Canadian Pacific Railway Misses Where it Counts

Seth Jayson, The Motley Fool
Updated

Canadian Pacific Railway (TSX: CP) reported earnings on July 24. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended June 30 (Q2), Canadian Pacific Railway met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue increased. GAAP earnings per share expanded significantly.


Margins increased across the board.

Revenue details
 Canadian Pacific Railway chalked up revenue of $1.42 billion. The 19 analysts polled by S&P Capital IQ predicted revenue of $1.43 billion on the same basis. GAAP reported sales were 6.1% higher than the prior-year quarter's $1.34 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $1.36. The 28 earnings estimates compiled by S&P Capital IQ predicted $1.42 per share. GAAP EPS of $1.36 for Q2 were 131% higher than the prior-year quarter's $0.59 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 37.5%, 700 basis points better than the prior-year quarter. Operating margin was 28.1%, 750 basis points better than the prior-year quarter. Net margin was 16.8%, 930 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $1.53 billion. On the bottom line, the average EPS estimate is $1.72.

Next year's average estimate for revenue is $6.04 billion. The average EPS estimate is $6.09.

Investor sentiment
 The stock has a two-star rating (out of five) at Motley Fool CAPS, with 378 members out of 404 rating the stock outperform, and 26 members rating it underperform. Among 103 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 94 give Canadian Pacific Railway a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Canadian Pacific Railway is hold, with an average price target of $121.15.

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The article Canadian Pacific Railway Misses Where it Counts originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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