Canadian National executives said this week that they expect freight volume growth in the high single digit percentage range this year.
They made the assessment when announcing first quarter financial results that showed a drop in net income.
At the same time CN said it experienced during the quarter record intermodal and grain traffic.
Management expects an improving economy to boost merchandise traffic.
For the first quarter, CN said net income fell 3.7 percent to CA$974 million, or $1.37 per diluted share, from CA$1.01 billion, or $1.42 per diluted share, in the same period a year ago.
The total revenue of CA$3.5 billion for the quarter was “in line” with the same quarter in 2020, CN said in a news release.
Operating income rose 9 percent to CA$1.3 billion, but adjusted operating income of CA$1.2 billion was down 2 percent.
The statement described the first quarter results as “solid,” and included a year-over-year increase in traffic volume of 5 percent.
During a conference call to discuss the first quarter results, CN executives said they expect double-digit growth in earnings per share, up from between 7 percent and 9 percent.
CN’s first quarter volume was up 7 percent based on carloads or 5 percent based on revenue ton-miles, the preferred metric of the Canadian railways.
“Here at CN, we’re off to a good strong running start,” CN CEO JJ Ruest said during the earnings call.
Intermodal revenue ton-miles was up 19 percent while grain and fertilizers shipments rose 26 percent.
First quarter volume, based on gross ton miles, was a record.
At the same time, average train speed dipped 1 percent. Terminal dwell times held steady and car miles per day were up 5 percent.
During the period train length rose 5 percent, leading to a fuel efficiency improvement of 4 percent.
The operating ratio of was 62.5 percent with an adjusted OR of 66.3 percent for the quarter. A year ago, CN had an operating ratio or adjusted operating ratio of 65.7 percent.
Tags: Canadian National, CN financial outlook, CN financial results, CN Quarterly financial reports, CN quarterly income, CSX financial results, Jean-Jacques Ruest
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