Canadian National Railway (NYSE:CNI) announces its next round of earnings this Tuesday, July 20. Here is Benzinga’s everything-that-matters guide for this Tuesday’s Q2 earnings announcement.
What Are Earnings, Net Income, And Earnings Per Share?
Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.
Earnings And Revenue
Canadian National Railway earnings will be near $1.21 per share on sales of $2.94 billion, according to analysts. Canadian National Railway reported a profit of $0.92 per share when it published results during the same quarter last year. Sales in that period totaled $2.31 billion.
Why Analyst Estimates And Earnings Surprises Are Important
Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the “consensus estimates”; these consensus estimates can have a significant effect on a company’s performance during an earnings release.
When a company posts earnings or revenue above or below a consensus estimate, it has posted an “earnings surprise”, which can really move a stock depending on the difference between actual and estimated values.
If the company were to report earnings in line when it publishes results Tuesday, quarterly profit would be up 31.52%. Sales would be up 27.0% from the same quarter last year. Here is how the company’s reported EPS has stacked up against analyst estimates in the past:
| Quarter | Q1 2021 | Q4 2020 | Q3 2020 | Q2 2020 |
|---|---|---|---|---|
| EPS Estimate | 1 | 1.1 | 1.09 | 1.25 |
| EPS Actual | 0.97 | 1.1 | 1.04 | 0.92 |
| Revenue Estimate | 2.88 B | 2.83 B | 2.66 B | 3.25 B |
| Revenue Actual | 2.78 B | 2.81 B | 2.56 B | 2.31 B |
Stock Performance
Shares of Canadian National Railway were trading at $104.38 as of July 16. Over the last 52-week period, shares are up 7.0%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.
Do not be surprised to see the stock move on comments made during its conference call. Canadian National Railway is scheduled to hold the call at 16:30:00 ET and can be accessed here.
