Canadian Railroads > CP: a miss on earnings estimates

CP reported its earnings this morning. The results were described by one analyst as "good enough", although the results fell slightly short of what analysts had expected. Stock based compensation (credited to executive accounts for performance) rose substantially.

>>Net income rose 23 percent to C$400 million ($355 million), or C$2.31 a share, the Calgary-based company said today in a statement. That trailed the C$2.38 average of estimates in a Bloomberg survey of 26 analysts. Revenue increased 8.9 percent to C$1.67 billion, short of the C$1.69 billion average estimate.

Stock-based compensation and benefits jumped more than fourfold to C$42 million in the period, Canadian Pacific said. The shares had gained 38 percent this year, the best performance among members of the Canadian industrials sub-index. They were up 0.83 percent to C$223.50 at 9:55 a.m. in Toronto. <<

Bloomberg:

http://www.bloomberg.com/news/2014-10-21/cp-rail-misses-profit-estimates-as-stock-based-pay-rises.html

CP's release and slides:

http://www.cpr.ca/en/investors/earnings-releases

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"Analyst estimates" are educated guesses by stock analysts on what the company will report for earnings, sales, margins, operating ratio, etc. In some cases, companies will guide analysts into a range. In other cases, companies don't talk to analysts, don't give hints, don't take them on tours of the facilities, give them unique access to company information, etc.

This news should be good for an EHH tantrum!

Mike Bannon
St Catharines, ON

With the exception that the stock compensation and officer bonuses were up......

SR2 Wrote:
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> With the exception that the stock compensation and
> officer bonuses were up......

Yes

The stock shares nearly hit $200 this afternoon. Anybody who owned shares and kept the since the Fred Green era is sitting pretty about now.

I've always had a good feeling about having the boss's wealth invested in the company. Gives him an incentive to get MY stock price up.

The operating ratio also looks good, under 63%, I believe.

I will have to rate my purchase of SOO Line common stock in 1983 as a very fortunate pick. Of course, SOO was already mostly owned by CP and then absorbed in the 90's, and the SOO stock converted to CP at a favorable exchange rate, then the CP stock has done quite well too.

Norm

Norman Orfall
Helendale, CA
TIOGA PASS, a private railcar