A sound start to the year
Q1 Adj. EPS of $2.70 missed consensus estimates of $2.72, although ahead of AE at $2.69E. Expenses were materially higher than expected (comp & ben +25% YoY) with an OR of 67.5% representing 190bp YoY deterioration on an adjusted basis (510bp reported). Revenues also fell short of expectations with ~flat RPCs much lower than expected (-5% mix the driver). CP has maintained its full-year guidance for MSD revenue growth and low DD EPS growth, which both appear achievable as difficult winter conditions subside.Canadian Pacific Railway operates a transcontinental railway in Canada and the U.S. Co.'s business mix includes bulk commodities, merchandise freight and intermodal traffic, serving the principal business centers of Canada from Montreal, Quebec, to Vancouver, British Columbia, and the U.S. Northeast and Midwest regions. As of Dec 31 2016, Co. operated on a network of approximately 12,400 miles of track, of which CP owns 10,800 miles and has access to 1,600 miles under trackage rights and lease agreements. Of the total mileage operated, about 5,600 miles were located in western Canada, 2,000 miles in eastern Canada, 4,400 miles in the U.S. Midwest and 400 miles in the U.S. Northeast.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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