Canadian Pacific Kansas City Limited CP astounded investors by surpassing expectations, reporting fourth-quarter 2023 earnings (excluding 6 cents from non-recurring items) per share of 87 cents (C$1.10), which outperformed the Zacks Consensus Estimate of 83 cents by a significant margin. The bottom line also demonstrated robust growth, marking a 7.4% increase year over year. Quarterly revenues of $2.773 billion (C$3.776 billion) not only exceeded the Zacks Consensus Estimate of $2.712 billion but also exhibited an impressive 53% surge compared to the previous year.
The heartening performance was underscored by a significant rise in freight revenues, contributing 97.9% to the top line, which surged by 53.2% compared to the same period last year. An in-depth analysis of CP’s freight segment further revealed substantial growth across various categories, notably 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%).
Notably, the increase in total Freight revenues per revenue ton-miles by 9% year over year indicates a robust operational performance. Despite a marginal 6% decline in total Freight revenues per carload from a year ago, the overall growth trajectory remained strong.
From a financial standpoint, the reported operating income displayed remarkable growth, surging by 46%. However, total operating expenses also witnessed a substantial increase, rising by 58% year over year. Impressively, the operating ratio (operating expenses as a percentage of revenues) improved to 61.8% from 59.8% in the year-ago quarter, marking a substantial 200 basis points improvement.
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
As of the end of the fourth quarter, CP boasted cash and cash equivalents of C$0.464 billion compared with C$0.451 billion in the fourth quarter of 2022. Long-term debt amounted to C$19.35 billion, exhibiting an increase from C$18.141 billion at the end of the fourth quarter of 2022.
Looking ahead, the management is optimistic about the future, anticipating adjusted earnings for 2024 to grow at a double-digit rate from 2023 to reach $3.84 per share. However, the Zacks Consensus Estimate falls at a lower level, at $3.27 per share. The company also expects capital expenditures to reach $2.75 billion, reflecting its strong focus on strategic investments.
Despite these impressive figures, it is important to note that Canadian Pacific currently occupies a Zacks Rank #3 (Hold). Interested individuals can explore 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 reported fourth-quarter 2023 earnings of $1.47 per share, missing the Zacks Consensus Estimate of $1.74 and demonstrating a noticeable 23.4% decline year over year. On the other hand, Delta Air Lines DAL showcased fourth-quarter 2023 earnings (excluding $1.88 from non-recurring items) of $1.28 per share, comfortably surpassing the Zacks Consensus Estimate of $1.17 and indicating a 13.51% decline on a year-over-year basis.
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
Canadian Pacific Kansas City Limited (CP) : Free Stock Analysis Report
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