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Canadian National (CNI) Q2 Earnings & Revenues Lag Estimates
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Canadian National Railway Company (CNI - Free Report) reported disappointing second-quarter 2023 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings per share (EPS) of $1.31 (C$1.76) missed the Zacks Consensus Estimate of $1.37 and declined year over year.
Quarterly revenues of $3,020.5 million (C$4,057 million) missed the Zacks Consensus Estimate of $3,129.4 million and decreased year over year. The downfall was owing to lower volumes of intermodal, crude oil, U.S. grain exports and forest products. These factors resulted due to lower demand for freight services to move consumer goods and customer outages caused by Canadian wildfires, lower ancillary services, including container storage and lower fuel surcharge revenues as a result of lower fuel prices. These were partly offset by freight rate increases, the favorable translation impact of a weaker Canadian dollar and higher export volumes of Canadian grain.
Canadian National Railway Company Price, Consensus and EPS Surprise
Freight revenues (C$3,894 million), which contributed 95.9% to the top line, decreased 7% year over year. Freight revenues at the Petroleum and Chemicals; Forest products; and Intermodal segments fell 10%, 6%, and 26%, respectively. Revenues at the Metals and minerals; Coal; Grain and fertilizers; and Automotive segments increased 7%, 6%, 14% and 13%, respectively.
Carloads revenues fell 7% year over year. Segment-wise, carloads in Petroleum and chemicals; Forest products; and Intermodal fell 7%, 10%, and 17%, respectively. The same at Metals and minerals; Coal; Grain and fertilizers and Automotive grew by 5%, 2%, 7% and 7%, respectively.
Freight revenues per carload were almost in line with the year-ago reported quarter, while freight revenues per revenue ton-miles improved 1%.
Operating expenses fell by 5% year over year to C$2,457 million due to lower fuel prices, partly offset by higher labor and fringe benefits expenses, mainly driven by higher average headcount and general wage increases and the negative translation impact of a weaker Canadian dollar.
Adjusted operating ratio (defined as operating expenses as a percentage of revenues) was 60.6% in the second quarter of 2023, up from 59% in the year-ago reported quarter.
Liquidity
Canadian National generated free cash flow of C$1,100 million during the second quarter compared with the year-ago quarter’s C$997 million.
2023 Outlook
For 2023, Canadian National is updating its full-year outlook and now anticipates flat to slightly negative year-over-year growth in adjusted EPS (compared with the prior expectation of growth in the mid-single digits).
J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.
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Canadian National (CNI) Q2 Earnings & Revenues Lag Estimates
Canadian National Railway Company (CNI - Free Report) reported disappointing second-quarter 2023 results, wherein both earnings and revenues lagged the Zacks Consensus Estimate.
Quarterly earnings per share (EPS) of $1.31 (C$1.76) missed the Zacks Consensus Estimate of $1.37 and declined year over year.
Quarterly revenues of $3,020.5 million (C$4,057 million) missed the Zacks Consensus Estimate of $3,129.4 million and decreased year over year. The downfall was owing to lower volumes of intermodal, crude oil, U.S. grain exports and forest products. These factors resulted due to lower demand for freight services to move consumer goods and customer outages caused by Canadian wildfires, lower ancillary services, including container storage and lower fuel surcharge revenues as a result of lower fuel prices. These were partly offset by freight rate increases, the favorable translation impact of a weaker Canadian dollar and higher export volumes of Canadian grain.
Canadian National Railway Company Price, Consensus and EPS Surprise
Canadian National Railway Company price-consensus-eps-surprise-chart | Canadian National Railway Company Quote
Freight revenues (C$3,894 million), which contributed 95.9% to the top line, decreased 7% year over year. Freight revenues at the Petroleum and Chemicals; Forest products; and Intermodal segments fell 10%, 6%, and 26%, respectively. Revenues at the Metals and minerals; Coal; Grain and fertilizers; and Automotive segments increased 7%, 6%, 14% and 13%, respectively.
Carloads revenues fell 7% year over year. Segment-wise, carloads in Petroleum and chemicals; Forest products; and Intermodal fell 7%, 10%, and 17%, respectively. The same at Metals and minerals; Coal; Grain and fertilizers and Automotive grew by 5%, 2%, 7% and 7%, respectively.
Freight revenues per carload were almost in line with the year-ago reported quarter, while freight revenues per revenue ton-miles improved 1%.
Operating expenses fell by 5% year over year to C$2,457 million due to lower fuel prices, partly offset by higher labor and fringe benefits expenses, mainly driven by higher average headcount and general wage increases and the negative translation impact of a weaker Canadian dollar.
Adjusted operating ratio (defined as operating expenses as a percentage of revenues) was 60.6% in the second quarter of 2023, up from 59% in the year-ago reported quarter.
Liquidity
Canadian National generated free cash flow of C$1,100 million during the second quarter compared with the year-ago quarter’s C$997 million.
2023 Outlook
For 2023, Canadian National is updating its full-year outlook and now anticipates flat to slightly negative year-over-year growth in adjusted EPS (compared with the prior expectation of growth in the mid-single digits).
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) second-quarter 2023 EPS of $1.81 missed the Zacks Consensus Estimate of $1.97 and declined 25.2% year over year.
JBHT’s total operating revenues of $3,132.6 million also lagged the Zacks Consensus Estimate of $3,347.5 million and fell 18.4% year over year. The downfall was due to a decline in revenue per load of 24% in Integrated Capacity Solutions, 13% in Intermodal, 21% in Truckload and a 4% decline in productivity in Dedicated Capacity Solutions on the back of changes in customer rate, freight mix and lower fuel surcharge revenue.
Total operating revenues, excluding fuel surcharges, decreased 14% year over year.
Delta Air Lines (DAL - Free Report) reported better-than-expected revenues and EPS, driven by strong air-travel demand. DAL’s second-quarter 2023 EPS (excluding 16 cents from non-recurring items) of $2.68 comfortably beat the Zacks Consensus Estimate of $2.42. DAL reported EPS of $1.44 a year ago, dull compared to the current scenario, as air-travel demand was not so buoyant then.
DAL’s total revenues of $15,578 million beat the Zacks Consensus Estimate of $14,991.6 million. Total revenues increased 12.69% on a year-over-year basis, driven by higher air-travel demand.
United Airlines Holdings, Inc. (UAL - Free Report) reported second-quarter 2023 EPS of $5.03, which outpaced the Zacks Consensus Estimate of $3.99 and improved more than 100% year over year.
Operating revenues of $14,178 million beat the Zacks Consensus Estimate of $13,927.1 million. UAL’s revenues increased 17.1% year over year due to upbeat air-travel demand. The year-over-year increase in the top line was driven by a 20.1% rise in passenger revenues (accounting for 91.7% of the top line) to $13,002 million. Nearly 42 million passengers traveled on UAL flights in the second quarter.