- Canadian National Rail (CNI -0.4%) reports challenging quarter but improving performance metrics. The decrease in revenues was mainly attributable to reduced RTMs resulting from challenging operating conditions.
- GMTs of 113M (-2.8% Y/Y), total RTMs of 57.2M (-4.3% Y/Y), operating expenses per GTM was C$1.91 (+11.7% Y/Y) & rail freight revenue per RTM of C$5.36 (+4.3% Y/Y).
- Operating ratio was 67.8%, higher 600 bps Y/Y, indicating slightly lower company efficiency; FCF generation of C$322M (-62% Y/Y), adjusted debt-to-adjusted EBITDA of 1.97x
- 6.5M common shares were repurchased, returning C$631M to its shareholders. CNI also paid quarterly dividend of C$0.4550/share.
- 2018 Outlook: Adjusted EPS of C$5.10-5.25; RTMs volume growth 2-4%; C$200M increase in capital spending program to C$3.4B of which ~C$400M will be going towards new track infrastructure in Western Canada to serve organic growth & improve resiliency which will lead to strong 2019 volume growth.
- Previously: Canadian National Railway EPS in-line, beats on revenue (April 23)
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