Canadian National Railway (TSE:CNR) reports Q4 revenues up 2%, earnings up 8%

Canadian National Railway Company (TSE:CNR, Mkt cap 71.05B, P/E 20.39, Div/yield 0.38/1.62, EPS 4.54, Shares 763.99M) has reported record earnings for the last quarter of 2016.

Canadian National Railway TSE:CNR Q4 revenues earnings up

Canadian National Railway (TSE:CNR) reports Q4 revenues up 2%, earnings up 8%

Announcing its Q4 and year-end results on Tuesday, the rail operator said that net income for the quarter grew 8% to C$1,018m, while diluted earnings per share (EPS) increased 12% to C$1.32, compared with C$1.18 in the fourth quarter of 2015.

Revenues for the three-month period were up 2% to C$3,217m as the company moved higher volumes of Canadian grains and U.S. soybeans, refined petroleum products, finished vehicles and petroleum coke. Overall, carloadings increased 3% and revenue ton-miles grew 4%.

For the full fiscal year, CN recorded a 3% increase in net income to C$3,640m, with diluted EPS up 6% to C$4.67.

Carloadings and revenue ton-miles in 2016 both declined by 5% and there was a corresponding 5% decline in revenues to C$12,037m.

CN president and CEO Luc Jobin commented: "Despite facing difficult winter conditions in December, CN delivered very strong fourth-quarter results and throughout 2016 demonstrated once again its ability to perform well in a mixed economic environment.

"We saw weaker volumes during the year, but quickly adjusted as our dedicated team of railroaders maintained its focus on operational efficiency, while continuing to provide quality service to our customers and improve our safety performance."

In 2017, CN expects earnings per share to grow in the mid-single-digit range compared with adjusted diluted EPS of C$4.59 in 2016.

"Overall, the economy remains challenging, but we remain optimistic and expect to see moderate volume growth in 2017," Jobin said.

CN's board of directors has approved a 10% increase in its quarterly cash dividend, taking the annualized dividend to C$1.65 per common share. A quarterly dividend of C$0.4125 per share will be paid on March 31, 2017, to shareholders of record at the close of business on March 10, 2017.

Canadian National Railway Company is engaged in the rail and related transportation business. The Company's network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico. The Company's freight includes approximately seven commodity groups, such as petroleum and chemicals, metals and minerals, forest products, coal, grain and fertilizers, intermodal and automotive. The petroleum and chemicals commodity group comprises various commodities, including chemicals and plastics, refined petroleum products, natural gas liquids, crude oil and sulfur. The metals and minerals commodity group consists primarily of materials related to oil and gas development, steel, iron ore, non-ferrous base metals and ores, construction materials and machinery, and dimensional loads. The forest products commodity group includes various types of lumber, panels, paper, wood pulp and other fibers. More from Reuters »

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Canadian National Railway (TSE-CNR) sees earnings fall after decline in shipments

Canadian National Railway Company (TSE-CNR, Mkt cap 64.74B, P/E 18.51, Div/yield 0.38/1.79, EPS 4.54, Shares 774.62M) has reported a drop in earnings for the second quarter but said that business should improve in the second half of the year, partly due to a big grain harvest in Canada.

Canadian National Railway TSE-CNR earnings decline shipments

Canadian National Railway (TSE-CNR) sees earnings fall after decline in shipments

The railway operator reported on Monday that its net income for the three months ended June 30, 2016 was C$858m, compared with C$886m for the same period last year. Diluted earnings per share (EPS) remained flat at C$1.10.

A decline in shipments led to revenues falling 9% to C$2.8bn. CN said that carloadings were down 12% year-on-year to 1.25 million and revenue ton-miles dropped 11%.

Luc Jobin, president and CEO, commented: “CN continued to face a very challenging volume environment in the second quarter and maintained strong discipline in realigning resources to keep them in line with reduced freight demand. Service remained solid, key operating metrics advanced, and we continued to improve our safety record. An important product of our cost-management and productivity focus was a record second-quarter operating ratio of 54.5%.

“We expect the second quarter to be the volume trough for the year. For the balance of 2016, we continue to expect some markets to remain strong, including lumber and panels, automotive, and refined petroleum products, and we anticipate a bumper grain crop in Canada. At the same time, international intermodal volumes are expected to remain challenging while shipments of commodities related to oil and gas development, such as crude oil, frac sand and drilling pipe, are expected to decrease relative to last year.”

As a result of these expectations, the company has maintained its April 25, 2016, financial guidance for 2016 EPS in line with last year’s adjusted diluted EPS of C$4.44.

Canadian National Railway Company is engaged in the rail and related transportation business. The Company’s network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico. The Company’s freight includes approximately seven commodity groups, such as petroleum and chemicals, metals and minerals, forest products, coal, grain and fertilizers, intermodal and automotive. The petroleum and chemicals commodity group comprises various commodities, including chemicals and plastics, refined petroleum products, natural gas liquids, crude oil and sulfur. The metals and minerals commodity group consists primarily of materials related to oil and gas development, steel, iron ore, non-ferrous base metals and ores, construction materials and machinery, and dimensional loads. The forest products commodity group includes various types of lumber, panels, paper, wood pulp and other fibers. More from Reuters »

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Stockwatch – Canadian National Railway Told To “Up Their Game” Following Fine

The Canadian federal government has told Canadian National Railway Company (TSE:CNR, Mkt cap 64.27B, P/E 23.35, Div/yield 0.25/1.27, EPS 3.37, Shares 816.38M) to “up their game” after imposing a fine on the Montreal-based company for failing to comply with an order that requires it to move a minimum amount of grain each week.

The Globe and Mail reported last week that Agriculture Minister Gerry Ritz’s warning comes in response to a call from CN chief executive officer Claude Mongeau to lower the grain shipment minimum to allow the railroad to comply with the order.

Stockwatch - Canadian National Railway fine

Stockwatch – Canadian National Railway told to “up their game” following fine.

Mongeau said that the company has not had enough demand from grain shippers to meet the minimum weekly volumes the government ordered in the spring.

Ritz, speaking from India on a conference call with reporters, however, dismissed the company’s claims that demand from grain shippers is insufficient, highlighting the “some 27,000 cars and some 6,000 producer cars that are ordered that have not been spotted yet by CN.”

The fine is the first levelled under the Fair Rail for Grain Farmers Act, which was set out in the spring to address agriculture industry complaints that the country’s two major railways were providing an inadequate service that left traders unable to meet demand from buyers and farmers facing cash shortages.

The federal government in the spring ordered CN and Canadian Pacific Railway Ltd. to each move 536,250 tonnes of wheat, canola and other grain each week or face a fine of $100,000.

Mr. Ritz said the severity of the penalty in the case of CN has not yet been decided. According to the original text of the act, railways would face “maximum penalties of $100,000 a day” for failing to handle 500,000 tonnes of grain each week for the next 90 days (beginning April 1,) When the act was extended in August, the fine was reduced to up to $100,000 “per violation,” which the government now says means per week.

CN spokesman Mark Hallman, however, said any penalties levied against the company in connection with its transportation of Western Canadian grain would be unfounded, saying that the railway has actually exceeded the government’s minimum target by more than one million tonnes since the spring.

CN’s net income grew by 21.54%, year over year, to $1.03 per share during the most recently completed quarter. This was among the strongest growth seen by any company in this industry.

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.

 

Canadian National Railway to Increase Dividend

Canadian National Railway Company Ends Q4 With Stronger Results Despite Harsh Winter

Canadian National Railway Company (TSE:CNR, Market cap 49.27B, P/E 19.21, Div/yield 0.25/1.69, EPS 3.09,Shares outstanding 830.52M,) the country’s top railway operator, ended its fourth quarter on a high note. Earnings were just short of analysts’ forecasts as the harsh winter weather took its toll on operations in December. The company’s volumes and revenues for the full year touched record-high levels. It also announced a 16% increase in its quarterly dividend amid expectations for further growth in 2014.

Canadian National Railway fourth quarter analysts' forecasts harsh winter weather operations December

Canadian National Railway ended its fourth quarter on a high note, with earnings just short of analysts’ forecasts as the harsh winter weather took its toll on operations in December.

The railway’s quarterly net income improved to C$635 million, or C$0.76 per diluted share, from C$610 million or C$0.71 per share the previous year. For the whole of 2013 the company earned C$2.6 billion, or C$3.09 per diluted share, up from a profit of C$2.68 billion or $3.06 per share in 2012.

Revenues generated in the quarter to December advanced 8.3% to C$2.745 billion, bringing the 2013 figure to C$10.57 billion, up 7%.

The railway’s chief executive, Claude Mongeau, commented that most of its network had been severely impacted by the extreme weather conditions this winter, which made it impossible for the company to meet the underlying demand. Nevertheless, the results proved to be “solid” and the fourth quarter was a “good finish” to the year, he said during a conference call.

The company said it would stick to its previous guidance for double-digit growth in its adjusted diluted earnings per share (EPS) this year, expecting the figure to be above the C$3.06 recorded in 2013, and for free cash flow of between C$1.6 billion and C$1.7 billion. The railway also announced plans for capital expenditure of C$2.1 billion this year, up from C$2 billion in 2013.

Talks with CNR’s union representing the conductors have not been resolved and a strike is more likely given labour’s desire to participate in the recent improvements in the company’s profitability.  The stock has appreciated significantly in the past year.  We would not be buyers at current levels.

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The opinions expressed here are ours alone. They are provided for information purposes only and are not tailored to the needs of any particular individual or company, are not an endorsement, recommendation, or sponsorship of any entity or security, and do not constitute investment advice. We strongly recommend that you seek advice from a qualified investment advisor before making any investment decision.