CN Reports 2nd Quarter Financial Records

Canadian National reported on Tuesday that its second quarter 2022 performance included record revenue and a record operating income.

In a news release, CN said adjusted diluted earnings per share were a record C$1.93, up 30 percent.

CN said its operational performance improved in key operating metrics such as origin train performance, car velocity, through dwell and record fuel efficiency, resulting in a lower operating ratio.

The news release said revenue was C$4,344 million, an increase of C$746 million or 21 percent

The operating income of C$1,769 million rose 28 percent, and record adjusted operating income of C$1,781 million was an increase of 29 percent.

The operating ratio, defined as operating expenses as a percentage of revenues, was 59.3 percent, an improvement of 2.3-points, and adjusted operating ratio of 59.0 percent, an improvement of 2.6-points.

All percentage changes are comparisons with the second quarter of 2021.

The Montreal-based carrier said it expects approximately a 15-20 percent adjusted diluted earnings per share growth in 2022 while seeking an operating ratio below 60 percent.

CN attributed its higher revenues in the second quarter to higher fuel surcharge rates, freight rate increases, higher Canadian export volumes of coal via west coast ports, higher volumes of U.S. grain and the positive translation impact of a weaker Canadian dollar; partly offset by significantly lower export volumes of Canadian grain.

During an earnings call CN CEO Tracy Robinson said the railroad is performing at its highest levels in five years.

“We’ve leaned in to our scheduled operations, improving train performance and service to customers. And we’re seeing the beginning of improvements in velocity,” Robinson said.

CN executives said during the call that the carrier has hired 850 conductors since the end of 2021.

During the quarter CN said it handled record traffic levels in the U.S., thanks partly to a rise in export grain and coal shipments due to the war in Ukraine.

More information is available at https://www.cn.ca/en/news/2022/07/cn-reports-second-quarter-results/

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