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Canadian National (CNI) Q1 Earnings & Revenues Top Estimates
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Canadian National Railway Company (CNI - Free Report) reported better-than-expected first-quarter 2023 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $1.35 per share (C$1.82) beat the Zacks Consensus Estimate of $1.26 and improved 29.8% year over year.
Quarterly revenues of $3,189.8 million (C$4,313 million) outperformed the Zacks Consensus Estimate of $3,152.3 million and increased year over year. The uptick was driven by higher fuel surcharge revenues as a result of higher fuel prices, higher export volumes of Canadian grain, freight rate increases and the positive translation impact of a weaker Canadian dollar. These were partly offset by lower intermodal volumes.
Freight revenues (C$4,219 million), which contributed 97.8% to the top line, increased 17% year over year. Freight revenues at Petroleum and Chemicals; Metals and minerals; Forest products; Coal; Grain and fertilizers; and Automotive segments increased 10%, 30%, 20%, 35%, 43%, and 30%, respectively. Revenues at the Intermodal segment fell 4%.
Carloads revenues grew 1% year over year. Segment-wise, carloads in Petroleum and Chemicals; Metals and Minerals; Forest Products; Coal; Grain and Fertilizers and Automotive grew 1%, 13%, 4%, 10%, 23% and 13%, respectively. The same at Intermodal decreased by 13%.
Freight revenues per carload climbed 16% year over year in the reported quarter, while freight revenues per revenue ton-miles improved 10%.
Operating expenses rose 7% year over year to C$2,651 million due to the negative translation impact of a weaker Canadian dollar, increased purchased services and material expenses and higher labor and fringe benefits expenses (backed by a higher average headcount).
Adjusted operating income increased 34.4% year over year to C$1,662 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) came in at 61.5% in the first quarter of 2023, down from 66.6% in the year-ago reported quarter.
Liquidity
Canadian National generated a free cash flow of C$593 million during the first quarter compared with the year-ago quarter’s C$571 million.
2023 Outlook
Given its solid first-quarter results, Canadian National now anticipates delivering earnings growth in the mid-single digits (prior view: low-single-digit range).
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.
JBHT’s total operating revenues of $3,229.58 million also lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), and a 17% decline in revenue per load in Truckload (JBT). Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%.
JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.
Delta Air Lines’ (DAL - Free Report) first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel prices and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
Alaska Air Group, Inc. (ALK - Free Report) reported first-quarter 2023loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. In the year-ago quarter, ALK incurred a loss of $1.33 per share.
ALK’s operating revenues of $2,196 million missed the Zacks Consensus Estimate of $2,202.5 million. The top line jumped 31% year over year, with passenger revenues accounting for 90.3% of the top line and increasing 31% owing to continued recovery in air-travel demand.
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Canadian National (CNI) Q1 Earnings & Revenues Top Estimates
Canadian National Railway Company (CNI - Free Report) reported better-than-expected first-quarter 2023 results, wherein both earnings and revenues outperformed the Zacks Consensus Estimate.
Quarterly earnings of $1.35 per share (C$1.82) beat the Zacks Consensus Estimate of $1.26 and improved 29.8% year over year.
Quarterly revenues of $3,189.8 million (C$4,313 million) outperformed the Zacks Consensus Estimate of $3,152.3 million and increased year over year. The uptick was driven by higher fuel surcharge revenues as a result of higher fuel prices, higher export volumes of Canadian grain, freight rate increases and the positive translation impact of a weaker Canadian dollar. These were partly offset by lower intermodal volumes.
Freight revenues (C$4,219 million), which contributed 97.8% to the top line, increased 17% year over year. Freight revenues at Petroleum and Chemicals; Metals and minerals; Forest products; Coal; Grain and fertilizers; and Automotive segments increased 10%, 30%, 20%, 35%, 43%, and 30%, respectively. Revenues at the Intermodal segment fell 4%.
Carloads revenues grew 1% year over year. Segment-wise, carloads in Petroleum and Chemicals; Metals and Minerals; Forest Products; Coal; Grain and Fertilizers and Automotive grew 1%, 13%, 4%, 10%, 23% and 13%, respectively. The same at Intermodal decreased by 13%.
Freight revenues per carload climbed 16% year over year in the reported quarter, while freight revenues per revenue ton-miles improved 10%.
Operating expenses rose 7% year over year to C$2,651 million due to the negative translation impact of a weaker Canadian dollar, increased purchased services and material expenses and higher labor and fringe benefits expenses (backed by a higher average headcount).
Adjusted operating income increased 34.4% year over year to C$1,662 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) came in at 61.5% in the first quarter of 2023, down from 66.6% in the year-ago reported quarter.
Liquidity
Canadian National generated a free cash flow of C$593 million during the first quarter compared with the year-ago quarter’s C$571 million.
2023 Outlook
Given its solid first-quarter results, Canadian National now anticipates delivering earnings growth in the mid-single digits (prior view: low-single-digit range).
Currently, Canadian National carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performances of Other Transportation Companies
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) first-quarter 2023 earnings of $1.89 per share missed the Zacks Consensus Estimate of $2.04 and declined 17.5% year over year.
JBHT’s total operating revenues of $3,229.58 million also lagged the Zacks Consensus Estimate of $3,434.4 million and fell 7.4% year over year. The downfall was due to declines in the volume of 25% in Integrated Capacity Solutions (ICS), 5% in Intermodal (JBI) and 17% in Final Mile Services (FMS), and a 17% decline in revenue per load in Truckload (JBT). Revenue declines in ICS, JBI, FMS and JBT were partially offset by Dedicated Contract Services revenue growth of 13%.
JBHT’s total operating revenues, excluding fuel surcharges, decreased 10.2% year over year.
Delta Air Lines’ (DAL - Free Report) first-quarter 2023 earnings (excluding 82 cents from non-recurring items) of 25 cents per share missed the Zacks Consensus Estimate of 29 cents. Volatile fuel prices and unfavorable weather conditions led to this downtick. DAL reported a loss of $1.23 per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $12,759 million, which missed the Zacks Consensus Estimate of $12,767.4 million. Driven by higher air-travel demand, total revenues increased 36.49% on a year-over-year basis.
Alaska Air Group, Inc. (ALK - Free Report) reported first-quarter 2023 loss of 62 cents per share, wider than the Zacks Consensus Estimate of a loss of 48 cents. In the year-ago quarter, ALK incurred a loss of $1.33 per share.
ALK’s operating revenues of $2,196 million missed the Zacks Consensus Estimate of $2,202.5 million. The top line jumped 31% year over year, with passenger revenues accounting for 90.3% of the top line and increasing 31% owing to continued recovery in air-travel demand.