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Canadian National Railway Co CNI

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Capital Allocation


Canadian National’s Q3 Carloads Down on Grain and Automotive, but Margin Outlook Reiterated

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Wide-moat rail Canadian National’s third-quarter top line grew 9% year over year, excluding foreign exchange, driven by core yield improvement, higher intermodal ancillary fees, and rising fuel surcharges. Revenue growth was mostly in line with our expected run rate as higher-than-expected average revenue per carload offset softer intermodal loads. Total carload volume swung to a 1% year-over-year decline, versus the 14% rise posted in the second quarter, but adjusting for foreign exchange, average revenue per carload jumped 10% (it was up 7% last quarter). Improvement stems in part from solid same store pricing and higher fuel surcharges. Core pricing continues to benefit from limited capacity across most transportation modes, including the rails, and should persist.

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Company Profile

Business Description

Canadian National's railway spans Canada from coast to coast and extends through Chicago to the Gulf of Mexico. In 2019, CN delivered almost 6 million carloads over its 19,600 miles of track. CN generated roughly CAD 14 billion in total revenue by hauling intermodal containers (25% of consolidated revenue), petroleum and chemicals (21%), grain and fertilizers (16%), forest products (12%), metals and mining (11%), automotive shipments (6%), and coal (4%). Other items constitute the remaining revenue.

935 de La Gauchetiere Street West
Montreal, QC, H3B 2M9, Canada
T +1 514 399-7091
Sector Industrials
Industry Railroads
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 23,765