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Canadian National (CNI) Q1 Earnings Lag, '18 View Trimmed
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Canadian National Railway Company’s (CNI - Free Report) first-quarter 2018 earnings per share of 79 cents (C$1) lagged the Zacks Consensus Estimate of 80 cents. Moreover, the bottom line plunged significantly from the year-ago figure. High operating expenses hurt results.
Quarterly revenues of $2,521.3 million (C$3,194 million) however, surpassed the Zacks Consensus Estimate of $2,482.6 million. Rail freight revenues, accounting for the bulk of the top line in the reported quarter, saw a marginal dip.
Operating Results
On a year-over-year basis, freight revenues rose in Metals and Minerals (7%), Coal (10%) and Intermodal (10%) segments. While the same declined at Petroleum and Chemicals (3%), Forest Products (6%), Grain and Fertilizers (11%) as well as Automotive (4%). Overall, carloads (volumes) expanded 3% while revenue ton miles (RTMs) slipped 4% year over year. Meanwhile, rail freight revenues per carload declined 3% in the quarter under review.
The Coal and Intermodal sub-groups performed impressively with respect to car loads. In fact, the metric expanded 10% each at the two segments. The same increased 4% at the Metals and minerals segment. However, in Petroleum and Chemicals, Forest Products, Grain and Fertilizers plus Automotive, the car loads contracted 3%, 7%, 12% and 4%, respectively.
In the period under discussion, operating income decreased 16% year over year to C$1,030 million. Operating ratio (defined as operating expenses as a percentage of revenues) was 67.8% compared with 61.8% in the year-ago quarter. Higher fuel and labor costs as well as harsh weather conditions and a low network resiliency induced this key metric’s deterioration.
Canadian National Railway Company Price, Consensus and EPS Surprise
This Zacks Rank #4 (Sell) company exited the first quarter with free cash flow of C$322 million compared with C$848 million a year ago. As of Mar 31, 2018, adjusted debt was C$12,841 million compared with C$11,880 million in the prior year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dividend
The company’s board of directors approved a dividend of 45.5 cents (C$0.4550) for the second quarter, payable Jun 29, 2018 to shareholders of record as of Jun 8.
Bearish 2018 Outlook
The company now expects adjusted earnings per share of C$5.10-C$5.25 for 2018. tthe previous outlook was in the range of C$5.25-C$5.40. The company has trimmed its view due to lower-than-expected RTMs in the first quarter. Thehe longer-than-expected construction period for significant infrastructure capacity projects in the current year also contributed to the outlook being slashed.
Capital Program Value Raised
The company has increased its C$3.2-billion capital program to C$3.4 billion. It plans to invest approximately C$400 million in new track infrastructure, mainly in Western Canada to increase capacity and enhance resiliency.
Upcoming Releases
Investors interested in the broader Transportation sector keenly await first-quarter earnings reports from key players, namely American Airlines Group Inc. (AAL - Free Report) , Southwest Airlines Co. (LUV - Free Report) and Union Pacific Corporation (UNP - Free Report) , all scheduled to release respective earnings numbers on Apr 26.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Canadian National (CNI) Q1 Earnings Lag, '18 View Trimmed
Canadian National Railway Company’s (CNI - Free Report) first-quarter 2018 earnings per share of 79 cents (C$1) lagged the Zacks Consensus Estimate of 80 cents. Moreover, the bottom line plunged significantly from the year-ago figure. High operating expenses hurt results.
Quarterly revenues of $2,521.3 million (C$3,194 million) however, surpassed the Zacks Consensus Estimate of $2,482.6 million. Rail freight revenues, accounting for the bulk of the top line in the reported quarter, saw a marginal dip.
Operating Results
On a year-over-year basis, freight revenues rose in Metals and Minerals (7%), Coal (10%) and Intermodal (10%) segments. While the same declined at Petroleum and Chemicals (3%), Forest Products (6%), Grain and Fertilizers (11%) as well as Automotive (4%). Overall, carloads (volumes) expanded 3% while revenue ton miles (RTMs) slipped 4% year over year. Meanwhile, rail freight revenues per carload declined 3% in the quarter under review.
The Coal and Intermodal sub-groups performed impressively with respect to car loads. In fact, the metric expanded 10% each at the two segments. The same increased 4% at the Metals and minerals segment. However, in Petroleum and Chemicals, Forest Products, Grain and Fertilizers plus Automotive, the car loads contracted 3%, 7%, 12% and 4%, respectively.
In the period under discussion, operating income decreased 16% year over year to C$1,030 million. Operating ratio (defined as operating expenses as a percentage of revenues) was 67.8% compared with 61.8% in the year-ago quarter. Higher fuel and labor costs as well as harsh weather conditions and a low network resiliency induced this key metric’s deterioration.
Canadian National Railway Company Price, Consensus and EPS Surprise
Canadian National Railway Company Price, Consensus and EPS Surprise | Canadian National Railway Company Quote
Liquidity
This Zacks Rank #4 (Sell) company exited the first quarter with free cash flow of C$322 million compared with C$848 million a year ago. As of Mar 31, 2018, adjusted debt was C$12,841 million compared with C$11,880 million in the prior year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dividend
The company’s board of directors approved a dividend of 45.5 cents (C$0.4550) for the second quarter, payable Jun 29, 2018 to shareholders of record as of Jun 8.
Bearish 2018 Outlook
The company now expects adjusted earnings per share of C$5.10-C$5.25 for 2018. tthe previous outlook was in the range of C$5.25-C$5.40. The company has trimmed its view due to lower-than-expected RTMs in the first quarter. Thehe longer-than-expected construction period for significant infrastructure capacity projects in the current year also contributed to the outlook being slashed.
Capital Program Value Raised
The company has increased its C$3.2-billion capital program to C$3.4 billion. It plans to invest approximately C$400 million in new track infrastructure, mainly in Western Canada to increase capacity and enhance resiliency.
Upcoming Releases
Investors interested in the broader Transportation sector keenly await first-quarter earnings reports from key players, namely American Airlines Group Inc. (AAL - Free Report) , Southwest Airlines Co. (LUV - Free Report) and Union Pacific Corporation (UNP - Free Report) , all scheduled to release respective earnings numbers on Apr 26.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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