CN reports lower revenue, income in Q2

CN yesterday reported second-quarter 2023 revenue of CA$4 billion, down 7%, and operating income of CA$1.6 billion, down 10%, compared with the same quarter a year ago.

The Class I posted diluted earnings per share (EPS) of CA$1.76, a decrease of 8%, or a decrease of 9% compared to an adjusted EPS in Q2 2022. The Q2 operating ratio came in at 60.6%, an increase of 1.3 points or an increase of 1.6 points on an adjusted basis.

The railroad’s focus on scheduled railroading has resulted in year-over-year improvements in car velocity, train speed and through dwell, CN officials said in a press release.

"CN’s disciplined approach to scheduled railroading continues to deliver for our customers. As volumes evolve, we will continue to refine our plan to optimize efficiency and drive further improvements to customer service,” said President and CEO Tracy Robinson.

Q2 operating performance results included:

• an injury frequency rate of 1.00 (per 200,000 person hours), an improvement of 17%, and accident rate of 1.91 (per million train miles), a deterioration of 5%;
• through dwell of 6.8 (entire railroad, hours), an improvement of 6%;
• car velocity of 216 (car miles per day), an improvement of 3%;
• through network train speed of 19.9 (mph), an improvement of 3%;
• train length of 7,934 feet, a decrease of 6%; and
• revenue ton miles of 55,877 (million), a decrease of 8%.

"Our goal to accelerate sustainable, profitable growth through 2026 and beyond remains on track," Robinson said.

In light of the Q2 results and revised expectation of weaker than anticipated volumes in the second half of 2023, CN updated its full-year outlook and now expects flat to slightly negative year-over-year growth in adjusted diluted EPS in 2023.