Canadian National Railway Co - Stock Quote CNI

Wide-moat rail Canadian National's first-quarter top line grew 5%  year over year (ignoring foreign exchange), driven by solidly higher average yields (reflecting healthy core rate gains, higher fuel surcharges, and mix), as carload volume fell a disappointing 6%. Revenue growth fell short of our forecast (and likely consensus) due to winter weather disruption and incremental port-related intermodal headwinds, which hit carload activity hard, though yields outperformed on soaring fuel surcharges. CN's adjusted operating ratio (expenses/revenue) deteriorated 30 basis points, to 66.6%—worse than we anticipated because of incremental fuel surcharge lag and lost volume-related leverage.