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Canadian National (CNI) Q1 Earnings Miss Estimates, Rise Y/Y
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Canadian National Railway Company’s (CNI - Free Report) first-quarter 2021 earnings (excluding 11 cents from non-recurring items) of 97 cents per share (C$1.23) missed the Zacks Consensus Estimate of 99 cents. However, the bottom line increased year over year on lower costs.
Quarterly revenues of $2,791.6 million (C$3,535 million) lagged the Zacks Consensus Estimate of $2,813.1 million. The top line, however, benefited from higher intermodal volumes and shipments of Canadian grain, and freight rate increases amid coronavirus-led weakness in other segments.
Freight revenues (C$3,423 million), which contributed 96.8% to the top line, were flat year over year. Freight revenues in Petroleum and chemicals, Metals and minerals, Forest products, Coal and Automotive declined 16%, 9%, 1%, 12% and 18%, respectively, in the first quarter. The same increased 17% and 14% in Grain and fertilizers, and Intermodal segments, respectively.
Canadian National Railway Company Price, Consensus and EPS Surprise
While overall carloads increased 7% year over year, revenue ton miles (RTMs) inched up 5%. Segment-wise, carloads in the Petroleum and chemicals, Metals and minerals, Forest products, Coal and Automotive declined 13%, 7%, 2%, 10% and 12%, respectively. Meanwhile, carloads in Grain and fertilizers, and Intermodal segments increased 17% and 23%, respectively. However, freight revenues per carload dropped 7% in the reported quarter. Freight revenues per RTM also fell 5%.
Operating expenses for the first quarter decreased 5% to C$2,208 million owing to a favorable currency impact among other factors. Adjusted operating income dipped 2.1% year over year to C$1,190 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) deteriorated to 66.3% from the year-ago quarter’s figure of 65.7%. Notably, a smaller value of the metric is desirable.
Liquidity
This Zacks Rank #3 (Hold) company exited the first quarter of 2021 with cash and cash equivalents of C$518 million compared with C$569 million recorded at the end of 2020. The company generated free cash flow of C$539 million during the March quarter compared with the year-ago quarter’s C$573 million. Long-term debt amounted to C$12,252 million as of Mar 31, 2021 compared with C$11,996 million at December 2020-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2021 Outlook
Canadian National anticipates earnings per share to grow in double-digits during 2021 from adjusted earnings of C$5.31 in 2020. Additionally, volumes, measured in revenue ton miles (RTMs), are expected to increase in high-single digits during 2021. Further, the company estimates free cash flow of C$3-C$3.3 billion in 2021 compared with C$3.2 billion in 2020.
Sectorial Snapshots
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported first-quarter 2021 results.
Delta, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $1.70 from non-recurring items) of $3.55 per share, wider than the Zacks Consensus Estimate of a loss of $3.08. However, total revenues of $4,150 million topped the Zacks Consensus Estimate of $3,821.3 million.
J.B. Hunt, a Zacks #3 Ranked player, reported earnings of $1.37 per share, beating the Zacks Consensus Estimate of $1.18. Total operating revenues of $2,618.1 million also surpassed the Zacks Consensus Estimate of $2,486.9 million.
Kansas City Southern, carrying a Zacks Rank of 3, reported earnings (excluding 23 cents from non-recurring items) of $1.91 per share, missing the Zacks Consensus Estimate of $2. Moreover, quarterly revenues of $706 million lagged the Zacks Consensus Estimate of $714.3 million.
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Canadian National (CNI) Q1 Earnings Miss Estimates, Rise Y/Y
Canadian National Railway Company’s (CNI - Free Report) first-quarter 2021 earnings (excluding 11 cents from non-recurring items) of 97 cents per share (C$1.23) missed the Zacks Consensus Estimate of 99 cents. However, the bottom line increased year over year on lower costs.
Quarterly revenues of $2,791.6 million (C$3,535 million) lagged the Zacks Consensus Estimate of $2,813.1 million. The top line, however, benefited from higher intermodal volumes and shipments of Canadian grain, and freight rate increases amid coronavirus-led weakness in other segments.
Freight revenues (C$3,423 million), which contributed 96.8% to the top line, were flat year over year. Freight revenues in Petroleum and chemicals, Metals and minerals, Forest products, Coal and Automotive declined 16%, 9%, 1%, 12% and 18%, respectively, in the first quarter. The same increased 17% and 14% in Grain and fertilizers, and Intermodal segments, respectively.
Canadian National Railway Company Price, Consensus and EPS Surprise
Canadian National Railway Company price-consensus-eps-surprise-chart | Canadian National Railway Company Quote
While overall carloads increased 7% year over year, revenue ton miles (RTMs) inched up 5%. Segment-wise, carloads in the Petroleum and chemicals, Metals and minerals, Forest products, Coal and Automotive declined 13%, 7%, 2%, 10% and 12%, respectively. Meanwhile, carloads in Grain and fertilizers, and Intermodal segments increased 17% and 23%, respectively. However, freight revenues per carload dropped 7% in the reported quarter. Freight revenues per RTM also fell 5%.
Operating expenses for the first quarter decreased 5% to C$2,208 million owing to a favorable currency impact among other factors. Adjusted operating income dipped 2.1% year over year to C$1,190 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) deteriorated to 66.3% from the year-ago quarter’s figure of 65.7%. Notably, a smaller value of the metric is desirable.
Liquidity
This Zacks Rank #3 (Hold) company exited the first quarter of 2021 with cash and cash equivalents of C$518 million compared with C$569 million recorded at the end of 2020. The company generated free cash flow of C$539 million during the March quarter compared with the year-ago quarter’s C$573 million. Long-term debt amounted to C$12,252 million as of Mar 31, 2021 compared with C$11,996 million at December 2020-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
2021 Outlook
Canadian National anticipates earnings per share to grow in double-digits during 2021 from adjusted earnings of C$5.31 in 2020. Additionally, volumes, measured in revenue ton miles (RTMs), are expected to increase in high-single digits during 2021. Further, the company estimates free cash flow of C$3-C$3.3 billion in 2021 compared with C$3.2 billion in 2020.
Sectorial Snapshots
Within the broader Transportation sector, Delta Air Lines (DAL - Free Report) , J.B. Hunt Transport Services (JBHT - Free Report) and Kansas City Southern recently reported first-quarter 2021 results.
Delta, carrying a Zacks Rank #4 (Sell), incurred a loss (excluding $1.70 from non-recurring items) of $3.55 per share, wider than the Zacks Consensus Estimate of a loss of $3.08. However, total revenues of $4,150 million topped the Zacks Consensus Estimate of $3,821.3 million.
J.B. Hunt, a Zacks #3 Ranked player, reported earnings of $1.37 per share, beating the Zacks Consensus Estimate of $1.18. Total operating revenues of $2,618.1 million also surpassed the Zacks Consensus Estimate of $2,486.9 million.
Kansas City Southern, carrying a Zacks Rank of 3, reported earnings (excluding 23 cents from non-recurring items) of $1.91 per share, missing the Zacks Consensus Estimate of $2. Moreover, quarterly revenues of $706 million lagged the Zacks Consensus Estimate of $714.3 million.
Time to Invest in Legal Marijuana
If you’re looking for big gains, there couldn’t be a better time to get in on a young industry primed to skyrocket from $17.7 billion back in 2019 to an expected $73.6 billion by 2027.
After a clean sweep of 6 election referendums in 5 states, pot is now legal in 36 states plus D.C. Federal legalization is expected soon and that could be a still greater bonanza for investors. Even before the latest wave of legalization, Zacks Investment Research has recommended pot stocks that have shot up as high as +285.9%
You’re invited to check out Zacks’ Marijuana Moneymakers: An Investor’s Guide. It features a timely Watch List of pot stocks and ETFs with exceptional growth potential.
Today, Download Marijuana Moneymakers FREE >>