Canadian National Railway Company
) is slated to report its second-quarter 2014 financial results on
Jul 21, after the market closes. In the last reported quarter, the
company had delivered a 2.79% earnings surprise. Let's see how
things are shaping up prior to this announcement.
Factors Influencing Results this Quarter
We believe strong growth across most of its segments is expected
to boost Canadian National Railway's revenues and earnings in the
coming months. Strength in the Intermodal segment along with robust
grain export and increased automotive shipments are expected to
create tailwinds for the company. Additionally, strong
crude-by-rail, expected market gains from frac sand and investments
in infrastructure will likely boost its long-term prospects.
However, a soft recovery in global economic conditions may
induce a negative impact on the volume of rail shipments and
revenues. Volatility in fuel prices owing to change in
geo-political issues can also affect the company's expenses.
Further, Canadian National Railway expects a financial headwind in
2014 due to higher depreciation expenses on account of addition of
new assets, which could potentially affect its earnings.
Our proven model does not conclusively show that Canadian
National Railway is likely to beat earnings this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to
happen. Unfortunately, that is not the case here as elaborated
Earnings ESP which represents the difference between the Most
Accurate estimate and the Zacks Consensus Estimate, stands at
-1.09% for Canadian National Railway.
Canadian National Railway carries a Zacks Rank #3 which increases
the predictive power of ESP. However, we lack a positive ESP, which
deters us from being confident of an earnings surprise.
We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing a negative estimate revision momentum.
Other Stocks to Consider
Here are some other companies to consider as our model shows
that these have the right combination of elements to post an
earnings beat this quarter:
Old Dominion Freight Line Inc.
) with earnings ESP of +2.44% and a Zacks Rank #1.
Genesee & Wyoming Inc.
) with earnings ESP of +0.89% and a Zacks Rank #1.
Norfolk Southern Corp.
) with earnings ESP of +0.58% and a Zacks Rank #2.
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CDN NATL RY CO (CNI): Free Stock Analysis
NORFOLK SOUTHRN (NSC): Free Stock Analysis
GENESEE & WYO (GWR): Free Stock Analysis
OLD DOMINION FL (ODFL): Free Stock Analysis
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