Noting “a challenging economic environment,” CN announced a “very solid” first-quarter performance for 2016.
First-quarter 2016 financial highlights
- Net income increased 13% to C$792 million, while diluted EPS increased 16% to C$1.00, compared with the first quarter of 2015.
- Operating income increased 14% to C$1.22 billion.
- Operating expenses declined 14% to C$1.75 billion.
- Operating ratio of 58.9%, an improvement of 6.8 points over the prior-year quarter.
- Free cash flow for first-quarter 2016 was C$584 million, up from C$521 million for the year-earlier quarter.
- Revenues decreased by 4% to C$2.96 billion. Carloadings declined 7% and revenue ton-miles declined 9%.
Illustrating continuing industry trends, “The decrease in revenues was mainly attributable to decreased shipments of energy-related commodities including crude oil, frac sand, drilling pipe and semi-finished steel products as a result of declining energy markets.” Specifically, declines of petroleum and chemicals (-10%), metals and minerals (-18%), and coal (-42%).
On the upside, revenues increased for automotive (18%), forest products (11%), and intermodal (1%).
Claude Mongeau, president and chief executive officer, headlined other points of the first-quarter: “We successfully aligned our resources with the reduced volume level to achieve strong efficiency gains, while continuing to offer superior customer service and significantly improving our safety performance. These achievements allowed the CN team to deliver record first-quarter financial results."
Read the full 1Q 2016 release HERE.