MONTREAL – Canadian National expects traffic to bounce back this year due to a combination of an improving economy and the railway’s own growth projects, executives said today while announcing fourth-quarter results that included lower volume, revenue, and profits.
“Through 2023, our team of dedicated railroaders leveraged our scheduled operating model to deliver exceptional service for our customers and remained resilient in the face of numerous external challenges,” CEO Tracy Robinson says. “Looking forward, we are optimistic as CN specific growth initiatives are producing volumes. While economic uncertainty persists, we have the momentum to deliver sustainable profitable growth in 2024.”
For the fourth quarter, CN’s operating income declined 5%, to $1.8 billion, as revenue dropped 2%, to $4.4 billion. Earnings per share, adjusted for the impact of one-time items, declined 4% to $2.02. The operating ratio increased 1.4 points to 59.3%.
Quarterly volume declined 1.4% based on overall carloads, but increased by 2% when measured by revenue ton-miles, CN’s preferred metric.
CN volume strengthened as the quarter went on, with record potash shipments and growth in refined petroleum products and propane. International intermodal volume, which tanked during the West Coast dockworkers’ strike in July, is now back to pre-pandemic levels.
For this year, CN expects growth across its merchandise, bulk, and consumer products business segments. The railway’s financial outlook for 2024 includes 10% growth in earnings per share and $3.5 billion in capital expenses. CN will add sections of double-track on its Edson Subdivision west of Edmonton, Alberta, as well as on the former Elgin, Joliet & Eastern in the Chicago area.
CN’s key operating and safety metrics all improved during the fourth quarter.
Car velocity improved 4%, to 215 miles per day, a reflection of lower terminal dwell and flat train speeds. CN launched 89% of its trains on time during the quarter, a 5% improvement compared to a year ago, while 70% of trains arrived on time.
The employee injury rate improved 14% to a record low, while the train accident rate improved 29%.
