Posts Tagged ‘CN quarterly income’

CN Reports 2nd Quarter Financial Records

July 27, 2022

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

CN 1st Quarter Revenue up 5%

April 28, 2022

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.

CN CEO Ruest to Retire in January

October 21, 2021

Canadian National CEO Jean-Jacques Ruest will retire in January.

In a news release, CN said Ruest had deferred discussing his retirement plans in order to see through the proposed merger with Kansas City Southern, which was called off after the U.S. Surface Transportation Board rejected CN’s request to place KCS stock in a voting trust while regulators reviewed the merger.

The news release said CN would conduct a global search for a new CEO and that Ruest might stay on in his post beyond January if need be until a new CEO is hired.

Ruest has worked for CN for more than 25 years and been CEO since 2018.

In an unrelated development, CN said it earned during the third quarter of 2021 revenue of CA$3.6 billion, up 5 percent from the same period a year ago; operating income of CA$1.34 billion, up 2 percent; adjusted operating income of CA$1.5 billion, up 8 percent.

Diluted earnings per share were CA$2.37, up 72 percent while adjusted diluted earnings per share were CA$152, an increase of 10 percent.

The operating ratio improved 2.8 points to 62.7 percent. The adjusted operating ratio of 59 percent was a gain of 0.9 points.

CN said operating income and operating ratio were affected by transaction-related costs for the unsuccessful bid to acquire KCS.

CN Says It Has Recovered from Pandemic Downtown

July 21, 2021

Canadian National said this week that its posted gains in second-quarter earnings and traffic, with nearly every traffic category growing in volume.

CN managers during an earning call said the results reflected a recovery from the COVID-19 pandemic-induced downtown.

Operating income skyrocketed by 76 percent, to $1.38 billion, as revenue grew 12 percent, to $3.6 billion.

Adjusted for the impact of one-time items, earnings per share increased 16 percent, to $1.46. The operating ratio was 61.6 percent, down from 75.5 percent a year ago but up 1.2 points when last year’s second quarter is adjusted for the impact of one-time items.

On a carload basis, overall volume was up 14 percent. It was up by 13 percent when measured by revenue ton-miles, the preferred metric of Canadian railroads.

The strongest traffic growth occurred in industrial products, intermodal, and propane traffic.

“Our results reflect broad-based trends and forward momentum across all of our business, and also the enduring power of our vast and diversified CN network,” CEO J.J. Ruest said.

CN said its terminal dwell and car miles per day improved, while average train speed was down 2 percent, to 19.5 mph.

The Montreal-based carrier set a quarterly record for fuel efficiency and posted a record low employee personal injury rate. The train accident rate also declined.

CN continues to say that its outlook for the remainder of the year will be high single-digit volume growth and double-digit growth in earnings per share.

CN Net Income Fell in 1st Quarter

April 28, 2021

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.

CN Revenue Up 2% in 2020 4th Quarter

January 27, 2021

Canadian National reported this week that fourth quarter 2020 revenues rose 2 percent to C$3.656 billion vs. the same period in 2019.

CN executives said the increase was due to increased shipments of U.S. grain, higher international container traffic via the Port of Vancouver, and freight rate increases.

However, CN said it also had lower applicable fuel surcharge rates and lower volumes of petroleum crude.

Operating income was up 16 percent to C$1.411 billion and the operating ratio fell 4.6 points to 61.4 percent compared with fourth-quarter 2019 results.

Total revenue ton miles were up 10 percent and carloads were up 7 percent in the fourth quarter compared to the fourth quarter of 2019.

Revenues for 2020 fell 7 percent to C$13.819 billion, which CN said was due to lower volumes across most commodity groups, primarily in the second and third quarter due to the COVID-19 pandemic.

CN said these lower traffic volumes were partly offset by freight rate increases as well as record Canadian grain shipments.

Operating income dropped 15 percent to C$4.777 billion, and the operating ratio increased 2.9 points to 65.4 percent vs. 2019.

Total RTMs and carloads were down 5 percent for the year compared with 2019.

CN expects to spend C$3.0 billion in 2021 on capital expenditures and is projecting “mid-single digit volume growth in 2021 in terms of RTMs.

CN Revenue Down 11% in 3rd Quarter

October 21, 2020

Canadian National reported this week that during the third quarter it had revenues of C$3.41 billion (US$2.59 billion), a decrease of C$421 million (US$319 million) or 11 percent when compared with the same quarter of 2019 period.

In a news release, CN attributed the drop in revenues “mainly due to lower volumes across most commodity groups caused by the ongoing effects of the COVID-19 pandemic.”

CN said other factors included lower fuel surcharge rates, which were partly offset by freight rate increases, and increased shipments of Canadian grain.

Revenue ton miles fell 7 percent while freight revenue per RTM fell by 3 percent over the year-earlier period.

Operating expenses were down 8 percent to C$2.04 billion (US$1.55 billion). CN said this was prompted by lower fuel and labor costs, and fewer purchased services and material expenses.

“The decrease in the first nine months was partly offset by a loss on assets held for sale in the second quarter, resulting from the company’s decision to market for sale for on-going rail operations, certain non-core lines,” CN officials said in a statement.

The third quarter also saw CN experience increased traffic compared with the second quarter of this year. However, overall demand remained below 2019 levels.

CN said by the end of the third quarter some commodities had recovered at or close to 2019 levels.

This included intermodal traffic, lumber and panels used in home renovations and new home construction, and export grain and fertilizers.

Such commodities as finished vehicles, industrial products, petroleum and chemical products, coal, and frac sand remained below pre-pandemic levels.

 “As we look at the fourth quarter and beyond, we continue to see sequential improvements and momentum leading us to have a cautious optimism about the future,” CN President and CEO JJ Ruest said in a statement. “We remain confident in our ability to continue delivering long-term shareholder value.”

CN Revenue Fell 19% in 2nd Quarter

July 23, 2020

Canadian National said this week that its second quarter revenue fell 19 percent to CA$3.2 billion from nearly CA$4 billion a year ago.

The company said the financial results reflected lower volumes due to the COVID-19 pandemic.

Operating income was CA$785 million, down from CA$1.68 billion a year ago; net income of CA$545 million was down from CA$1.36 billion; and diluted earnings per share of 77 Canadian cents per share, down from CA$1.88.

Adjusted earnings per share were CA$1.28, down from CA$1.73. The operating ratio was 60.4 percent for the quarter, up from 57.5 percent compared with a year earlier.

Operating expenses rose 6 percent to CA$2.4 billion, mainly driven by a loss on assets held for sale resulting from the decision to market for sale for on-going rail operations, certain non-core lines, partly offset by lower fuel and and labor costs.

Excluding that one-time charge, operating expenses fell 15 percent compared with second quarter 2019 expenses.

CN attributed falling revenue to lower volumes across most commodity groups caused by the pandemic and lower applicable fuel surcharge rates, which were partly offset by increased shipments of Canadian grain, higher Canadian coal exports and freight rate increases.

“By being adaptable, we were able to swiftly rightsize our resources and continue to provide our essential transportation services to our customers, the economy and the communities we serve,” said President and CEO J.J Ruest in a statement.

During an earnings call with investors this week, CN executives said rising volumes or a second wave of the coronavirus pandemic that would hammer the company’s earnings.

Traffic volume in the second quarter fell 16 percent on a carload basis, or 18 percent when measured by revenue ton-miles, the preferred metric of the Canadian railways.

CN said it ran fewer but longer trains, closed yards and shops, furloughed 4,000 employees, and storing a third of its locomotive fleet and 20,000 freight cars.

Some of those changes are expected to endure said Chief Operating Officer Rob Reilly.

“The idled locomotive shops and switching yards will remain closed,” Reilly said. “We will continue to improve train size year-over-year.”

The closed yards are at Battle Creek, Michigan; Jackson, Mississippi; Garneau, Quebec; and Kamloops, British Columbia.

CN reduced mechanical shop activity at more than 20 locations and closed four locomotive shops.

CN Revenue Fell 6% in 4th Quarter

January 31, 2020

Canadian National said this week that a labor strike and weak freight business contributed to a decline in revenue in the fourth quarter of 2019.

In a news release, CN said revenue declined 6 percent to CA$3.6 billion; diluted earnings per share (EPS) fell 22 percent to CA$1.22, adjusted diluted EPS dropped 16 percent to CA$1.25; and operating income and adjusted operating income each tumbled 16 percent to CA1.2 billion and CA$1.25 billion, respectively.

All figures are in comparison to the fourth quarter of 2018.

CN posted an operating ratio of 66 percent, up 4.1 points, and an adjusted operating ratio of 65.2 percent, up 4 points.

For the 2019 calendar year, CN had revenue of CA$14.9 billion, up 4 percent; a diluted EPS of CA$5.83, down 1 percent; an adjusted EPS of CA$5.80, up 5 percent; operating income of CA$5.6 billion, up 2 percent; and an adjusted operating income of CA$5.7 billion, up 3 percent.

The 2019 operating ratio was 62.5 percent, up 0.9 points; and an adjusted OR of 61.7 percent, up 0.2 points.

Traffic volume in the fourth quarter dropped 7 percent on a carload basis, or 13 percent when measured by revenue ton miles. Every commodity category fell during the quarter.

For the year CN’s traffic volume fell 1 percent on a carload basis or 3 percent on a revenue ton mile basis.

“We remain focused on executing our strategy of long-term sustainable growth at low incremental cost,” said CN President and Chief Executive Officer J.J. Ruest in a statement.

“”Our strategic deployment of technology, the next step in our precision scheduled railroading model and our next driver of value, is well underway. At the same time, we continue to closely monitor the freight volume environment and rightsize our resources and costs to demand.”

CNS said that during the past years it has spent CA$7.4 billion in capital expenditures to increase network capacity, efficiency and resiliency

Ruest said the 2020 capital spending budget will rise to CA$3 billion.

Although CN sees growth opportunities in 2020, it expects low single-digit volume growth in terms of revenue ton miles.

“The first half will be a challenge,” Ruest said.

CN is targeting an EPS growth in the mid single-digit range this year compared to adjusted diluted EPS of CA$5.80 in 2019.

Ruest said CN will look to additional small acquisitions and partnerships as a way to boost freight volume.

“We’re very mindful for the rail industry to be successful, including at CN, we need to grow the pie,” he said.  “Just exchanging pieces of pie, that’s not a long-term solution.”

In the long run Ruest said CN needs to do a better job of competing with trucks.

CN has discarded 5,000 freight cars, returned all leased locomotives, vacated some office space in Montreal, and eliminated 1,300 positions.

CN Revenue Rose 4% in 3rd Quarter

October 24, 2019

Canadian National reported this week that its third quarter 2019 revenue increased 4 percent to CA$3.8 billion.

Diluted earnings per share rose 8 percent to CA$1.66, operating income increased by 8 percent to CA$1.6 million and net income was up 0.5 percent to CA$1.2 billion compared with the third quarter of 2018.

The third quarter 2019 operating ratio was 57.9 percent compared with 59.5 percent a year ago.

“Our team of railroaders swiftly aligned resources with the weaker demand to achieve solid efficiency gains,” said CN President and Chief Executive Officer JJ Ruest in a statement.

“We remain committed to our long-term agenda of growing faster than the economy at low incremental cost, and to taking scheduled railroading to the next level by deploying advanced operating technology.”

In a news release, CN said the revenue growth came from freight rate increases and higher intermodal revenue.

Operating expenses for the quarter were up 1 percent to CA2.2 billion due to higher purchased services and material expenses as well as higher depreciation and amortization expenses.

A slowing demand for rail service led CN to revise its profit outlook for 2019.

It is now projecting adjusted diluted EPS growth in the high single-digit range for 2019 versus last year’s adjusted diluted EPS of CA$5.50.

This past July CN’s financial outlook called for low double-digit growth in adjusted diluted EPS.

The carrier also expects a “slightly negative volume growth” this year in revenue ton miles.

CN said it sees signs of two economies, one of which is a strong consumer sector that’s boosting intermodal and automotive traffic and the other a struggling industrial economy that’s depressing demand for carload freight.

Volume for the third quarter was down 1 percent on a revenue ton-mile basis and by 0.4 percent on a carload basis.

In recent months, CN has responded to softening traffic by reducing its motive power and freight car fleets.

“We’re in process of returning nearly 3,000 railcars that were on lease, scrapping another 2,000 railcars, and have parked over 6,000 cars to saving car hire expense,” said Chief Operating Officer Rob Reilly.

CN has 150 locomotives in storage and will return remaining leased units this quarter.

It has furloughed train and engine crews, as well as mechanical employees.