CN posts lower revenue, profit in Q3

CN yesterday reported third-quarter 2023 revenue of CA$4 billion, down 12%, and net income of CA$1.1 billion, down 24%, compared with the same period a year ago.

The company reported diluted earnings per share for the quarter fell 21% to CA$1.69. Operating income declined 21% to CA$1.5 billion compared to Q3 2022 results, according to a CN press release.

CN attributed the revenue decrease mainly to lower fuel surcharge revenue as a result of lower fuel prices; lower volumes of intermodal, crude oil and forest products, primarily as a result of lower demand for freight services to move consumer goods; and the impact of the Pacific Coast dock workers strike.

In addition, CN attributed the lower revenue to unfavorable crude oil price spreads and weaker market conditions for lumber and panels, as well as lower ancillary services including container storage; partly offset by freight rate increases, higher volumes of Canadian grain and potash and the positive translation impact of a weaker Canadian dollar.

CN posted an operating ratio of 62% for the quarter, up from 61.3% for the same period a year ago.

Operating performance for Q3 2023 included the following compared to Q3 2022:
• Revenue ton miles of 55,640 (millions), a decrease of 5%;
• Train length of 7,927 feet, a decrease of 3%;
• Through dwell of 7.1 (entire railroad, hours), a deterioration of 1%;
• Car velocity of 209 (car miles per day), a deterioration of 1%;
• Through network train speed of 19.7 mph, a deterioration of 2%; and
• Fuel efficiency of 0.832 (U.S. gallons of locomotive fuel consumed per 1,000 gross ton miles), an improvement of 1%.

"Our 'Make the Plan, Run the Plan, Sell the Plan' approach continued to perform well, delivering strong customer service despite weak consumer demand as well as external challenges," said President and CEO Tracy Robinson. "As volumes continue to improve, we are well positioned to deliver incremental operating leverage. We remain confident in our ability to accelerate sustainable, profitable growth in 2024 through 2026.” 

To learn more about CN's operating plan, click here to read the cover story in Progressive Railroading's October issue.