- Canadian railway operator CN (CNR) has reported an underwhelming third quarter performance as markets struggle to recover from the pandemic
- Net income for the three months ending September 30 fell 18 per cent compared to the same period last year, or C$210 million, to a total of $985 million
- Total revenue also fell 11 per cent, or $421 million, to just over $3.4 billion compared to last year’s total of $3.83 billion
- The decline was largely due to lower volumes across most commodity groups brought on by the COVID-19 pandemic, as well as lower applicable fuel surcharge rates
- With the economic unpredictability set to continue, the company declined to re-issue its full-year 2020 guidance, which was withdrawn in late April
- CN (CNR) is currently down 4.1 per cent to $140.92 per share at 10:54am EDT
Canadian railway operator CN (CNR) has reported an underwhelming third quarter performance as markets struggle to recover from the pandemic.
For the three months ending September 30, the Montreal-based company saw an 18 per cent – or C$210 million – drop in net income compared to the same period last year, from more than $1.19 billion to just $985 million.
This comes off the back of a similar decline in total revenue, which fell 11 per cent – or $421 million – to just over $3.4 billion from last year’s figure of $3.83 billion.
CN said this was largely due to lower volumes across most commodity groups brought on by the COVID-19 pandemic, as well as lower applicable fuel surcharge rates.
However, any further decline was partially offset by freight rate increases, including recent record-setting shipments of grain.
The COVID-19 pandemic also drove a decline in expenses for the period, primarily due to the implementation of the company’s multi-phase Pandemic Plan, which took effect in March.
This culminated in lower fuel and labor costs, as well as decreased purchased services and material expenses.
As a result, total expenses fell eight per cent – or $174 million – from almost $2.22 billion in the third quarter of last year to just over $2.04 billion this year.
Jean-Jacques Ruest, President and CEO of CN, said he remains confident in the company’s ability to deliver long-term shareholder value.
“As we look at the fourth quarter and beyond, we continue to see sequential improvements and momentum leading us to have a cautious optimism about the future,” he added.
With the continued uncertainty regarding the long-term impacts of the pandemic, CN elected not to re-issue its full-year 2020 guidance, which was withdrawn in late April.
CN (CNR) is currently down 4.1 per cent to $140.92 per share at 10:54am EDT.
