MONTREAL - Canadian National Railway (TSX:CNR) (NYSE: CNI) reported a marginal beat on adjusted earnings per share (EPS) for the first quarter, while revenue saw a slight decline from the consensus estimate. Shares were down 1% in after-market trading.
The company announced an EPS of C$1.72, just C$0.01 higher than the analyst estimate of C$1.71. However, revenue for the quarter was reported at C$4.25 billion, falling short of the consensus estimate of C$4.28 billion.
Comparing year-over-year (YoY) figures, CN's revenue experienced a 1% decrease from C$4.313 billion in the first quarter of the previous year. The company's operating income also saw a 7% decline to C$1.546 billion, down from C$1.662 billion in the same period last year. Furthermore, the operating ratio worsened by 2.1 points to 63.6%.
Despite the mixed financial results, CN reaffirmed its 2024 outlook, projecting an approximate 10% growth in adjusted diluted EPS and a capital investment of roughly C$3.5 billion, net of customer reimbursements. The company also anticipates its return on invested capital (ROIC) to remain within the 15%-17% target range.
Looking beyond the current year, CN continues to aim for a compounded annual diluted EPS growth between 10%-15% over the 2024-2026 period. This growth expectation is based on anticipated volume increases outpacing the economy, pricing above rail inflation, and progressively improving efficiency, assuming a favorable economic environment.
Tracy Robinson, CN's President and Chief Executive Officer, expressed confidence in the company's performance and future prospects. "Our team of railroaders delivered to plan in the first quarter, and our scheduled operating model continued to enhance our service to customers. Looking forward, we are confident for 2024. We are seeing the expected improvements in the economy, and our CN-specific growth opportunities are materializing," Robinson said.
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