Posted by JM on July 20, 2021
Here is an excerpt from Canadian National Railway’s (CNR) recent quarterly earnings release July 20, 2021.
Earnings Report:
Q2 2021 Estimate: 1.50
Q2 2021 Actual: 1.49
Q3 2021 Estimate: 1.56
Canadian National Railway (CNR.TO) on Tuesday said its second-quarter profit rose 90% on higher revenue and lower costs, as it offered little additional detail on its US$33.6-billion offer for the Kansas City Southern Railroad (KSU).
The railway said it earned C$1.03 billion, or C$1.46 per share, in the period, up from C$545 million, or C$0.77, in the second quarter of 2020, which included a C$486 million charge. Adjusted profit, which excludes most one-time items, rose 17% to C$1.06 billion, or C$1.49, just topping the average analyst estimate for the measure of C$1.48 per share, according to Capital IQ.
Revenue rose 12% to C$3.6 billion, while the company’s operating ratio, an efficiency measure where lower is better, dropped to 61.6% from 75.5%, or 61.6% from 60.4% on an adjusted basis.
The company said the rise in its profit came as freight volumes continue to improve from pandemic lows, as revenue-traffic miles rose by 13%.
Canadian National did not offer any additional detail on offer for Kansas City Southern Railroad, which is awaiting regulatory approval from the U.S. Surface Transportation Board. The offer topped a bid from rival Canadian Pacific Railway (CP.TO).
“We enter the second half of 2021 focused on executing for our customers and leveraging our strong network performance to safely and sustainably drive long-term value creation for all of our stakeholders. Our proposed combination with Kansas City Southern has received overwhelming support from a broad base of stakeholders because it will enhance competition and drive economic growth in North America. We are confident in our ability to obtain the necessary approvals and successfully close this pro-competitive combination,” chief executive J.J. Ruest said in a release.
The railway also reiterated 2021 guidance for double-digit growth in its earnings per shares.
Canadian National shares closed up C$0.54 to C$129.79 on the Toronto Stock Exchange.
Source: MT Newswires
CNR is as good as it gets when it comes to quality dividend growers in Canada. With a dividend growth streak of 25 years, Value Line Safety Rating of 1, Value Line Financial Rating of ‘A’ and a S&P Rating of ‘A ‘, only the largest Canadian Banks are rated higher. The trouble with CNR is purchasing it at a sensible price. We will be monitoring this company closely should any issues with the merger with Kansas City Southern provide a buying opportunity for our Magic Pants Canadian Portfolio.
