Canadian National Railway Earnings: Here’s Why Shares are Up Now

Canadian National Railway Company (NYSE:CNI) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 0.04%.

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Canadian National Railway Company Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 3.39% to $1.22 in the quarter versus EPS of $1.18 in the year-earlier quarter.

Revenue: Rose 4.96% to $2.47 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Canadian National Railway Company reported adjusted EPS income of $1.22 per share. By that measure, the company beat the mean analyst estimate of $1.21. It missed the average revenue estimate of $2.49 billion.

Quoting Management: Claude Mongeau, president and chief executive officer, said: “CN faced a number of operational challenges in the first quarter, including extreme cold and heavy snow in Western Canada, which hampered operations, congested the network and constrained volume growth. We’ve turned the corner since then, improving train velocity and reducing freight car dwell times in yards across the network to restore the service level expected by our customers.
“CN will emerge stronger from this first-quarter experience. To improve network resilience, particularly given our expectation of continued strong volume growth, CN is undertaking several capacity enhancement projects in its Edmonton-Winnipeg corridor. These and other productivity initiatives will increase CN’s planned 2013 capital spending to C$2 billion, an increase of C$100 million over our original 2013 plan.”

Key Stats (on next page)…

Revenue increased 0.94% from $2.44 billion in the previous quarter. EPS decreased 13.48% from $1.41 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $1.63 to a profit $1.62. For the current year, the average estimate has moved down from a profit of $6.16 to a profit of $6.12 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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