Earnings Preview for Canadian Pacific Railway

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On Wednesday, April 21, Canadian Pacific Railway CP will report its last quarter's earnings. Here is Benzinga's preview of the company's release.

Net Income, Earnings, And Earnings Per Share

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Wall Street analysts see Canadian Pacific Railway reporting earnings of $3.47 per share on sales of $1.59 billion. In the same quarter last year, Canadian Pacific Railway reported earnings per share of $3.3 on sales of $1.52 billion.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Wednesday, EPS would be up 5.15%. Sales would be up 4.33% on a year-over-year basis. Canadian Pacific Railway's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q4 2021 Q3 2020 Q2 2020 Q1 2020
EPS Estimate 3.94 3.23 2.77 4.03
EPS Actual 3.90 3.09 2.94 3.30
Revenue Estimate 1.63 B 1.41 B 1.29 B 1.96 B
Revenue Actual 1.55 B 1.40 B 1.29 B 1.52 B

Stock Performance

Over the last 52-week period, shares are up 61.06%. Given that these returns are generally positive, long-term shareholders can be content going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Canadian Pacific Railway is scheduled to hold the call at 16:30:00 ET and can be accessed here.

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