Canadian National Railway Co (CNI) Tops Q2 Views, Issues Solid Outlook

Canadian National Railway Co (NYSE: CNI) is trading up 1.5% after-hours after the company reported Q2 EPS of CDN$1.03, CDN$0.04 better than the analyst estimate of CDN$0.99. Revenue for the quarter came in at CDN$3.12 billion versus the consensus estimate of CDN$3.11 billion.

Claude Mongeau, president and chief executive officer, said: "CN recovered swiftly from the first-quarter winter weather challenges - just as our customers would expect us to do - thanks to solid execution by our dedicated team of railroaders. CN delivered record volumes in the quarter by bringing its key supply chains back into sync and taking advantage of continued strength in several of our core markets. This solid operational recovery underscores our ability to accommodate growth at low incremental cost and to drive very strong financial results."

CN's Western Canada grain hopper car movements were particularly strong during the second quarter, up nearly 70 per cent from the year-earlier period. The Company expects such hopper car movements for the crop-year ending July 31, 2014, to be a new record and close to 25 per cent higher than average crop-year movements.

Mongeau said: "We are pleased that the Canadian grain supply chain CN serves is now back in sync. Our wait-list of customer grain car orders represents only about one week of shipments from the Prairies, and grain vessel line-ups at all ports are back to normal."

Revised 2014 financial outlook (1) (2) CN's strong second-quarter results and continued growth opportunities in intermodal, bulk and merchandise markets have prompted a positive revision to the Company's 2014 financial outlook. Under its revised 2014 outlook, CN now expects to:

• Deliver solid double-digit EPS growth in 2014 over adjusted diluted 2013 EPS of C$3.06, compared with its earlier forecast of aiming for double-digit 2014 EPS growth, and
• Generate free cash flow in the range of C$1.8 billion to C$2 billion, compared with the earlier free cash flow projection of C$1.6 billion to C$1.7 billion for 2014.

Mongeau said: "The continuing success of our agenda of Operational and Service Excellence positions CN well to achieve this improved financial outlook for the year."

For earnings history and earnings-related data on Canadian National Railway Co (CNI) click here.

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