Canadian National Railway


Canadian National Railways reported record quarterly revenues while funneling $2 billion to shareholders for 2022

Canadian National Railway’s CEO told analysts that the company saw “record” revenues of $4.3 billion in Q2 2022. “Tracy Robinson — President and Chief Executive Officer: We’re growing our bottom line. We’re growing our top line. More work to do, but we’ve got a great start. Now let me highlight a few key points of our Q2 financial performance. We achieved record revenues of $4.3 billion, up 21%. Now that’s on 2% volume growth, higher fuel surcharge revenues, and a strong yield management. The operating ratio for the quarter was 59%, a 260-basis point improvement over Q2 last year. The network is fluid, and the operating team has done a great job of improving performance across the network. The commercial teams had a strong quarter on yield, and bringing these together with the work of the rest of the team has enabled us to deliver a record EPS. We achieved $1.93 in the quarter, up 30% over last year.” (Canadian National Railway Q2 2022 Earnings Call, 7/26/2022)

Canadian National Railways reported $2.3 billion in stock buybacks as of June 2022. “Ghislain Houle — Chief Financial Officer: Under our current repurchase program, which runs from February 1st, 2022, through January 31st of next year, we have repurchased just over 15 million shares for $2.3 billion as at the end of June. Moving on to Page 16. We remain confident on our outlook for the balance of the year and are reaffirming our 2022 financial outlook, including adjusted EPS growth in the range of 15% to 20% with an operating ratio that starts with a five. We expect volumes in RTMs to be up in the low single-digit range for the year, with strong growth expected in the second half of the year, including a normalized grain crop starting in the fall.” (Canadian National Railway Q2 2022 Earnings Call, 7/26/2022)

Canadian National Railway fired 2,000 workers but claimed they were mostly in management in corporate

One analyst noted that Canadian National Railways had cut 2,000 employees prior to restarting hiring. “Jeff Kauffman — Vertical Research Partners — Analyst: Thank you, everybody, and thanks for squeezing me in. Just a question more on top-down strategic here. I think Rob did a great job talking about how you paid attention to the yards and you improved fluidity. I was looking more at the head count. And your presentation, you mentioned you brought on about 800 employees, I think, since the end of last year. It looks like headcount could be approaching kind of flattish year on year toward year-end. As we look at the organization, and there was a big cut of about 2,000 people, and then we’re adding back, how is the distribution of labor different? Did we call older employees and bring in younger employees? Have we strategically beefed up employee count in some areas versus others? I understand how the operations have changed. I’m trying to understand how the workforce has changed.” (Canadian National Railway Q2 2022 Earnings Call, 7/26/2022)

Canadian National Railway’s CEO replied that the reductions “were focused largely on the center on head office and on management employees” and not operators. “Tracy Robinson — President and Chief Executive Officer: Jeff, thanks for the question. I’m going to start on that and then I’m going to give it over to Rob to give you a little more detail. So when we made the cuts last year, that was not focused on our running trades or anyone who operates the trains. It was a great effort made to make sure that we protected that capability. The reductions in workforce that were made were focused largely on the center on head office and on management employees. And so that’s important to note. And as far as how it’s changing in the field, Rob, I’m going to hand that one over to you.” (Canadian National Railway Q2 2022 Earnings Call, 7/26/2022)