Breaking News

Canadian Pacific (CP) Q2 Earnings Beat, Revenues Miss Mark

By Zacks Investment ResearchStock MarketsJul 17, 2019 03:42AM ET
Canadian Pacific (CP) Q2 Earnings Beat, Revenues Miss Mark
By Zacks Investment Research   |  Jul 17, 2019 03:42AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

Canadian Pacific Railway Limited (NYSE:CP) 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


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.


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. (NYSE:UNP) , Norfolk Southern Corp. (NYSE:NSC) and United Parcel Service (NYSE:UPS) . 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 >>

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

Union Pacific Corporation (UNP): Free Stock Analysis Report

Norfolk Southern Corporation (NSC): Free Stock Analysis Report

United Parcel Service, Inc. (UPS): Free Stock Analysis Report

Original post

Zacks Investment Research
Canadian Pacific (CP) Q2 Earnings Beat, Revenues Miss Mark
Canadian Pacific (CP) Q2 Earnings Beat, Revenues Miss Mark

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email