CN 1st Quarter Revenue up 5%

Canadian National saw its first quarter 2022 revenue rise 5 percent to CA$3.7 billion.

The Montreal-based railroad said adjusted diluted earnings per share were CA$1.32, up 7 percent, compared with first-quarter results in 2021.

Operating income was CA$1.2 billion, down 8 percent, and adjusted operating income of CA$1.2 billion, was up 4 percent.

CN officials said net income was CA$918 million, down from CA$976 million a year ago.

CEO Tracy Robinson in a statement said CN showed resilience in the first quarter in the face of severe winter weather conditions and supply chain disruptions “to deliver solid results.”

CN reported diluted EPS of CA$1.31, down 4 percent. The company posted an operating ratio — defined as operating expenses as a percentage of revenue — of 66.9 percent, an increase of 4.4 points, and adjusted operating ratio of 66.6 percent, an increase of 0.3 points.

The velocity of the system during the quarter, which it also describes as car miles per day, fell by by 12 percent. Fuel efficiency remained flat at 0.910 U.S. gallons of locomotive fuel consumed per 1,000 gross ton miles.

The 5 percent revenue increase reflected strong demand despite reduced revenue ton miles that resulted from a significantly smaller Canadian grain crop, CN officials said.

CN attributed the revenue increase mainly to higher applicable fuel surcharge rates, freight rate increases, higher Canadian export volumes of coal via West Coast ports and higher export volumes of U.S. grain.

Revenue was partly offset by significantly lower export volumes of Canadian grain and lower international container traffic volumes via the ports of Vancouver and Prince Rupert.

Operating expenses for the quarter climbed 12 percent to CA$2.481 million, mainly due to higher fuel costs as well as the recovery of a loss on assets held for sale recorded in Q1 2021.

Due to challenging operating conditions in the quarter as well as worldwide economic uncertainty, CN now expects to deliver a 15 percent to 20 percent adjusted diluted EPS growth, compared to its Jan. 25 target of 20 percent. The company is now targeting an Operating ratio below 60 percent for 2022, compared to its Jan. 25 target of about 57 percent.

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