CN reported its financial and operating results for the first quarter ended March 31, 2020.
Financial results highlights
First-quarter 2020 compared to first-quarter 2019
- Revenues of C$3,545 million remained flat.
- Diluted earnings per share (EPS) of C$1.42, an increase of 31 per cent, and adjusted diluted EPS of C$1.22, an increase of four per cent. (1)
- Operating ratio of 65.7 per cent, an improvement of 3.8 points (or 1.5 points on an adjusted basis). (1)
- Operating income of C$1,215 million, an increase of 13 per cent (or four per cent on an adjusted basis). (1)
The COVID-19 pandemic is having an unprecedented and extraordinary impact on the economy. The economic outlook, and therefore overall demand for transportation services, are highly correlated with the duration of containment measures and the impacts on businesses and consumers, which at this point remain uncertain. As a result, CN is withdrawing its 2020 financial guidance and 3-year targets provided at the 2019 Investor Day.
CN has a solid track record of resiliency in periods of economic weakness. The Company’s strong investment grade credit rating, top-tier amongst all companies and the best in the rail industry, has once again proven its strategic value, providing CN with robust low-cost liquidity. The Company will continue to pause share repurchases in these economic circumstances and will reassess on an ongoing basis.
While it is clear that no one can predict the ultimate impact of the current global economic environment, based on what we know today, the Company is still working to generate a minimum of approximately C$2.5 billion of free cash flow. (1)
CN is committed to maintaining its previously announced 2020 dividend increase of 7%.
First-quarter 2020 revenues, traffic volumes and expenses
Revenues for the first quarter of 2020 of C$3,545 million remained flat when compared to the same period in 2019. The inclusion of TransX within the domestic market of the intermodal commodity group, freight rate increases, higher volumes of petroleum crude and increased shipments of Canadian grain, were offset by lower volumes across all other commodity groups mostly due to the impacts of the illegal blockades in February 2020 and the COVID-19 pandemic in late March. Operating expenses for the first quarter decreased by five per cent to C$2,330 million, mainly driven by lower labor costs, depreciation expense and fuel expense.
-via Press Release