(Source: CN press release, October 22, 2019)
MONTREAL — CN today reported its financial and operating results for the third quarter ended September 30, 2019.
“CN delivered strong results, despite a softening economy,” said JJ Ruest, president and chief executive officer of CN. “Our team of experienced railroaders swiftly aligned resources with the weaker demand to achieve solid efficiency gains. We remain committed to our long-term agenda of growing faster than the economy at low incremental cost, and to taking Scheduled Railroading to the next level by deploying advanced operating technology.”
Financial results highlights
Third-quarter 2019 compared to third-quarter 2018
• Revenues increased by four per cent, or C$142 million, to C$3,830 million.
• Diluted earnings per share (EPS) increased by eight per cent (or 11 per cent on an adjusted basis (1)) to C$1.66.
• Operating ratio of 57.9 per cent, an improvement of 1.6 points.
• Operating income increased by eight per cent, or C$121 million, to C$1,613 million.
• Strong balance sheet with adjusted debt-to-adjusted-EBITDA of less than 2.0X.
Revised 2019 financial outlook
In light of the deterioration in North American rail demand, as the economy continues to weaken, CN is now targeting to deliver 2019 adjusted diluted EPS growth in the high single-digit range this year versus last year’s adjusted diluted EPS of C$5.50 (1), compared with its July 23, 2019 financial outlook which called for low double-digit growth in adjusted diluted EPS; and now assumes slightly negative volume growth in 2019 in terms of revenue ton miles (RTMs).
Third-quarter 2019 revenues, traffic volumes and expenses
Revenues for the third quarter of 2019 were C$3,830 million, an increase of C$142 million or four per cent, when compared to the same period in 2018. The increase was mainly due to freight rate increases and higher intermodal revenues.
RTMs, measuring the relative weight and distance of freight transported by CN, declined by one per cent from the year-earlier period. Freight revenue per RTM increased by six per cent over the year-earlier period, mainly driven by freight rate increases and higher intermodal revenues.
Operating expenses for the third quarter increased by one per cent to C$2,217 million, mainly driven by increased purchased services and material expense, as well as higher depreciation and amortization expense; partly offset by lower fuel costs and record fuel productivity.
See link above for full press release.