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Canadian National (CNI) Beats on Q1 Earnings & Revenues
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Canadian National Railway Company’s (CNI - Free Report) first-quarter 2017 earnings (on an adjusted basis) of 88 cents per share (or C$1.15) beat the Zacks Consensus Estimate of 84 cents. Adjusted earnings climbed 20.55% from the year-ago figure. The company’s bottom line benefited from better expense management.
Quarterly revenues of $2,428.9 million (C$3,206 million) came in above of the Zacks Consensus Estimate of $2,402.5 million but climbed 12.5% year over year. Rail freight revenues, which accounted for bulk of the top line in the quarter, improved 8%. The top line was boosted by increased volumes of grain, frac sand, coal exports, overseas intermodal traffic among other factors.
Operating Results
On a year-over-year basis, freight revenues increased in various segments, 39% at Coal, 1% at Petroleum and Chemicals, 7% at intermodal, 10% at automotive, and 16% each at Metals and Minerals, and grain and fertilizers. However, the same declined 3% at the forest products unit. Overall carloads (volumes) also improved 9% and revenue ton miles (RTMs) climbed 14% year over year. Rail freight revenue per carload declined by 1% in the reported quarter.
Moreover, the metals and minerals sub group performed most impressively with respect to car loads that improved 30%. In fact, the grain and fertilizer segment was the other unit to post a double-digit volume growth. However, coal volumes decreased 8%.
In the quarter under review, operating income climbed 7% year over year to C$1,303 million. Operating ratio (defined as operating expenses as a percentage of revenues) was 59.4% as against 58.9% in the year-ago quarter. Higher fuel costs contributed to the increase in this key metric.
Liquidity
Canadian National exited the first quarter with free cash flow of C$848 million compared with C$584 million a year ago. Adjusted debt at the end of the quarter was C$11,440 million compared with C$10,715 million a year ago.
Canadian National Railway Company Price and EPS Surprise
This Zacks Rank # 3 (Hold) company’s board of directors approved a its quarterly cash dividend of C$0.4125 per share (annualized C$1.65). The second-quarter dividend will be paid on Jun 30 to shareholders on record as of Jun 9. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook Tweaked
Canadian National now expects full-year 2017 earnings per share in the band of C$4.95 to C$5.10 (the earlier outlook had called for earnings per share in 2017 to grow in the mid-single-digit range over adjusted EPS of C$4.59 recorded in 2016). This Montreal-based company now expects to invest C$2.6 billion in 2017 pertaining to its capital program as opposed to C$2.5 billion expected earlier.
Upcoming Releases
Investors interested in the railroad space are also keenly waiting for first-quarter earnings reports from key players like Union Pacific Corporation (UNP - Free Report) , Norfolk Southern (NSC - Free Report) and Genesee & Wyoming Inc. . Norfolk Southern, Union Pacific and Genesee & Wyoming are scheduled to report on Apr 26, Apr 27 and May 2, respectively.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
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Canadian National (CNI) Beats on Q1 Earnings & Revenues
Canadian National Railway Company’s (CNI - Free Report) first-quarter 2017 earnings (on an adjusted basis) of 88 cents per share (or C$1.15) beat the Zacks Consensus Estimate of 84 cents. Adjusted earnings climbed 20.55% from the year-ago figure. The company’s bottom line benefited from better expense management.
Quarterly revenues of $2,428.9 million (C$3,206 million) came in above of the Zacks Consensus Estimate of $2,402.5 million but climbed 12.5% year over year. Rail freight revenues, which accounted for bulk of the top line in the quarter, improved 8%. The top line was boosted by increased volumes of grain, frac sand, coal exports, overseas intermodal traffic among other factors.
Operating Results
On a year-over-year basis, freight revenues increased in various segments, 39% at Coal, 1% at Petroleum and Chemicals, 7% at intermodal, 10% at automotive, and 16% each at Metals and Minerals, and grain and fertilizers. However, the same declined 3% at the forest products unit. Overall carloads (volumes) also improved 9% and revenue ton miles (RTMs) climbed 14% year over year. Rail freight revenue per carload declined by 1% in the reported quarter.
Moreover, the metals and minerals sub group performed most impressively with respect to car loads that improved 30%. In fact, the grain and fertilizer segment was the other unit to post a double-digit volume growth. However, coal volumes decreased 8%.
In the quarter under review, operating income climbed 7% year over year to C$1,303 million. Operating ratio (defined as operating expenses as a percentage of revenues) was 59.4% as against 58.9% in the year-ago quarter. Higher fuel costs contributed to the increase in this key metric.
Liquidity
Canadian National exited the first quarter with free cash flow of C$848 million compared with C$584 million a year ago. Adjusted debt at the end of the quarter was C$11,440 million compared with C$10,715 million a year ago.
Canadian National Railway Company Price and EPS Surprise
Canadian National Railway Company Price and EPS Surprise | Canadian National Railway Company Quote
Dividend
This Zacks Rank # 3 (Hold) company’s board of directors approved a its quarterly cash dividend of C$0.4125 per share (annualized C$1.65). The second-quarter dividend will be paid on Jun 30 to shareholders on record as of Jun 9. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Outlook Tweaked
Canadian National now expects full-year 2017 earnings per share in the band of C$4.95 to C$5.10 (the earlier outlook had called for earnings per share in 2017 to grow in the mid-single-digit range over adjusted EPS of C$4.59 recorded in 2016). This Montreal-based company now expects to invest C$2.6 billion in 2017 pertaining to its capital program as opposed to C$2.5 billion expected earlier.
Upcoming Releases
Investors interested in the railroad space are also keenly waiting for first-quarter earnings reports from key players like Union Pacific Corporation (UNP - Free Report) , Norfolk Southern (NSC - Free Report) and Genesee & Wyoming Inc. . Norfolk Southern, Union Pacific and Genesee & Wyoming are scheduled to report on Apr 26, Apr 27 and May 2, respectively.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>