Canadian Natl Rail reports EPS in-line, beats on revs; lowers FY18 EPS, in-line
- Reports Q1 (Mar) earnings of CC$1.00 per share, excluding non-recurring items, in-linewith the Capital IQ Consensus of CC$1.00; revenues fell 0.4% year/year to CC$3.19 bln vs the CC$3.16 bln Capital IQ Consensus.
- Revenues declined for grain and fertilizers (11 per cent), forest products (six per cent), automotive (four per cent), petroleum and chemicals (three per cent), and other revenues (two per cent). Revenues increased for intermodal (10 per cent), coal (10 per cent), and metals and minerals (seven per cent). The decrease in revenues was mainly attributable to reduced RTMs resulting from challenging operating conditions, including harsh winter weather and low network resiliency, as well as the negative translation impact of a stronger Canadian dollar, partly offset by higher applicable fuel surcharge rates and freight rate increases.
- RTMs, measuring the relative weight and distance of rail freight transported by CN, declined by four per cent from the year-earlier quarter. Rail freight revenue per RTM increased by four per cent over the year-earlier period, mainly driven by favourable changes in traffic mix, a decrease in the average length of haul, higher applicable fuel surcharge rates and freight rate increases, partly offset by the negative translation impact of a stronger Canadian dollar.
- Co issues in-line guidance for FY18, lowers EPS to CAD$5.10-5.25 from $5.25-5.40 vs. C$5.14 Capital IQ Consensus Estimate. Due to weaker than expected RTMs in the first quarter and a longer than anticipated construction period needed for significant infrastructure capacity projects in 2018
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