Canadian Pacific (CP) Q4 Earnings Beat Estimates, Increase Y/Y
Canadian Pacific Kansas City Limited CP reported 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 $2.773 billion (C$3.776 billion) surpassed the Zacks Consensus Estimate of $2.712 billion and improved 53% year over year.
Freight revenues, contributing 97.9% to the top line, rose 53.2% on a year-over-year basis. We suggested the metric to jump 47.8% from fourth-quarter 2022 actuals. CP’s freight segment contains Grain (up 29%), Coal (up 115%), Potash (up 15%), Forest products (up 99%), Energy, chemicals and plastics (up 87%), Metals, minerals and consumer products (up 97%), Automotive (up 147%), Fertilizers and Sulphur (up 24%) and Intermodal (up 15%).
In the reported quarter, total Freight revenues per revenue ton-miles gained 9% year over year. Total Freight revenues per carload declined 6% from a year ago. Our projection for a fall of 8.3% was higher than the reported value.
On a reported basis, operating income was up 46%. Total operating expenses increased 58% year over year. Operating ratio (operating expenses as a percentage of revenues) improved 200 basis points to 61.8% from 59.8% in the year-ago quarter.
Canadian Pacific Kansas City Limited Price, Consensus and EPS Surprise
Canadian Pacific Kansas City Limited price-consensus-eps-surprise-chart | Canadian Pacific Kansas City Limited Quote
CP exited the fourth quarter with cash and cash equivalents of C$0.464 billion compared with C$0.451 billion in fourth-quarter 2022. Long-term debt amounted to C$19.35 billion compared with C$18.141 billion at the end of fourth-quarter 2022.
Management expects adjusted earnings for 2024to grow double digits from 2023 to $3.84 per share. The Zacks Consensus Estimate is pegged at a lower level at $3.27 per share. Capital expenditures are expected to be $2.75 billion.
Currently, Canadian Pacific carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q4 Performance of Other Players
J.B. Hunt Transport Services, Inc.’s JBHT fourth-quarter 2023 earnings of $1.47 per share missed the Zacks Consensus Estimate of $1.74 and declined 23.4% year over year.
JBHT’s total operating revenues of $3.303 billion surpassed the Zacks Consensus Estimate of $3.24 million but fell 9.5% year over year. Total operating revenues, excluding fuel surcharge revenues, fell 6% year over year.
Delta Air Lines DAL reported fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share, which comfortably beat the Zacks Consensus Estimate of $1.17. Earnings, however, declined 13.51% on a year-over-year basis due to high labor costs.
Revenues of $14.223 billion surpassed the Zacks Consensus Estimate of $14.069 billion and increased 5.87% on a year-over-year basis, driven by strong holiday-air-travel demand. Adjusted operating revenues (excluding third-party refinery sales) came in at $13.661 billion, up 11% year over year.
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