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CN reports ‘strong’ Q1 performance, updates 2023 guidance

CN yesterday reported first-quarter 2023 revenue of CA$4.3 billion, a 16% increase, and operating income of CA$1.7 billion, a 35% increase compared with results reported in Q1 2022.

The Class I posted diluted earnings per share of CA$1.82, a 38% increase on an adjusted basis and a 39% increase on a reported basis.

The revenue gain for the quarter was mainly due to higher fuel surcharge revenue, higher export volumes of Canadian grain, freight rate increases and the positive translation impact of a weaker Canadian dollar, partly offset by lower intermodal volumes, CN officials said in a press release.

The company’s scheduled operating plan “demonstrated resiliency against Canadian winter conditions,” they said.

CN’s operating ratio in Q1 was 61.5%, a 5.1-point improvement from a year ago.

“We remain confident in our long-term growth despite current economic uncertainty. Our updated guidance reflects the strength of our scheduled operating model and its ability to drive strong operational results,” said President and CEO Tracy Robinson. “For the immediate future, we remain focused on running our plan and providing reliable service to our customers.”

Also for Q1 2023, CN logged:

• an injury frequency rate of 1.02 (per 200,000 person hours), an improvement of 17%, and an accident rate of 1.64 (per million train miles), an improvement of 41%;

• car velocity of 211 car miles per day, an improvement of 29%;

• through-network train speed of 20.1 mph, an improvement of 20%;

• record Q1 through dwell of 7.1 (entire railroad, hours), an improvement of 22%; and

• record Q1 fuel efficiency of 0.902 (U.S. gallons of locomotive fuel consumed per 1,000 gross ton miles), an improvement of 1%.

As a result of the strength of Q1 results, the Class I expects to deliver adjusted diluted EPS growth in the mid-single digits over 2022, CN officials said.