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CP Rail set for gains Thursday, but for several U.S. blue chips, it’s going to be a rough day

Canadian Pacific Railway Ltd. topped profit estimates in its second-quarter earnings, released after markets closed, auguring some gains when trading opens Thursday. The same cannot be said for several major U.S. companies.

The company’s higher-than-expected quarterly profit was helped by higher shipments of commodities like grains and potash. CP’s adjusted earnings per share of $3.16 beat analysts' average estimate of $3.12, according to Thomson Reuters I/B/E/S. The company's revenue of $1.75 billion slightly topped the average estimate of $1.73 billion.

Shares gained just under 1.4 per cent in Toronto Stock Exchange trading Wednesday. The company’s New York Stock Exchange-listed shares were up 1.3 per cent in after-market trading early Wednesday evening.

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While CP delighted, a number of major American names underwhelmed, suggesting some declines are coming in Thursday trading.

Aluminum producer Alcoa Corp. lowered its forecast for adjusted EBITDA, or earnings before interest, tax, depreciation and amortization, for 2018, citing U.S tariffs on imported aluminum and rising energy costs. The company's shares were down 4 percent in after-market trading.

Alcoa now expects adjusted EBITDA to range between US$3.0 billion and US$3.2 billion, compared with its previous forecast of US$3.5 billion to US$3.7 billion.

Alcoa said it had incurred US$15 million in costs related to the tariffs. The company’s imports are mostly from Canada,, where the U.S. government’s Section 232 tariffs, 25 percent on imports of steel and 10 percent on aluminum, became effective on June 1.

The company said that uncertainty continues to exist in the global supply chain due to the U.S. tariffs and ongoing alumina supply disruptions in the Atlantic region.

The company reported adjusted earnings of US$1.52 per share, on a revenue of US$2.86 billion for the second quarter ending June 30, beating Wall Street estimates according to Thomson Reuters I/B/E/S.

American Express Co. reported a steep rise in quarterly expenses as the credit card issuer spent more to fund its rewards program, overshadowing its profit beat and sending its shares down 3.5 percent in extended trading.

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The company has been bolstering its rewards programs as it tries to weather competitive pressures from big bank rivals, including JPMorgan Chase & Co. and Citigroup Inc. AmEx said it spent US$2.43 billion on card member rewards, up 11 percent from a year earlier. It pushed total expenses up 7 percent to US$7.11 billion in the quarter.

Net income rose to US$1.62 billion, or US$1.84 per share, in the second quarter from US$1.34 billion, or US$1.47 per share, a year earlier. Analysts on average were expecting earnings of US$1.82 per share, according to Thomson Reuters I/B/E/S.

While eBay Inc. beat second-quarter expectations, it forecast third-quarter profit below analysts' estimates. Shares were down 2 percent at $37.21 in after-hours trading.

The company forecast third-quarter adjusted profit of 54 US cents to 56 US cents per share and revenue of US$2.64 billion to US$2.69 billion. Analysts on average were expecting a profit of 56 US cents per share and revenue of US$2.66 billion, according to Thomson Reuters I/B/E/S.

The company also lowered its full-year revenue forecast to between US$10.75 billion and US$10.85 billion from US$10.9 billion and US$11.1 billion previously.

Kinder Morgan Canada reported a quarterly profit that nearly halved, as it moved lower volumes of crude oil through its pipeline and its interest expenses also rose due to the pending sale of its Trans Mountain pipeline. The company also said it was withdrawing all prior earnings forecast because of the sale. Net income fell to $13.7 million, or 2 cents per share, in the second quarter ended June 30 from $25.1 million, or 11 cents per share, a year earlier.

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Parent Kinder Morgan Inc. posted adjusted EPS of 20 US cents, versus average expectations of 19 cents. Revenue of $3.428 billion came in below expectations of $3.589, according to Thomson Reuters I/B/E/S.

Thursday’s earnings calendar includes Rogers Communications Inc. Analysts expect, on average, EPS of $1.05 on revenue of just under $3.8 billion. The company is coming off a healthy beat in the first quarter.

Looking forward, though, analysts worry say revenue growth at Canada’s three big carriers could be slowing as they respond to increased competition from Shaw Communications Inc.’s Freedom Mobile. Forecasts suggest the trio will add contract wireless customers in large numbers, continuing a surge in subscribers that has characterized the market over the past two years. But financial analysts say the average monthly revenue the Big Three earn from each wireless customer likely isn’t growing as fast as it used to.

U.S.names reporting before-market Thursday include BB&T Corp., Danaher Corp., Fifth Third Bancorp, KeyCorp, Nucor Corp., PPG Industries Inc., PayPal Holdings Inc., Philip Morris International Inc., the Blackstone Group LP, the Travelers Companies Inc. and Union Pacific Corp.

Note: The earnings-per-share numbers expected by analysts and reported by the companies are typically adjusted for items they consider special, unusual or non-recurring. The EPS figures in this story may not match the companies’ net income per share as calculated by generally accepted accounting principles.

Files from Reuters and Christine Dobby

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