CN reports mixed Q2 results

CN yesterday reported second-quarter 2024 revenue of C$4.3 billion, a 7% increase, and operating income of C$1.6 billion, a 3% decrease, compared with Q2 2023 results.

The Class I reported adjusted operating income rose 2% to C$1.6 billion. Diluted earnings per share (EPS) fell 1% to C$1.75, while the adjusted diluted EPS climbed 5% to C$1.84.

CN posted a Q2 operating ratio (OR) of 64%, compared with 60.6% a year ago, and an adjusted OR of 62.2% versus 60.6% a year ago.

The company reported Q2 revenue ton miles of 59,936 (millions), a year-over-year increase of 7%.

“I am encouraged by our quarterly volume gains, particularly our CN specific growth initiatives. 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," CN President and CEO Tracy Robinson said in a press release. "As we look forward, we are focused on the disciplined execution of our plan, delivering sustainable growth, and resolving labor uncertainty.”

Due to the threat of a potential labor strike, CN updated its 2024 guidance, and is now expected an adjusted diluted EPS growth in the mid to high single-digit range, compared to its April 23 expectation of approximately 10%. CN continues to expect to invest C$3.5 billion in its capital program.

CN is waiting for a decision from the Canada Industrial Relations Board on whether some shipments would be considered "essential services" in the event that the Teamsters Canada Rail Conference, which represents the railroad's conductors and engineers, initiates a strike.