CN’s Robinson ‘Encouraged’ by 2Q24 Volume Gains Amid ‘Labor Uncertainty’
“Our team of railroaders has continued to deliver outstanding service to our customers despite some transient challenges on a key portion of our Western Region that impacted our costs, and traffic diversions due to ongoing labor uncertainty. As we look forward, we are focused on the disciplined execution of our plan, delivering sustainable growth, and resolving labor uncertainty,” Robinson added.
Among CN’s second-quarter 2024 results:
- Revenue ton miles (RTMs) of 59,936 (millions), an increase of 7%.
- Revenues of C$4,329 million, an increase of C$272 million, or 7%.
- Operating income of C$1,558 million, a decrease of C$42 million or 3% and adjusted operating income of C$1,636 million, an increase of C$36 million or 2%.
- Operating ratio, defined as operating expenses as a percentage of revenues, of 64.0%, an increase of 3.4-points and adjusted operating ratio of 62.2%, an increase of 1.6-points.
- Diluted earnings per share (EPS) of C$1.75, a decrease of 1% and adjusted diluted earnings per share of C$1.84, an increase of 5%.
Updated 2024 Guidance and Reiterated Long-Term Financial Outlook
Accounting for second-quarter 2024 results and the ongoing volume impact of the current labor uncertainty, CN says it “now expects to deliver adjusted diluted EPS growth in the mid to high single-digit range (compared to its April 23, 2024, expectation of approximately 10%). CN also “continues to expect to invest approximately C$3.5 billion in its capital program, net of amounts reimbursed by customers.” Additionally, CN now expects adjusted return on invested capital (ROIC) to be “approximately 15% (compared to its April 23, 2024, expectation to be within the targeted range of 15%-17%).”
“CN reiterates its longer-term financial perspective and continues to target compounded annual diluted EPS growth in the range of 10%-15% over the 2024-2026 period driven by growing volumes more than the economy, pricing above rail inflation and incrementally improving efficiency, all of which assumes a supportive economy,” the Class I reported. “CN continues to target ROIC in the range of 15%-17%.”
For more details, visit the CN Investors webpage.
