News

Canadian Pacific Kansas City Limited CP is scheduled to report first-quarter 2024 results on Apr 24 before market open.

The company has a disappointing earnings history, having surpassed the Zacks Consensus Estimate only twice in the preceding four quarters while underperforming in the other two quarters. The average miss is 3.46%.

Let’s see how things have shaped up for Canadian Pacific Kansas City this earnings season.

CP’s financial stability is challenged by high operating expenses and low liquidity. Elevated fuel costs exacerbate the strain on the company's bottom line, while insufficient cash reserves impede its ability to meet obligations.

Our estimate for first-quarter total operating expenses has increased 50.3% year over year. The Zacks Consensus Estimate for quarterly earnings is pegged at 70 cents per share, which implies an 11.11% increase from the first-quarter 2023 actuals.

CP’s high capital expenditures are also expected to hurt the bottom line in the to-be-reported quarter.

However, the Zacks Consensus Estimate for quarterly revenues is pegged at $2.59 billion, which calls for a 54.55% improvement from the first-quarter 2023 actuals. The gradual recovery in freight-market conditions is likely to have boosted the company’s March-quarter performance. Our first-quarter estimate for freight revenues has jumped 55% year over year.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for CP this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

Canadian Pacific Kansas City has an Earnings ESP of -1.20% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Canadian Pacific Kansas City Limited Price and EPS Surprise

Highlights of Q4

CP's fourth-quarter 2023 earnings (excluding 6 cents from non-recurring items) per share of 87 cents (C$1.10), which beat the Zacks Consensus Estimate of 83 cents. The bottom line increased 7.4% year over year. Quarterly revenues of $2.77 billion (C$3.78 billion) surpassed the Zacks Consensus Estimate of $2.71 billion and improved 53% year over year.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors might want to consider as our model shows that these have the right combination of elements to beat on their first-quarter 2024 earnings.

American Airlines AAL has an Earnings ESP of +6.51% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

AAL is scheduled to report first-quarter 2024 earnings on Apr 25. The Zacks Consensus Estimate for first-quarter earnings has declined 21.74% over the past 60 days. AAL has surpassed the Zacks Consensus Estimate in each of the preceding four quarters. The average beat is 119%.

Westinghouse Air Brake Technologies WAB has an Earnings ESP of +4.98% and a Zacks Rank #3. WAB is scheduled to report first-quarter 2024 earnings on Apr 24.

WAB has an impressive earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 6.63%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.