Canadian National Gears Up to Report Q3 Earnings: What’s in Store?

Canadian National Railway CompanyCNI is scheduled to report third-quarter 2024 results on Oct. 22, after market close.

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CNI has a disappointing earnings surprise history, having lagged the Zacks Consensus Estimate in two of the preceding four quarters (surpassed the mark in the remaining two quarters), the average miss being 1.11%.

Let’s see how things have shaped up for Canadian National this earnings season.

CNI’s Q3 Expectations

The Zacks Consensus Estimate for Canadian National’s third-quarter 2024 revenues is pegged at $3.08 billion, indicating 3.5% growth year over year. The top line is likely to have benefited from higher volumes across the company’s Petroleum and chemicals; Grain and fertilizers; and intermodal segments.

On the flip side, a rise in operating expenses (due to higher labor and fringe benefits expense, loss on assets held for sale) and supply-chain disruptions are likely to have weighed on the company’s bottom line.Further, CNI’s liquidity position remains a concern.Notably, the Zacks Consensus Estimate for CNI’s third-quarter 2024 earnings has been revised downward by 14.4% in the past 90 days to $1.31 per share.

What Our Model Says for CNI

Our proven model does not conclusively predict an earnings beat for Canadian National this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

CNI has an Earnings ESP of -0.94% and a Zacks Rank #3.

Canadian National Railway Company Price and EPS Surprise

Canadian National Railway Company price-eps-surprise | Canadian National Railway Company Quote

Highlights of CNI’s Q2

Canadian National reported second-quarter 2024 earnings (excluding 7 cents from non-recurring items) of $1.35 per share (C$1.84), which missed the Zacks Consensus Estimate of $1.41. However, the bottom line improved 3.05% year over year.

Revenues in the second quarter of 2024 were $3.16 billion (C$4.33 billion), which lagged the Zacks Consensus Estimate of $3.23 billion. However, this reflects an increase of 4.75% year over year, driven by higher volumes.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors may consider, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

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Southwest Airlines LUV has an Earnings ESP of +68.16% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

LUV is set to release third-quarter results on Oct. 24. Upbeat air-travel demand is likely to have aided the quarterly performance.

The Zacks Consensus Estimate for third-quarter 2024 earnings has moved north 116.7% in the past 60 days to 4 cents per share. LUV’s earnings surpassed the Zacks Consensus Estimate in two of the preceding four quarters, missed once and met in the other, delivering an average surprise of 61.6%.

C.H. Robinson CHRW has an Earnings ESP of +5.14% and a Zacks Rank #3 at present. CHRW is scheduled to report third-quarter 2024 earnings on Oct. 30. Low operating costs are expected to have aided CHRW’s performance in the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter earnings has been revised 1.9% upward in the past 60 days. CHRW’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters and missed once, the average beat being 7.3%.

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