Posted by JM on October 20, 2021
Here is an excerpt from Canadian National Railway’s (CNR) recent quarterly earnings release October 19, 2021.
Earnings Report:
Q3 2021 Actual: 1.52
Q3 2021 Estimate: 1.43
Q4 2021 Estimate: 1.59
Canadian National Railway Company (CNR.TO) was up in Canada early Wednesday after the company on Tuesday said its third-quarter profit rose 71%, topping expectations, and announced the retirement of its chief executive.
The railway reported net income of C$1.69 billion in the period, or C$2.37 per share, up from C$985 million, or C$1.38, in the third quarter of 2020. Adjusted profit, which excludes most one-time items, rose 9.5% to C$1.08 billion, or C$1.52 per share, besting the consensus analyst estimate for the measure of a C$1.42 per share adjusted profit, according to Capital IQ.
Revenue rose 5.3% to C$3.59 billion “mainly due to freight rate increases, higher applicable fuel surcharge rates, and an increase in intermodal ancillary services”.
CN’s operating ratio, a closely watched efficiency measure for which lower is better, rose 1.8 percentage points to 62.7%, and down 0.9 percentage points to 59% on an adjusted basis.
The company, which is in the midst of a proxy battle with shareholders disgruntled by its failed US$33-billion bid for the Kansas City Southern (KSU) railroad, said chief executive J.J. Ruest will retire at the end of January and the company is launching a search for a replacement. Replacing Ruest was one of the goals of the disgruntled group.
It appears that any opportunity to purchase this good dividend grower at a sensible price have dwindled in the short term with the release of their Q3 earnings report and CEO change. Investors like the news and the price is now at an all-time high with an earnings yield of just 3.55%.
