Consensus Estimate of $2.34. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Canadian Pacific currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, combined with the company’s negative ESP leaves surprise prediction inconclusive.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Investors interested in the broader Transportation sector may look into stocks worth considering like C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW) , Norfolk Southern Corporation (NYSE:NSC) and Union Pacific Corporation (NYSE:UNP) . For our model shows them to possess the right combination of elements to beat on earnings in their next releases.

C.H. Robinson has an Earnings ESP of +0.06% and a Zacks Rank #3. The company will report third-quarter 2017 results on Oct 31.

Norfolk Southern has an Earnings ESP of +0.87% with a solid Zacks Rank of 3. The company will report third-quarter 2017 results on Oct 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

Union Pacific has an Earnings ESP of +0.05%. This #3 Ranked company will release third-quarter 2017 earnings numbers on Oct 26.

4 Stocks to Watch after the Massive Equifax (NYSE:EFX) Hack

Cybersecurity stocks spiked on recent news of a data breach affecting 143 million Americans. But which stocks are the best buy candidates right now? And what does the future hold for the cybersecurity industry?

Equifax is just the most recent victim. Computer hacking and identity theft are more common than ever. Zacks has just released Cybersecurity! An Investor’s Guide to inform Zacks.com readers about this $170 billion/year space. More importantly, it highlights 4 cybersecurity picks with strong profit potential.

Get the new Investing Guide now>>



Union Pacific Corporation (UNP): Free Stock Analysis Report

Norfolk Souther Corporation (NSC): Free Stock Analysis Report

Canadian Pacific Railway Limited (CP): Free Stock Analysis Report

C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report

Original post

Zacks Investment Research

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.