Yahoo Finance Canadian National (CNI) Stock Down 2.5% on Q4 Earnings Miss
Canadian National Railway Company CNI stock has declined 2.5% since its fourth-quarter 2022 earnings release on Jan 24. The downfall can be attributed to lower-than-expected earnings performance.
Quarterly earnings of $1.55 per share (C$2.10) missed the Zacks Consensus Estimate of $1.56 and improved 13.97% year over year.
Quarterly revenues of $3,345.7 million (C$4,542 million) outperformed the Zacks Consensus Estimate of $3,326.1 million and increased year over year. The uptick was driven by higher fuel surcharge revenues, freight rate increases, higher volumes of Canadian grain and the positive translation impact of a weaker Canadian dollar.
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$4,400 million), which contributed 96.8% to the top line, increased 23% year over year. Freight revenues at the Petroleum and Chemicals; Metals and minerals; Forest products; Coal; Grain and fertilizers; Intermodal; and Automotive segments increased 5%, 27%, 19%, 42%, 48%, 13% and 48%, respectively.
Carloads revenue ton-miles (RTMs) grew 6%. Segment-wise, carloads in Petroleum and chemicals; Metals and minerals; Coal; Grain and fertilizers and Automotive grew 1%, 3%, 25%, 21% and 15%, respectively. The same at Forest products and Intermodal decreased by 1% and 7%, respectively.
Freight revenues per carload climbed 20% year over year in the reported quarter, while freight revenues per RTM improved 15%.
Operating expenses grew by 20% year over year to C$2,630 million due to higher fuel prices and the negative translation impact of a weaker Canadian dollar.
Adjusted operating income increased 21.1% year over year to C$1,912 million. Adjusted operating ratio (defined as operating expenses as a percentage of revenues) came in at 57.9% in the fourth quarter of 2022, in line with the year-ago reported quarter.
Liquidity
Canadian National generated a free cash flow of C$1,335 million during the fourth quarter compared with the year-ago quarter’s C$1,262 million.
CNI’s board of directors has declared a dividend hike of 8%, effective from the first quarter of 2023. This marks the 27th consecutive year of dividend increase.
2023 Outlook
Canadian National anticipates to deliver earnings growth in the low single-digit range due to a softer economic outlook.
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.
Performance of Other Transportation Companies
United Airlines’ UAL fourth-quarter 2022 earnings of $2.46 per share beat the Zacks Consensus Estimate of $2.07. In the year-ago quarter, UAL incurred a loss of $1.60 per share when air-travel demand was not as buoyant as in the current scenario. The fourth quarter of 2022 was the third consecutive profitable quarter at UAL since the onset of the pandemic.
Operating revenues of $12,400 million beat the Zacks Consensus Estimate of $12,230 million. UAL’s revenues increased 51.37% year over year owing to upbeat air-travel demand. The optimistic air-travel demand scenario is also evident from the fact that total operating revenues increased 13.9% from fourth-quarter 2019 (pre-coronavirus) levels.
Delta Air Lines’ DAL fourth-quarter 2022 earnings (excluding 19 cents from non-recurring items) of $1.48 per share beat the Zacks Consensus Estimate of $1.29 per share. DAL reported earnings of 22 cents per share a year ago, dull in comparison to the current scenario, as air-travel demand was not so buoyant then.
DAL reported revenues of $13,435 million, which also surpassed the Zacks Consensus Estimate of $13,030.3 million. Driven by the high air-travel demand, total revenues increased more than 41.87% on a year-over-year basis.
J.B. Hunt Transport Services, Inc.’s JBHT fourth-quarter 2022 earnings of $1.92 per share missed the Zacks Consensus Estimate of $2.45 and declined 16% year over year.
JBHT’s total operating revenues of $3,649.62 million also lagged the Zacks Consensus Estimate of $3,796.8 million. The top line jumped 4.4% year over year. Total operating revenues, excluding fuel surcharges, fell 2.9% year over year.
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