Canadian National Railway pany(US:CNI) ZACKSยท2025-05-05 14:10Core Viewpoint - Canadian National Railway Company (CNI) reported mixed financial results for the first quarter of 2025, with earnings per share exceeding estimates while revenues fell short of expectations and declined year-over-year [1][2]. Financial Performance - CNI's earnings for Q1 2025 were $1.29 per share (C$1.85), surpassing the Zacks Consensus Estimate of $1.26 and showing a 0.7% year-over-year improvement [1]. - Revenues for the same period were $3.06 billion (C$4.40 billion), missing the Zacks Consensus Estimate of $3.11 billion and declining by 2.6% year-over-year [1]. - Operating income grew by 4.1% compared to Q1 2024, while the operating ratio worsened slightly to 63.4% from 63.6% [3]. Revenue and Volume Metrics - Revenue ton-miles (RTMs) increased by 1% year-over-year, while carloads decreased by 2% [2]. - Freight revenue per RTM rose by 3% year-over-year [2]. - Freight revenues, which accounted for 97.3% of total revenues, increased by 4% year-over-year, with notable growth in petroleum and chemicals (7%), coal (11%), grain and fertilizers (11%), and automotive (1%) [4]. Segment Performance - Carloads in petroleum and chemicals, metals and minerals, forest products, and intermodal segments saw decreases of 1%, 11%, 6%, and 2%, respectively [5]. - In contrast, carloads in coal, grain and fertilizers, and automotive segments increased by 5%, 4%, and 2% year-over-year [5]. Liquidity and Capital Management - CNI ended Q1 2025 with cash and cash equivalents of C$232 million, down from C$389 million at the end of the previous quarter [6]. - Long-term debt decreased to C$18.9 billion from C$19.7 billion [6]. - CNI generated C$1.16 billion from operating activities, with free cash flow reported at C$626 million [6]. Share Repurchase Program - Under its current Normal Course Issuer Bid (NCIB), CNI may repurchase up to 20 million common shares from February 4, 2025, to February 3, 2026, but had not repurchased any shares as of March 31, 2025 [7]. - CNI repurchased 13.9 million common shares under its previous NCIB, including 0.6 million in Q1 2025 [7]. Outlook - For the full year 2025, CNI anticipates adjusted earnings per share (EPS) growth of 10%-15% and plans to invest approximately C$3.4 billion in its capital program [8]. - CNI expects slightly positive growth in North American industrial production in 2025, adjusting from a prior expectation of 1% [8]. - The company continues to project RTM growth in the low to mid-single-digit range and assumes the Canadian dollar will be valued at approximately $0.70 in U.S. currency [9]. Long-term Projections - CNI aims for compounded annual adjusted diluted EPS growth in the high single-digit range from 2024 to 2026 [10]. - The company continues to expect North American industrial production to increase by nearly 1% CAGR over the 2024-2026 period [11].