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Canadian National's (CNI) Q2 Earnings Meet Estimates, Down Y/Y
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Canadian National Railway Company’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) meet the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year.
Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and declined 21.8% year over year. The downtick was primarily caused by COVID-19-induced lower volumes across most commodity groups and lower fuel surcharge rates.
Lackluster freight demand also had a negative impact on the top line. Freight revenues, which contributed 94.7% to the top line, fell 19.2% year over year. On a year-over-year basis, freight revenues declined across all segments. Freight revenues in Petroleum and Chemicals, Metals and Minerals, Forest Products and Coal segment declined 25%, 30%, 15% and 21%, respectively. Moreover, the same also declined in the Automotive (72%) and Intermodal segment (12%). Nevertheless, revenues in the Grain and Fertilizers segment inched up 1%.
While overall carloads declined 15.9% year over year, revenue ton miles (RTMs) slipped 18.4%. Segment-wise, carloads declined in the Petroleum and Chemicals, Metals and Minerals, Forest Products, Coal and Grain and Fertilizers segment by 25%, 19%, 17%, 21% an 3%, respectively. The metric also fell in the Automotive and Intermodal segment by 72% and 8%, respectively. Moreover, freight revenue per carload dropped 3.9% in the reported quarter. Freight revenue per RTM also fell 1%.
Operating expenses for the second quarter rose 6% to C$2,424 million, primarily due to loss on assets held for sale. Adjusted operating income declined 24% year over year to C$1,271 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) deteriorated to 60.4% from the year-ago quarter’s figure of 57.5%. Notably, a smaller value of the metric is desirable.
Canadian National Railway Company Price, Consensus and EPS Surprise
This Zacks Rank #2 (Buy) company exited the June end quarter with cash and cash equivalents of C$375 million compared with the C$64 million recorded at the end of 2019. The company generated free cash flow of C$1,008 during the second quarter of 2020 compared with the year-ago quarter’s C$513 million. Long-term debt amounted to C$13,107 million as of Jun 30, 2020 compared with C$11,866 million at 2019-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dividend
The company's board maintains its quarterly dividend at C$0.575, which will be paid out on Sep 30 to shareholders of record at the close of business on Sep 9.
Sectorial Snapshot
Apart from Canadian National, let’s take a look into some other Zacks Transportation sector’s second-quarter earnings like Delta Air Lines (DAL - Free Report) , Kansas City Southern and J.B. Hunt Transport Services (JBHT - Free Report) .
Delta Air Lines incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the June quarter tanked 88.3% to $1,468 million but surpassed the Zacks Consensus Estimate of $1,400.8 million.
Kansas City Southern’s second-quarter 2020 earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. However, the bottom line declined approximately 30% year over year due to decline in demand induced by the coronavirus. Meanwhile, quarterly revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million. Moreover, the top line fell 23% year over year due to weak volumes.
J.B. Hunt’s second-quarter 2020 earnings of $1.14 per share surpassed the Zacks Consensus Estimate by 31 cents. The bottom line, however, declined 16.8% year over year due to the disappointing performance of its intermodal (JBI) unit. Moreover, total operating revenues declined 5.1% to $2,145.6 million. Nevertheless, revenues beat the consensus mark of $2,060.9 million.
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Canadian National's (CNI) Q2 Earnings Meet Estimates, Down Y/Y
Canadian National Railway Company’s (CNI - Free Report) second-quarter 2020 earnings (excluding 36 cents from non-recurring items) of 92 cents per share (C$0.77) meet the Zacks Consensus Estimate. However, the bottom line declined 28.7% year over year.
Quarterly revenues of $2,315 million (C$3,209 million) missed the Zacks Consensus Estimate of $2,407.6 million and declined 21.8% year over year. The downtick was primarily caused by COVID-19-induced lower volumes across most commodity groups and lower fuel surcharge rates.
Lackluster freight demand also had a negative impact on the top line. Freight revenues, which contributed 94.7% to the top line, fell 19.2% year over year. On a year-over-year basis, freight revenues declined across all segments. Freight revenues in Petroleum and Chemicals, Metals and Minerals, Forest Products and Coal segment declined 25%, 30%, 15% and 21%, respectively. Moreover, the same also declined in the Automotive (72%) and Intermodal segment (12%). Nevertheless, revenues in the Grain and Fertilizers segment inched up 1%.
While overall carloads declined 15.9% year over year, revenue ton miles (RTMs) slipped 18.4%. Segment-wise, carloads declined in the Petroleum and Chemicals, Metals and Minerals, Forest Products, Coal and Grain and Fertilizers segment by 25%, 19%, 17%, 21% an 3%, respectively. The metric also fell in the Automotive and Intermodal segment by 72% and 8%, respectively. Moreover, freight revenue per carload dropped 3.9% in the reported quarter. Freight revenue per RTM also fell 1%.
Operating expenses for the second quarter rose 6% to C$2,424 million, primarily due to loss on assets held for sale. Adjusted operating income declined 24% year over year to C$1,271 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) deteriorated to 60.4% from the year-ago quarter’s figure of 57.5%. Notably, a smaller value of the metric is desirable.
Canadian National Railway Company Price, Consensus and EPS Surprise
Canadian National Railway Company price-consensus-eps-surprise-chart | Canadian National Railway Company Quote
Liquidity
This Zacks Rank #2 (Buy) company exited the June end quarter with cash and cash equivalents of C$375 million compared with the C$64 million recorded at the end of 2019. The company generated free cash flow of C$1,008 during the second quarter of 2020 compared with the year-ago quarter’s C$513 million. Long-term debt amounted to C$13,107 million as of Jun 30, 2020 compared with C$11,866 million at 2019-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dividend
The company's board maintains its quarterly dividend at C$0.575, which will be paid out on Sep 30 to shareholders of record at the close of business on Sep 9.
Sectorial Snapshot
Apart from Canadian National, let’s take a look into some other Zacks Transportation sector’s second-quarter earnings like Delta Air Lines (DAL - Free Report) , Kansas City Southern and J.B. Hunt Transport Services (JBHT - Free Report) .
Delta Air Lines incurred a loss (excluding $4.58 from non-recurring items) of $4.43 per share in the June quarter, wider than the Zacks Consensus Estimate of a loss of $3.97. Total revenues in the June quarter tanked 88.3% to $1,468 million but surpassed the Zacks Consensus Estimate of $1,400.8 million.
Kansas City Southern’s second-quarter 2020 earnings (excluding a penny from non-recurring items) of $1.15 per share beat the Zacks Consensus Estimate of $1.12. However, the bottom line declined approximately 30% year over year due to decline in demand induced by the coronavirus. Meanwhile, quarterly revenues of $547.9 million lagged the Zacks Consensus Estimate of $550.2 million. Moreover, the top line fell 23% year over year due to weak volumes.
J.B. Hunt’s second-quarter 2020 earnings of $1.14 per share surpassed the Zacks Consensus Estimate by 31 cents. The bottom line, however, declined 16.8% year over year due to the disappointing performance of its intermodal (JBI) unit. Moreover, total operating revenues declined 5.1% to $2,145.6 million. Nevertheless, revenues beat the consensus mark of $2,060.9 million.
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