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Canadian National (CNI) Q1 Earnings Lag, Revenues Top Mark
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Canadian National Railway Company’s (CNI - Free Report) adjusted earnings of 88 cents per share (C$1.17) missed the Zacks Consensus Estimate by a penny. However, the bottom line improved double digits on a year-over-year basis owing to higher revenues.
Moreover, quarterly revenues came in at $2,666 million (C$3,544 million), edging past the Zacks Consensus Estimate of $2,612 million. The top line also improved on a year-over-year basis on the back of strong freight revenues and positive foreign currency impact. Also, rail freight revenues improved 11.3% year over year and contributed 96.3% to the top line.
Operating Results
On a year-over-year basis, freight revenues rose in Petroleum and Chemicals (30%), Metals and Minerals (9%), Forest Products (8%), Coal (15%), Grain and Fertilizers (7%), Intermodal (4%) as well as Automotive (7%). Overall, carloads (volumes) and revenue ton miles (RTMs) inched up 1% and 3%, respectively. Moreover, rail freight revenue per carload ascended 11% in the quarter under review. Additionally, rail freight revenue per RTM increased 8%.
The Petroleum and Chemicals sub-group performed impressively with respect to carloads with the metric increasing10% year over year. In Grain and Fertilizers, volumes rose 3%. Carloads also expanded 3% at the Automotive segment. However, the metric contracted 3% and 4% at the Metals and Minerals and the Forest Products segments, respectively. Meanwhile, it remained flat at the Coal and Intermodal units.
Adjusted operating income increased 13% year over year to C$1,164 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) improved to 67.2% from 76.8% in the year-ago quarter. Notably, lower value of this key metric bodes well for the company.
However, operating expenses rose 14% year over year to C$2,464 million. This downside was mainly due to high labor costs, elevated costs as a result of severe weather conditions and other factors.
Liquidity
The company exited the first quarter with cash and cash equivalents of C$339 million compared with C$266 million at the end of 2018. Free cash flow came in at C$286 million compared with C$322 million in the year-ago period. Long-term debt amounted to C$11,692 million as of Mar 31, 2019 compared with C$11,385 million in December 2018.
Dividend Update
The company’s board has declared a quarterly cash dividend of C$0.5375 per share, payable to shareholders on Jun 28, 2019 of record as of Jun 7.
2019 Outlook Reaffirmed
For 2019, Canadian National still anticipates adjusted earnings per share to grow in the range of low double-digits compared with C$5.50 in the prior-year period. RTMs are expected to witness a high single-digit volume expansion on the back of significant growth opportunities along with a favorable economy.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players like Expeditors International of Washington, Inc. (EXPD - Free Report) , Air Lease Corporation (AL - Free Report) and Hertz Global Holdings, Inc (HTZ - Free Report) . While Hertz Global will report first-quarter earnings on May 6, Expeditors and Air Lease will announce the same on May 7 and May 9, respectively.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time. See 7 breakthrough stocks now>>
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Canadian National (CNI) Q1 Earnings Lag, Revenues Top Mark
Canadian National Railway Company’s (CNI - Free Report) adjusted earnings of 88 cents per share (C$1.17) missed the Zacks Consensus Estimate by a penny. However, the bottom line improved double digits on a year-over-year basis owing to higher revenues.
Moreover, quarterly revenues came in at $2,666 million (C$3,544 million), edging past the Zacks Consensus Estimate of $2,612 million. The top line also improved on a year-over-year basis on the back of strong freight revenues and positive foreign currency impact. Also, rail freight revenues improved 11.3% year over year and contributed 96.3% to the top line.
Operating Results
On a year-over-year basis, freight revenues rose in Petroleum and Chemicals (30%), Metals and Minerals (9%), Forest Products (8%), Coal (15%), Grain and Fertilizers (7%), Intermodal (4%) as well as Automotive (7%). Overall, carloads (volumes) and revenue ton miles (RTMs) inched up 1% and 3%, respectively. Moreover, rail freight revenue per carload ascended 11% in the quarter under review. Additionally, rail freight revenue per RTM increased 8%.
The Petroleum and Chemicals sub-group performed impressively with respect to carloads with the metric increasing10% year over year. In Grain and Fertilizers, volumes rose 3%. Carloads also expanded 3% at the Automotive segment. However, the metric contracted 3% and 4% at the Metals and Minerals and the Forest Products segments, respectively. Meanwhile, it remained flat at the Coal and Intermodal units.
Adjusted operating income increased 13% year over year to C$1,164 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) improved to 67.2% from 76.8% in the year-ago quarter. Notably, lower value of this key metric bodes well for the company.
However, operating expenses rose 14% year over year to C$2,464 million. This downside was mainly due to high labor costs, elevated costs as a result of severe weather conditions and other factors.
Liquidity
The company exited the first quarter with cash and cash equivalents of C$339 million compared with C$266 million at the end of 2018. Free cash flow came in at C$286 million compared with C$322 million in the year-ago period. Long-term debt amounted to C$11,692 million as of Mar 31, 2019 compared with C$11,385 million in December 2018.
Dividend Update
The company’s board has declared a quarterly cash dividend of C$0.5375 per share, payable to shareholders on Jun 28, 2019 of record as of Jun 7.
2019 Outlook Reaffirmed
For 2019, Canadian National still anticipates adjusted earnings per share to grow in the range of low double-digits compared with C$5.50 in the prior-year period. RTMs are expected to witness a high single-digit volume expansion on the back of significant growth opportunities along with a favorable economy.
Upcoming Releases
Investors interested in the broader Transportation sector are keenly awaiting first-quarter earnings reports from key players like Expeditors International of Washington, Inc. (EXPD - Free Report) , Air Lease Corporation (AL - Free Report) and Hertz Global Holdings, Inc (HTZ - Free Report) . While Hertz Global will report first-quarter earnings on May 6, Expeditors and Air Lease will announce the same on May 7 and May 9, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 7 stocks to watch. The report is only available for a limited time.
See 7 breakthrough stocks now>>