MONTREAL - Canadian National Railway (TSX:CNR) (NYSE: CNI) reported a dip in its stock price by 3.57% after the company released its second-quarter financial results, which fell short of analyst expectations.
The railway giant posted adjusted earnings per share (EPS) of C$1.84, missing the analyst consensus of C$1.93. Revenue for the quarter was C$4.33 billion, also below the expected C$4.39 billion.
The company's revenue reflected a 7% increase compared to the same quarter last year, indicating a positive trend in business growth.
Tracy Robinson, President and Chief Executive Officer, commented on the results, stating, "I am encouraged by our quarterly volume gains, particularly our CN specific growth initiatives." Robinson also acknowledged transient challenges in the Western Region and ongoing labor uncertainty as factors impacting costs and traffic diversions.
Looking ahead, CN has updated its 2024 guidance, now expecting adjusted diluted EPS growth in the mid to high single-digit range, a downward revision from its previous forecast of approximately 10%. The company reiterated its longer-term financial perspective, targeting compounded annual diluted EPS growth of 10%-15% over the 2024-2026 period, assuming a supportive economy.
Despite the revenue increase and volume gains, the company's operating income decreased by 3%, and the operating ratio, a key measure of efficiency, worsened by 3.4 points. The adjusted operating ratio saw a smaller increase of 1.6 points.
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