Canadian National Railway Hits Estimates, But GAAP Results Lag Last Year's

Canadian National Railway (TSX: CNR) reported earnings on April 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Canadian National Railway met expectations on revenues and met expectations on earnings per share.

Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share increased slightly. GAAP earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
Canadian National Railway reported revenue of $2.42 billion. The 22 analysts polled by S&P Capital IQ expected sales of $2.45 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.20. The 27 earnings estimates compiled by S&P Capital IQ anticipated $1.19 per share. Non-GAAP EPS of $1.20 for Q1 were 1.7% higher than the prior-year quarter's $1.18 per share. GAAP EPS of $1.28 for Q1 were 27% lower than the prior-year quarter's $1.75 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 44.4%, 250 basis points worse than the prior-year quarter. Operating margin was 31.6%, 220 basis points worse than the prior-year quarter. Net margin was 22.5%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $2.65 billion. On the bottom line, the average EPS estimate is $1.59.

Next year's average estimate for revenue is $10.36 billion. The average EPS estimate is $5.97.

Investor sentiment

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Canadian National Railway is hold, with an average price target of $97.14.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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