What's in Store for Canadian National (CNI) in Q2 Earnings?

Core Viewpoint - Canadian National Railway (CNI) is facing challenges in its earnings performance, with a history of mixed earnings surprises and a decline in freight revenues due to excess capacity and supply chain issues [1][2][10]. Financial Performance - CNI's first-quarter 2024 revenues were reported at $3.15 billion (C$4.25 billion), missing the Zacks Consensus Estimate of $3.16 billion, reflecting a decrease of 1.19% primarily due to lower freight revenue per RTM, while volumes remained flat [5][11]. - The earnings for the first quarter of 2024 were $1.28 per share (C$1.72), surpassing the Zacks Consensus Estimate of $1.27, but this represented a year-over-year decline of 5.19% [11]. Future Outlook - The Zacks Consensus Estimate for CNI's upcoming second-quarter earnings has been revised downward by 1.39% to $1.42 per share, with revenue expectations set at $3.23 billion, indicating a growth of 6.93% from the previous year [8]. - Freight revenues are estimated at $4.1 billion, reflecting a 0.5% decrease compared to the first quarter of 2024, with expected declines in the Petroleum and Chemicals, Metals & Minerals, and Forest Products segments by 6%, 3.5%, and 1.7% respectively [9]. Cost Management - To counteract the revenue decline from the freight downturn, CNI is focusing on cost-cutting measures, with an estimated 4.2% decline in adjusted operating expenses compared to the first quarter of 2024 [3].