Canadian Pacific Kansas City Limited (CP Quick QuoteCP - Free Report) is scheduled to report third-quarter 2024 results on Oct. 23, after market close.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

CP has an encouraging earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missing once. The average beat is 2.2%.

Canadian Pacific Kansas City Limited Price and EPS Surprise

Canadian Pacific Kansas City Limited price-eps-surprise | Canadian Pacific Kansas City Limited Quote

Given this backdrop, let’s examine the factors that might have influenced CP’s performance in the quarter to be reported.

High fuel costs are expected to have hurt the company’s bottom-line performance in the quarter to be reported. We expect the average fuel price per gallon to increase 21.7% year over year to $4.15 per gallon in the September-end quarter.

On the contrary, Canadian Pacific's proactive cost-cutting initiatives are commendable, and increased operational efficiency is expected to be reflected in third-quarter 2024 bottom-line results.

The Zacks Consensus Estimate for CP’s third-quarter earnings has been revised upward by 7.3% in the past 90 days to 74 cents per share. Meanwhile, the Zacks Consensus Estimate for revenues is pegged at $2.7 billion, which indicates a rise of 6.8% compared with the third-quarter 2023 actuals.

The improving freight demand scenario is likely to have benefited top-line performance in the to-be-reported quarter. Our estimate for freight revenues is pegged at $3.5 billion, which indicates a rise of 7.6% compared with the third-quarter 2023 actuals. Meanwhile, estimates for total revenues are pegged at $3.6 billion, which implies a 7% increase from the third-quarter 2023 reported figure.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Canadian Pacific Kansas City this time. 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, which is not the case here.

CP has an Earnings ESP of -0.41% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Highlights of Q2

Canadian Pacific Kansas City reported second-quarter 2024 earnings (excluding 6 cents from non-recurring items) of 77 cents per share, which beat the Zacks Consensus Estimate of 74 cents. The bottom line improved 24.2% on a year-over-year basis. Results were aided by strong operational efficiency.

Operating revenues of $2.63 billion marginally beat the Zacks Consensus Estimate of $2.60 billion. The top line improved 11.4% on a year-over-year basis due to synergies and favorable operating and safety performance.

Stocks to Consider

Here are a few stocks from the broader Zacks Transportation sector that investors might want to consider as our model shows that these have the right combination of elements to beat third-quarter 2024 earnings.

JetBlue Airways (JBLU Quick QuoteJBLU - Free Report) has an Earnings ESP of +18.66% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to report third-quarter 2024 earnings on Oct. 29, before market open.

JBLU surpassed the Zacks Consensus Estimate in three of the preceding four quarters and missed once. The average beat is 42%.

Allegiant Travel Company (ALGT Quick QuoteALGT - Free Report) has an Earnings ESP of +8.23% and carries a Zacks Rank #2 at present.  ALGT is scheduled to report third-quarter 2024 earnings on Oct. 30.

ALGT has an encouraging earnings surprise history, having surpassed the Zacks Consensus Estimate in three of the preceding four quarters and missing once, the average beat is 52%.