Revenue was unchanged for 2020’s first quarter despite blockades and of course the COVID-19 outbreak. Still, effective cost-cutting and improved efficiencies contributed to 2.6% earnings growth.
Moreover, record grain shipments in May bode well the earnings in the second quarter—despite COVID-19 shutdowns.
CANADIAN NATIONAL RAILWAY CO. (Toronto symbol CNR; www.cn.ca) operates Canada’s largest railway. Its 32,200-kilometre network stretches across the country. It also travels down through the U.S. Midwest, connecting Canada to the Gulf of Mexico.
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The company shipped 2.52 million metric tonnes of Western Canadian grain in May 2020. That beat the previous May record of 2.40 million tonnes in 2014. The higher grain shipments are mainly because bad weather delayed last year’s crop harvest.
With the March 2020 payment, the company increased your quarterly dividend by 7.0%, to $0.575 a share from $0.5375. The new annual rate of $2.30 yields 1.8%.
CN reported stronger-than-expected results for the first quarter of 2020 despite blockades by First Nations protesters and the COVID-19 outbreak.
In the quarter, the company’s revenue was $3.55 billion, unchanged from a year earlier. That beat the consensus forecast of $3.47 billion.
Higher volumes of crude oil and grain offset lower shipments of automotive goods, forest products, coal and metals.
In response to COVID-19, CN has now idled 15% of its fleet and laid off 16% of its workers.
If you exclude costs related to those actions and other unusual items, the company’s overall earnings improved 2.6%, to $870 million from $848 million. Due to fewer shares outstanding, earnings per share gained 4.3%, to $1.22 from $1.17. That beat the consensus estimate of $1.11.
The higher earnings are partly due to CN’s strong focus on efficiency and lower fuel costs. The company’s operating ratio in the quarter improved to 65.7% from 67.2% a year earlier. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.)
To conserve cash, CN has suspended its share buyback plan. That will let it keep paying you regular dividends.
That quarterly payment to investors has, in fact, grown an average of 13.0% annually over the last 5 years. Its TSI Dividend Sustainability Rating is Highest.
The free Daily post you mention has CN’s revenue and profit for the quarter ended March 31, 2020. The new results you refer to came out this week – and we’ll be analyzing them for Successful Investor subscribers this week in the weekly Hotline.
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The Globe and Mail (July 22, 2020) reports a 19% drop in revenue and a drop in profit of 59% Please explain your data vs the CN CEO
The free Daily post you mention has CN’s revenue and profit for the quarter ended March 31, 2020. The new results you refer to came out this week – and we’ll be analyzing them for Successful Investor subscribers this week in the weekly Hotline.