Post Earnings Coverage as Canadian National Railway Posted Record Q1 Volumes and Revenues; Adjusted EPS Jumped 15%

Upcoming AWS Coverage on Kansas City Southern Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 27, 2017 / Active Wall St. announces its post-earnings coverage on Canadian National Railway Co. (NYSE: CNI). The Company announced its first quarter fiscal 2017 results on April 24, 2017. Canada's largest railroad raised its adjusted EPS outlook for fiscal year 2017 and also announced Q2 2017 dividend. Register with us now for your free membership at:

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One of Canadian National Railway's competitors within the Railroads space, Kansas City Southern (NYSE: KSU), released its financial results for Q1 2017 on Friday, April 21, 2017. AWS will be initiating a research report on Kansas City Southern in the coming days.

Today, AWS is promoting its earnings coverage on CNI; touching on KSU. Get our free coverage by signing up to:

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Earnings Reviewed

For the period ended March 31, 2017, CNR's revenues were C$3.21 billion, an increase of 8%, compared to revenue of C$2.96 billion for Q1 2016. The Company's growth in revenues was mainly attributable to higher volumes of Canadian and US grain, frac sand, coal exports, overseas intermodal traffic, and finished vehicles; freight rate increases; and higher applicable fuel surcharge rates.

For Q1 2017, CNR's revenue from coal surged 39% to C$129 million; grain and fertilizers revenue grew 16% on a y-o-y basis to C$607 million; metals and minerals revenue gained 18% to C$361 million; automotive revenue advanced 10% on a y-o-y basis to C$205 million; intermodal revenue grew 7% to C$742 million; and petroleum and chemicals grew by 1% y-o-y to C$584 million. The Company noted a 3% decline in revenues for forest products totaling at C$447 million.

During Q1 2017, CNR's Carloadings increased by 9% to 1,368 thousand, while rail freight revenue per carload decreased by 1% on a y-o-y basis to C$2,248. The Company's revenue ton-miles (RTMs), measuring the relative weight and distance of rail freight transported by CNR, surged 14% to C$59.78 billion from the year-earlier same quarter. The Company's Rail freight revenue per RTM decreased by 6% over the year-earlier comparable period to C$5.14, primarily driven by an increase in the average length of haul and the negative translation impact of a stronger Canadian dollar, partly offset by freight rate increases and higher applicable fuel surcharge rates.

CNR's operating expenses for Q1 2017 increased by 9% to C$1,903 million, primarily due to higher fuel prices and higher costs due to increased volumes of traffic, partly offset by the positive translation impact of a stronger Canadian dollar on US-dollar-denominated expenses. CNR's operating income increased 7% to C$1.30 billion. The Company posted operating ratio of 59.4% for the reported quarter, an increase of 0.5 basis point compared to the prior-year's same quarter, driven by higher fuel prices which accounted for an increase of 260 basis points.

For Q1 2017, CNR's net income surged 12% to C$884 million compared to net income of C$792 million for Q1 2017, while diluted EPS increased 16% to C$1.16 compared with the prior year's corresponding quarter diluted EPS of $1.00. The Company's adjusted net income increased 11% to C$879 million, with adjusted diluted EPS increasing 15% to C$1.15 in-line with Wall Street's estimates.

Cash Flow & Dividend Announcement

CNR's free cash flow was C$848 million in Q1 2017 up from C$584 million for the year-earlier comparable quarter, primarily attributed to higher cash generated from operating activities, lower cash taxes, and lower capital expenditures.

On April 24, 2017, CNR announced that its Board of Directors has approved a Q2 2017 dividend on the Company's common shares outstanding. A quarterly dividend of C$0.4125 per common share will be paid on June 30, 2017, to shareholders of record at the close of business on June 09, 2017.

Outlook

For the fiscal year, CNR is expecting volume growth of approximately 10% in terms of RTMs compared to 3% to 4% previously disclosed for the full year versus 2016, with overall pricing remaining above inflation. The Company also revised its adjusted EPS forecast in the range of C$4.95 to C$5.10 versus 2016 adjusted diluted EPS of C$4.59.

Stock Performance

At the closing bell, on Wednesday, April 26, 2017, Canadian National Railway's stock was slightly down by 0.97%, ending the trading session at $72.39. A total volume of 2.55 million shares were traded at the end of the day, which was higher than the 3-month average volume of 1.07 million shares. In the last six months and previous three months, shares of the Company have surged 11.35% and 3.87%, respectively. Moreover, the stock rallied 7.86% since the start of the year. The stock is trading at a PE ratio of 20.87 and has a dividend yield of 1.57%.

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