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Canadian National Railway experienced an increase in revenue but a decline in earnings during the first quarter, the company reported April 26.
The Montreal-based railway posted net income of C$918 million, or $1.31 a diluted share, for the three months ending March 31. That compared with C$976 million, or $1.37, during the same time the previous year.
Total revenue increased by 5% to C$3.71 billion from C$3.54 billion.
“CN has an incredible tricoastal network, the best on the continent,” Canadian National CEO Tracy Robinson said. “Our team of experienced railroaders demonstrated resilience in the first quarter, managing through severe winter weather conditions and supply chain disruptions to deliver solid results.”
The results surpassed expectations by investment analysts on Wall Street, who had been looking for $1.08 per share and quarterly revenue of $2.9 billion, according to Zacks Consensus Estimate.
“I am encouraged by the cadence that we developed at the end of the quarter as we lifted out of winter operations,” Robinson said. “Looking ahead, our immediate focus is on restoring CN’s network to its full capacity and running a scheduled railroad with an emphasis on velocity. I am confident that we will have a strong year and deliver on our 2022 financial outlook.”
Canadian National attributed the revenue to strong demand overcoming significantly smaller grain crop, persistent global supply chain disruptions and challenging operating conditions. Revenue Ton Miles (RTM) was reduced by 8% year-over-year as a result of those factors. But freight revenue per RTM increased 15%.
Higher applicable fuel surcharge rates, freight rate increases, higher export volumes of coal via West Coast ports and higher export volumes of U.S. grain were partly offset by significantly lower export volumes of Canadian grain and lower international container traffic volumes via the ports of Vancouver and Prince Rupert.
The earnings report also noted operating expenses for the first quarter increased by 12% to C$2,481 million. This was mainly due to higher fuel costs as well as the recovery of the loss on assets held for sale recorded in the first quarter of 2021 resulting from the company entering into an agreement for the sale of noncore lines.
Intermodal revenue increased 9% during the quarter to $1.06 billion from $968 million last year. RTM decreased 11% to 13.6 billion from 15.2 billion. Carloads decreased 13% to 589,000 from 676,000 during the prior year.
Petroleum and chemicals revenue increased 14% to $756 million from $661 million. RTM increased 8% to 11.6 billion from 10.7 billion. Carloads increased 6% to 159,000 from 150,000 last year.
Metals and minerals revenue increased 10% to $406 million from $368 million last year. RTM decreased to 6.26 billion from 6.29 billion. Carloads decreased by 6% to 209,000 from 223,000 last year.
Forest products revenue decreased 1% to $426 million from $429 million last year. RTM decreased 13% to 5.82 billion from 6.67 billion. Carloads decreased 9% to 78,000 from 86,000 during the prior-year period.
Coal revenue increased 55% to $195 million from $126 million during the same time last year.
RTM increased 33% to 5.37 billion from 4.03 billion. Carloads increased 71% to 118,000 from 69,000 during the prior-year period.
Grain and fertilizers revenue decreased 15% to $604 million from $713 million last year. RTM decreased 25% to 13.4 billion from 17.8 billion during the same time the prior year. Carloads decreased 18% to 145,000 from 176,000 last year.
Automotive revenue increased 4% to $165 million from $158.4 million the prior year. RTM decreased 3% to 638 million from 659 million over that same time. Carloads decreased 6% to 48,000 from 51,000.
Canadian National ranks No. 19 on the Transport Topics Top 50 Global Freight carriers list.
