The Canadian National Railway Company (TSX:CNR)(NYSE:CNI) is due up to report its quarterly earnings next week, and investors have high expectations for the transport giant. CN shot the lights out last quarter, delivering on just about everything shareholders could have hoped for: record profits, dividend hikes, and share buybacks.
The question now is whether the company can continue to crank out such spectacular results. Let’s take an early look at what has been happening at CN over the past year and what we’re likely to see in this upcoming report.
Stats on the Canadian National Railway
|Analyst EPS Estimate||$0.85|
|Change From Year-Ago EPS||29%|
|Revenue Estimate||$3.03 billion|
|Change From Year-Ago Revenue||12.4%|
|Earnings Beats in Past Four Quarters||3|
Management was happy with the results. As CEO Claude Mongeau summarized, “CN delivered a strong fourth-quarter 2014 performance, concluding a remarkable year characterized by brutal first-quarter winter weather, followed by a strong rebound starting in March and capped by record full-year freight volumes.”
However, CN does face some headwinds. As a result of growing production and a shortage of pipeline capacity, railroads have become a key mover of energy products. But if oil prices remain low, the boom in crude-by-rail transport could come to an end.
Derailments are another concern. CN’s safety record deteriorated sharply last year and critics say their trains are running too long, too heavy, and too fast. That’s worrying for shareholders because the heightened cost of upgrading tank cars and railroad networks could eat into profits.
In CN’s earnings report, watch to see how the railroad’s various segments perform. If energy shipments remain robust, then the stock could keep chugging along.
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Fool contributor Robert Baillieul has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.