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Canadian National Railway Co (NYSE:CNI)
Q2 2019 Earnings Call
Jul 23, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

[Operator Instructions] I would like to remind you that today's remarks contain forward-looking statements within the meaning of applicable securities laws. Such statements are based on assumptions that may not materialize and are subject to risks described in CN's second quarter 2019 financial results press release and analyst presentation documents that can be found on CN's website. As such, actual results could differ materially. Reconciliations for any non-GAAP measures are also posted on CN's website at www.cn.ca. Please stand by, your call will begin shortly.

Welcome to CN Second Quarter 2019 Financial Results Conference Call. I would now like to turn the meeting over to Paul Butcher, Vice President of Investor Relations. Ladies and gentlemen, Mr. Butcher.

Paul Butcher -- Vice President of Investor Relations

Well, thank you, Eric. Good afternoon, everyone, and thank you for joining us today for CN's second quarter 2019 earnings call. I would like to remind you about the comments already made regarding forward-looking statements. With me today is J.J. Ruest, our President and Chief Executive Officer; Ghislain Houle, our Executive Vice President and Chief Financial Officer; Keith Reardon, our Senior Vice President, Consumer Products Supply Chain; James Cairns, our Senior Vice President Rail Centric Supply Chain; and our recently appointed Executive Vice President and Chief Operating Officer, Rob Reilly.

Once again, I do want to remind you to please limit yourself to one question, so that everyone has the opportunity to participate in the Q&A session. The IR team will be available after the call for any follow-up questions.

It is now my pleasure to turn the call over to CN's President and Chief Executive Officer, J.J. Ruest.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Paul, and good afternoon, everyone, and welcome to our second quarter earnings call. We delivered solid results from top-line revenue growth of 9%, which is actually our best ever quarter in the Company history, and from adjusting our cost to the slower pace of growth we experienced in selective markets during the quarter. We produced adjusted EPS growth of 15%, revenue growth of over $200 million, and the operating ratio was a solid 57.5%.

I'm going to do a quick review of the last quarter operation. Our GTM production, our production rate, was up 3% over last year, but more important, it was up 5% in our key Western region, a record production for the West. Our operating metrics also continue to improve on a year-over-year basis. For example, car velocity was up a strong 9%, and railcar dwell time was down a solid 11%. During the quarter, we reduced active rolling stock and park or return lease or scrap, the least productive of our rolling stock for a total of roughly 8,700 railcars and 60 locomotives.

We currently have about 200 qualified train crews on temporary layoff in our western region, waiting for the crude by rail volume opportunity to pick up higher, and we continue to progressively tighten down our overall management headcount. As a result of these actions, our operating ratio sequentially improved every month during the quarter, and is stood at a solid 57.5% for Q2, which is 70 basis points better than last year.

Now a quick review of the second quarter top-line, which as I said earlier it was our best ever quarter in the Company history, with nearly $4 billion of revenue. Carload and revenue -- carload and RTM were both up 2% and the price continued to be solid and above rail inflation. Intermodal revenue was up 15% reflecting the addition of the TransX intermodal product into our suite of product.

Automotive revenue was up 5% in line and we have line of sight on future new business. Coal revenue grew 1%, as our Canadian coal export franchise did offset the current weak US coal market, and we like our position in Canadian coal over the mid-term.

Canadian grain revenue was up 11%. CN Canadian grain export tonnage is now up 2.1 million ton ahead of last year, and yet the Chinese ban on Canadian canola is pushing some of last year's crop into a higher carryover opportunity into the next year's crop. US revenue of grain was also positive, up 21% mostly from exports.

On crude, we moved on average 150,000 barrels a day in April, 180,000 barrels a day in May, and 200,000 barrels a day in June. We estimate our capacity can support a total of about 300,000 barrels a day with ability to generate more revenue ton-mile growth than carload growth because of our unique long haul reach into Louisiana.

Lumber production in British Columbia is facing some recent cyclical downturn. So we park or return-lease of 16% of our least efficient lumber car. Frac sand demand did not turn out to be nowhere near what our customers have indicated that the market would require.

Looking to the balance of this year and next, we are cautiously optimistic. We have a diverse pipeline of organic growth and line of sight on some market win ahead of us. We are also integrating TransX and the unique product depth that we now have in the less than truckload intermodal marketplace. Our first market win using our more sophisticated suite of product is a Canadian retailer, Hudson Bay.

In regards to 2019, we are reaffirming our guidance with continued focus on costs, focus on our PSR operation and focus on growth, but staying very mindful of market volatility.

With that, I would like to introduce Rob Reilly, our Chief Operating Officer, as of July 1st, and I have Rob give you some comments. Rob?

Rob Reilly -- Executive Vice President and Chief Operating Officer

Thank you, J.J. Thank you. And I'm very excited to join the CN team under J.J.'s leadership, and his vision of one team after 30 years of railroading with the Santa Fe and BNSF Railway companies. In the short-time that I've been here, I've had the opportunity to spend the majority of my time out in the field, seeing the operation, meeting the key players, and I've been very impressed with the leaders I've met.

Nearly, there is no better example the CN team working together as one than what I personally witnessed at the Sarnia Tunnel derailment a couple of weeks ago with the team working tirelessly around the clock to restore service to our tracks, not only restoring service to our track, but most importantly completing that complex undertaking injury free, it was very impressive to see the CN professionals and action out there.

It's clear to me that this is a well-run organization and it's a privilege to be part of it. However, our work is not done here. So I believe we have opportunities to improve in safety, become more efficient, leveraging the technology as you're able to see at our Investor Day in June, and still continue to grow with our customers, and not only grow, but grow profitably for our shareholders.

That is where my focus will be as in running a safe efficient railroad for our customers and shareholders. And again, very glad to be part of this team.

With that, I'll pass it over to James for the marketing outlook. James?

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Thanks, Rob. So looking at the second half of the year, we still see volatility in a few markets including grain, lumber, US coal and crude. Fundamentals for crude remained strong for the second half of 2019. August spreads are challenging for rail, but we have a few new contracts starting in August that will ramp up through the balance of 2019. A change in government curtailment policy could impact demand moving forward.

US coal could recover in Q3 as water levels on the Mississippi River subside. The API2 US coal benchmark pricing has shown some improvement recently and we are watching this closely. Canadian coal will continue to ramp up through H2 as Coalspur's new mine increases production. We were very happy to see the announced sale of RTI to AMCI at Riverstone. With the right level of investment, Ridley can double its coal handling capacity and this bodes well for CN bulk export opportunities via Prince Rupert.

Propane volume will continue to be strong with sequential growth from Q2 to Q3, driven by full ramp up of the AltaGas facility in Prince Rupert. Next up for propane will be the Pembina project at Watson Island in the Prince Rupert area, which is scheduled to start up in the second half of 2020.

We have the capacity to move more grain products than there is current demand. Uncertainty around the ban of canola exports in China will push a larger-than-expected grain carryover into the new crop year. New export facilities on the West Coast combined with new build loop-track elevators in the country will help us continue to move record volumes into new crop year.

Refined products revenue was up 20% in Q2, and we expect to see continued growth in this segment through the balance of 2019. We handle a significant majority of refined products originate in Alberta and over 90% of Greater Toronto Area Destin-refined petroleum products carloads. Full impact of BC mill closures and production curtailments will be a headwind for the forest products volume for the balance of 2019. We are rightsizing our fleet and resources accordingly.

Thank you, and I'll now pass it over to Keith Reardon, who will provide a brief overview of the consumer products and market outlook. Keith?

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

Thanks, James, and good afternoon, everybody. While the consumer products market is more tied to consumer spending in North America, we have also been faced with some small softness in the segment. On the international intermodal front, trade tensions between the US and China created a pull-forward of traffic late last year and early this year, which eventually led to a slowdown in volumes in Q2. As we start heading into the traditional peak season, we do expect volumes to recover. It is currently difficult to assess the size of this year's peak; however, we are seeing volumes improving over Q2.

We are seeing this at the Port of Prince Rupert, for example, where in June, the volumes were up 3% and up more than 24% so far in July. Rupert is running at an annualized run rate of 1.25 million TEUs. I'm also very pleased to announce that we have renewed several of our long-standing customer contracts in this segment including Hapag-Lloyd and Evergreen. When appropriate, we will also announce the other overseas customers that we have successfully concluded negotiations with. This once again highlights the strong relationships with and commitments from our partner's steamship lines, the benefit from our strong service offering, our unique market reach and our key competitive advantages.

We are also very excited to have teamed up with Hutchison Port, a world-class port operator from Hong Kong and a JV to build a container terminal in Quebec City, which is connected to CN and many destinations across our respective networks. While this is still a few years out, we are committed to continue to grow in the international intermodal segment. We are also looking forward to working with PSA, the new owner of Halterm terminal in Halifax, and developing that long-term relationship to attract more business to Halifax. Moving over to the domestic intermodal market, we've been working very closely with our operating team to continue to build on the service improvements that we have been seen. These improvements have enabled us to regain more share of business back from our existing customers and it has led to new business wins.

As J.J. mentioned, we continue to work on cross polymerization opportunities between CN and TransX. These efforts are also translating into new business such as recently signing a deal to handle all of the domestic intermodal business of the Hudson Bay Company, a major retailer in Canada. We are also progressing with opportunities in new markets such as the West Coast transload model, full partnership in the E&P program, the new intermodal terminal in Regina opening in September, as well as our continued growth in the cargo coal segment.

Let me finish off by talking briefly on our automotive franchise. While motor vehicle sales in North America remain pretty muted, we are seeing new product launches moving via CN serve locations and also seeing continued growth in the SUV segment. Our new auto port facility in Vancouver is now open and we expect to see volumes begin to move there in a substantial way in October. We have been recently renewing contracts of several of our automotive customers. In time and when appropriate, we will be able to make those individual announcements. But for now, I would like to announce that we have reached an extension agreement with GM that will also see us increase our business with them in October in Vancouver at the new auto compound, and in 2021, at our new auto compound in Minneapolis, which will be opened in the fall of 2020.

Thanks for your time today, looking forward to answering any of your questions during the Q&A. With that, let me pass it on to Ghislain, who will provide an update on the financials. Ghislain?

Ghislain Houle -- Executive Vice President and Chief Financial Officer

Thanks, Keith. Starting on Page 9 of the presentation, I will summarize the key financial highlights of our record second quarter performance. Let me start by highlighting that this is the first quarter of fully integrating TransX into our financials impacting intermodal revenues and on the expense side, mostly labor and purchased services. As JJ previously pointed out, revenues for the quarter were up 9% versus last year just shy of $4 billion. Fuel lag on a year-over-year basis represented a tailwind of $17 million or $0.02 of EPS, driven by an unfavorable lag this quarter of $11 million versus an unfavorable lag of $28 million for the same period last year.

Operating income came in at $1.682 billion, up $163 million or 11% versus last year. Our Q2 operating ratio is 57.5% or 70 basis points lower than last year. On a comparable basis with every railroad that have reported, excluding the benefit of any land sales, this represents the lowest OR in the industry for the quarter. Also the inclusion of TransX increased our Q2 operating ratio by 110 basis points. Net income is a $1.362 billion or $52 million higher than last year, with reported diluted earnings per share of $1.88 versus $1.77 in 2018, up 6%.

Excluding the impact of a deferred income tax recovery from the enactment of a lower provincial income tax rate this quarter and gains on surplus asset sales in 2018, we achieved record adjusted diluted EPS of $1.73, up 15% versus last year. The impact of foreign currency was favorable by $28 million on net income in the quarter or $0.04 of EPS.

Turning to expenses, on Page 10, our operating expenses were up 8% versus last year at $2.277 billion. Expressed on a constant currency basis, this represented a 6% increase. At this point, I will refer to the variances in constant currency. Labor and fringe benefit expenses were $681 million, 4% higher than last year. This was mostly the result of higher wages, driven by increased headcount and the US payroll tax rate in 2018 of roughly $15 million, partly offset by lower incentive compensation expense. Looking at headcount, the year-over-year increase was mainly attributable to the onboarding of approximately 1,400 TransX employees in March. We also adjusted our workforce in the second quarter in light of weaker volumes in certain markets and have recently been recalling those employees mainly to replace attrition.

Purchased services and material were $571 million, 18% versus last year. This was mostly the result of the addition of TransX business and higher material expenses. Fuel expense came in at $442 million or 2% lower than last year. Lower fuel prices accounted for $20 million of the reduction. While higher volumes were a $13 million unfavorable variance versus 2018. Fuel productivity improved by approximately 2.5% this quarter as our track infrastructure investments enabled increase network fluidity. Depreciation was $363 million or 8% higher than last year, mostly a function of net asset additions.

Equipment rents were 10% lower than last year, driven by reduced locomotive lease expense, as we have returned approximately 100 leased locomotive over the past year. Finally, casualty and other costs were $116 million, which was 5% higher than last year, mostly due to higher incident cost from the derailment in our Sarnia tunnel at the end of the quarter, which was shut down from over 10 days.

Now, moving to cash on Page 11, free cash flow was $799 million through the end of June. This is $497 million lower than 2018 and mostly the result of higher capital expenditures due to the upfront deliveries of new locomotives, partly offset by higher net cash from operating activities.

Finally, let me turn to our 2019 financial outlook on Page 12. While volumes in Q2 came in below our expectations and while trade and geopolitical issues are creating significant volatility, unemployment levels are still at record lows and consumer spending remains resilient. In the second half of the year, we are counting on CN's specific revenue growth opportunities that continue to ramp up, such as the new Coalspur thermal coal mine and the new propane terminal in Prince Rupert, both which started shipping in Q2. In addition, as James mentioned earlier, our crude oil shipments have increased significantly in the quarter and we are optimistic that the Alberta Government will enable that momentum to continue for the balance of the year.

We are therefore continuing to expect mid-single digit volume growth in terms of RTMs for the full year versus 2018, implying a step-up in the second half of the year from the 3% RTM growth that we experienced in the first half, along with favorable pricing. In addition, we now expect our full year effective tax rate to be approximately 25% versus the roughly 26% that we discussed last quarter.

The updated estimate reflects a more thorough understanding of the draft regulations related to the US tax reform that were issued last December, as well as the implementation of effective tax strategies to mitigate the unfavorable impact of those regulations for 2019. We are maintaining our EPS guidance of low double-digit growth versus 2018 adjusted diluted EPS of $5.50 and we'll continue to right-size our resource base as needed. This guidance maintains our assumptions for the Canadian dollar at $0.75 versus the US dollar. However, should foreign currency remain at the current spot rate of approximately $0.76 to $0.77 for the second half of the year, this will create a headwind for us.

On the capital front, we are advancing on our large capacity track expansion program, which are expected to be substantially completed by the end of the third quarter, ahead of our busy fall period.

We have received so far around 125 new locomotives out of the 140 expected, and we are taking the opportunity to return expensive, less reliable leased ones. Furthermore, we continue to reward our shareholders with consistent dividend returns and we are on track with our current share buyback program of $1.7 billion having repurchased 6 million shares at a cost of roughly $725 million since the end of January.

In closing, we remain committed to our agenda of operational and service excellence, and we continue to manage the business to deliver sustainable value for today and for the long-term.

On this note, back to you, J.J.

Jean-Jacques Ruest -- President and Chief Executive Officer

Well, thank you, guys. To wrap this up, where we stand right now on operating matrix are at PSR railroading level and we are in good position to have good results going forward. For example, in the last four weeks, the last 28 days, our RTM are running at 6% growth so far. In the next three years, as you know, as pretty -- what we've mentioned at the Investor Day, we are aiming for low-double digit diluted EPS growth, normalizing our capital intensity, producing high-50s operating ratio with ROIC in the range of 15% to 17%, free cash flow that is growing faster than earnings and dividend per share the growth in line with earnings.

So operator, Eric, we will now turn it back to you for question from the people on the call.

Questions and Answers:

Operator

[Operator Instructions] The first question is from Ravi Shanker with Morgan Stanley. Please go ahead. Your line is open.

Ravi Shanker -- Morgan Stanley -- Analyst

Thanks. Good evening, everyone. So I have one, Rob, if I can ask you, now that you've been in the seat for a while unlike the Analyst Day where you were new [Phonetic], CN obviously has a long and proud history of schedule railroading in its blood, maybe your former employer didn't have that, but can you just talk about some of the outside of scheduled operations, maybe some of the best practices or what your former employer did really well that maybe you can bring to CN?

Rob Reilly -- Executive Vice President and Chief Operating Officer

Yes, thanks, Ravi and look forward to seeing you again. Certainly not here to compare and contrast rank and look at the BNSF, great run company and have great experiences there. What I've seen at CN, I've been very impressed with in terms of how they make their decisions, the speed in which they make their decisions. Great example was in the second quarter before I got here, some of the decisions were made in terms of reacting to the volumes out there, how quickly they laid up locomotives, how quickly they react in terms of assets, very impressive that their fingers on the pulse. It's very obvious that this is a season group of schedule railroaders, and they do a lot of things, really, really well and I've been very impressed in my few weeks here.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Cherilyn Radbourne with TD Securities. Please go ahead. Your line is open.

Cherilyn Radbourne -- TD Securities -- Analyst

Thanks very much and good afternoon. So you knew you were going to get a question on crude by rail, so I'll go ahead and ask it. Can you just give us your thinking as to when the Alberta crude contract could transition to the private sector, and how quickly thereafter you would expect to see a ramp up in volumes?

James Cairns -- Senior Vice President, Rail Centric Supply Chain

So I think, James has been our expert, will take that up.Yeah, thank you, Cherilyn. So tough to say with governments involved, but I think they've stated publicly that they fully intend to have the contracts transferred to the private sector by the fall. We're ready to go since those contracts get transferred over. I think you know the real determining factor Cheryl is going to be this pace of scale or wrap up that is going to depend on whether the transfer of contracts is time with the reduction in curtailment or exclusion of curtailment for crude by rail barrels. We're very hopeful that's going to happen and could see some very positive news here this summer.

Jean-Jacques Ruest -- President and Chief Executive Officer

Hopeful and ready.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Yes.

Jean-Jacques Ruest -- President and Chief Executive Officer

Get the resource.

Operator

The next question is from Benoit Poirier with Desjardins Capital. Please go ahead. Your line is open.

Benoit Poirier -- Desjardins Capital -- Analyst

Yes. Thank you very much. Keith, could you provide maybe more color on the Yang Ming contract loss and also how that will impact your service at Deltaport given that your competitors market share is expected to go from 20% to 70%. Thank you.

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

Sure. So it's got two questions. Well, I'll take them, Benoit, thank you. So the first about the Yang Ming contract. We were sitting at the negotiation table and got to the point where we said no. And that's pretty much the end of that story. With regard to the transfer of the contract over at Vancouver to Deltaport, it's a very complicated thing because you have multiple alliances, multiple carriers, slot charter agreements and that type of thing. I can tell you within the last four years, there has been anywhere between 12 and 13, I look at my notes, but 12 and 13 times that the market share of who is handling the business there has gone up and down for us and back and forth. It's been a long time since we've had a significant share in 2015. I think the share right now is right around 50/50. So we know that there will be a lot of changes. I think there's four or five different scenarios about what could play out over the next six months with different alliances talking to us and talking to the terminal operator both about some vessels around, strings, that type of thing. So I don't think we can call who is going to have what type of market share and what that's going to do with regard to how much footage gets dropped on a weekly basis. So we're going to wait and see how it all plays out there.

Benoit Poirier -- Desjardins Capital -- Analyst

Okay, that's great color. Thank you very much for the time.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Chris Wetherbee with Citi. Please go ahead. Your line is open.

Chris Wetherbee -- Citi -- Analyst

Hey, thanks, good afternoon. James and Keith, maybe you could give us a little bit of a rundown of the specific drivers that you sort of have the most confidence in terms of building the RTM growth as we move into the second half of the year. It sounds like crude by rail is likely to be one and I think coal and maybe a couple of others are the key drivers there, but can you sort of break them out a little bit and go into a bit of detail there?

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Well, I think Chris you hit on the first two, it's going to be crude, it's going to be coal, it's going to be grain and it's going to be propane and intermodal, key drivers of our RTM growth going into second half of the year.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Allison Landry with Credit Suisse. Please go ahead. Your line is open.

Allison Landry -- Credit Suisse -- Analyst

Thanks, good afternoon. Just wanted to follow up on the international intermodal. It sounds like you've got some good success there. And I think you said that you had won some new contracts. So just wondering if you could give us a sense of the potential magnitude and timing of these new contracts, and if we should expect any of that volume to flow through in the second half of the year. Thank you.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

So most of those contracts or renewals, Allison. We are working on some of the other, call them, open contracts or renewals that for our competitors. We're always looking at that. They're looking at ours. But the renewals that we had, Evergreen and Hapag, I can announce we have renewed some other contracts. It's not at the appropriate time to do that to give that announcing per our customers, but we have renewed some, yeah.

Allison Landry -- Credit Suisse -- Analyst

Okay, thank you guys.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Thank you.

Operator

The next question is from Jason Seidl with Cowen and Company. Please go ahead. Your line is open.

Jason Seidl -- Cowen and Company -- Analyst

Thank you, operator. Hey, J.J. and team. Wanted to touch on pricing a bit. Your outlook is to continue -- to have pricing above rail inflation, but how would you categorize sort of the pricing environment now, and into the back half of the year compared to how it came into the year?

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes. Thank you, Jason. I would characterize it as stable. We continue to have success pricing ahead of railway cost inflation that's been our model for many years now, and we see no reason to deviate from that, and we're having success in the marketplace.

Jason Seidl -- Cowen and Company -- Analyst

And if I could follow-up on, in the back half of next year, obviously the truckers are going to get some curtailments by the government with the devices being put in their cars. Do you see that as an opportunity to maybe push up pricing on the domestic intermodal a little bit more?

Jean-Jacques Ruest -- President and Chief Executive Officer

So, maybe you want to pick that up, Keith?

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

Sure. So we saw that happened in the states. The ELDs come in line June of 2021, right. So, we've already seen a significant amount of large trucking firms and large intermodal firms in Canada have already begun using those devices because a lot of them do some transborder work as well. So, I don't think you're going to see the big bang that you saw in the states, but there will be some of the smaller firms and some of the -- maybe some of the mid-sized firms that they will be impacted a little bit more. We see good pricing power now; I don't know that that's going to increase at the ELDs.

Jean-Jacques Ruest -- President and Chief Executive Officer

So more of a muted response we saw in the states.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

It's not going to be the big bang, I don't think so.

Jean-Jacques Ruest -- President and Chief Executive Officer

Just because it as cross-border, a lot of companies are already equipped.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Yeah, yeah.

Jason Seidl -- Cowen and Company -- Analyst

Makes a lot of sense. Appreciate the time as always, gentlemen.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Steve Hansen with Raymond James. Please go ahead, your line is open.

Steve Hansen -- Raymond James -- Analyst

Yeah. Good afternoon, guys. Just a quick one here on the coal side, the Coalspur facility ramp up is encouraging, but I think it has been a little bit slower than expected. Can you maybe just give us a sense for the cadence through the back half of this year and into next year? Any specific issues that you see is accelerating or slowing that down? Thanks.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Yeah, I won't speak to any kind of the specific challenges that Coalspur has had. Anytime, you start up a new facility or a mine like that you're going to have a bumps and starts kind of we've seen that. Talking with our good customer, Coalspur, we see a continued ramp-up going through the balance of this year, Q3 and then in Q4, all signs are very positive for continuing growth in the carload volume that we see out of that facility.

And we also see the fact that the RTI coal terminal in Rupert is now finally been sold. It's in ahead of the good private investors who have intended to invest and that's what create fortunately the mid-term to see some growth in Rupert because of the new ownership.

Steve Hansen -- Raymond James -- Analyst

That's great, thanks guys.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from David Vernon with Bernstein. Please go ahead, your line is open.

David Vernon -- Bernstein -- Analyst

Hey, guys. Just a quick question on the intermodal RPU. Is there a way you can separate out kind of what the growth was from TransX versus what the core growth was in the business?

Jean-Jacques Ruest -- President and Chief Executive Officer

Specific to you want me a break just TransX and then our intermodal business and what the growth was?

David Vernon -- Bernstein -- Analyst

In terms of the ARPU view growth of 14% or whatever it is year view, I'm just trying to get a sense for what it was for rail versus TransX?

James Cairns -- Senior Vice President, Rail Centric Supply Chain

I believe the -- I'm going to give you a round about number, how about this -- the numbers for TransX are about $100 million.

Jean-Jacques Ruest -- President and Chief Executive Officer

In total revenue.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

In total revenue. Should be able to back into the rest of it from there.

Jean-Jacques Ruest -- President and Chief Executive Officer

Okay?

David Vernon -- Bernstein -- Analyst

Okay.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Okay, thank you. The next question is from Walter Spracklin with RBC Capital Markets.

Walter Spracklin -- RBC Capital Markets -- Analyst

Thanks so much. Good afternoon, everyone. So when I look at your operating performance on a sequential quarterly basis, barring last year, it's very typical you're getting summer railroading in Canada tends to be a lot easier. So, your operating ratio historically has been a lot better in the third quarter versus Q2. Just wondering if there is anything, as you say, if you're flagging anything in the operating side that might pop-up or anything that would indicate that historical trend albeit barring last year, that historical trend wouldn't continue into the summer period here for CN this year?

Ghislain Houle -- Executive Vice President and Chief Financial Officer

Yeah. Walter. Thanks for the question. Listen, I think it's steady as she goes. Obviously, we're not going to give any guidance on the OR on a quarterly basis. But as you can see, we're continuously improving our OR in a year-over-year basis as the capacity is there and as we have the right infrastructure. So that's exactly our game plan and I think over the next couple of years as we've provided guidance at our Analyst Day that you've attended, I think that we're comfortable that will get into the high-50 OR, which is what we've said to the market, and you know, on a quarterly basis, you can make your own assumptions. We're not going to go there on a quarterly basis, just be careful when you look at it on a quarterly basis, there is sometimes timing. So, OR, you need to look at it and we look at it over the next few years and we're right on our game plan and we're very pleased this quarter because we actually delivered what we said we were going to deliver. So we're very pleased about this. And when you adjust for asset sales, as I said in my remarks, then we have the lowest OR in the industry. So we're pretty pleased about that.

Walter Spracklin -- RBC Capital Markets -- Analyst

Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Brandon Oglenski with Barclays. Please go ahead, your line is open.

David -- Barclays -- Analyst

This is David [Indecipherable] on for Brandon. Just had a quick question. What we saw at the Investor Day was the infusion of some outside talent that you've brought. We'd heard from Rob already. We noted you had hired a new Chief Digital Officer and I was wondering if you could talk about some of the experiences and things you will bring to the table as they apply to the digital initiatives and technology initiatives you had highlighted at the Investor Day? Thanks.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah, yeah. So, it's J.J., maybe I can pick this one up. So, David comes from a big Canadian industrial company, which is also has a lot of remote locations, been in business with companies and been in business for a long time, heavily unionized. So he comes from a background that's similar to what we experience here in the rail industry at CN. And also his role is to help us out apply technology -- advanced technology to our operation, but also to help us automate regular administration process. We have still have it in the rail industry at CN, a lot of jobs, which are repetitive combining data, going to a spreadsheet and we can automate those through RPA. But, also we're looking, as we saw in the Investor Day to automate a track inspection, train inspection and him and Michael Foster and the [Indecipherable] basically are mandated to bring in new level of scale and efficiencies to schedule railroading that takes into account what's now readily available to any large industrial company like CN. So, it's time for us to really -- as an industry, CN to really put forward on that, and David, was the last piece of the talent that where we're looking to add to our team. In fact, he already bought his house, but he is going to be with CN sometime in mid-August. So it's all coming up together nicely. The rail industry can automate just like any other industry. I think that helps.

David -- Barclays -- Analyst

Thanks for that.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Seldon Clarke with Deutsche Bank. Please go ahead, your line is open.

Seldon Clarke -- Deutsche Bank -- Analyst

Hey, thanks. Can you just talk about some of the maintenance projects that you're undertaking in the third quarter and whether we should expect the same type of network disruptions that we saw in 2018?

Jean-Jacques Ruest -- President and Chief Executive Officer

Jamie, you're on that.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

The combination maintenance and also our capital program, yeah, so we're in the middle of work block season right now, obviously put in rail and tie-in during the summer months. We do have our expansion plan well under way. We've got a couple of those projects completed in the first half of this year and the rest that are planned to be completed in the third and fourth quarter are all on track and should be completed as well.

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

And just to add on, I mean, we did learn from our deployment of our basic capex maintenance and also our capacity from last year. Obviously, this is a big program this year similar to last year. So the team did a good postmortem starting to season. So, the way that we're deploying our capital is actually better so that you should not expect to have some of the impact that you had last year in the third quarter; we did learn. So stay tuned. But as Rob said, we're on track and this capacity will help us when we get to the busy fall season which is coming up.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Seldon Clarke -- Deutsche Bank -- Analyst

Thanks.

Operator

Thank you. The next question is from Konark Gupta with Scotiabank. Please go ahead, your line is open.

Konark Gupta -- Scotiabank -- Analyst

Thanks, and good afternoon. Just wanted to follow-up on the volume outlook for the second half, so like you pointed out a few commodities and segments, which are obviously clearly ramping up and then you also have easier comps and frac sand and autos, I guess, in the second half. So I just wanted to understand the 6%, 6.5% RTM growth we have seen so far in July and with the contracts that you have mentioned that you've just won or renewed. What do you think the second half volume outlook should be in that upper sort of mid-single digit range, is that sustainable or you think there is this further acceleration you are going to expect?

Jean-Jacques Ruest -- President and Chief Executive Officer

Well, I think we -- just to make a point before I pass it onto Keith and James is all we're talking about is 2019; we're not to 2020 at this point. But -- and the contract win we're talking about in case of General Motors is starting in October. James or Keith, you want to add to what you said earlier?

James Cairns -- Senior Vice President, Rail Centric Supply Chain

So as J.J. just pointed out, the contract win that we have with General Motors in Vancouver is in October, and we feel confident with the numbers that all line up to the mid-single-digits.

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

Yes, I could talk a little bit more about kind of what we see that sequential ramp up in H2 compared to H1. So if you think about what we did with -- on the coal side of things, we got the full ramp-up of Coalspur that we talked about. Then, we have the full ramp up of our propane export facility with our good friends at AltaGas. On the grain side, we're looking very positive on grain, could be a crop in the range of the average for the last three years. But they carryover from this crop season to new crop season and potential to have a 10 or maybe two-week earlier start up compared to last year's late start for the crop. I mean, these are easy times to execute when you can got to get the grain crops started a couple of weeks early there. And I think the last one I talked about was coal, propane intermodal you did?

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes, maybe we should talk a little bit about the follow-up on the press release on the new stuffing facility in Prince Rupert, where we will be moving some resins that way. And it will be about 400 containers the month that will be stuffing there with [Indecipherable] and his team that not only add to the revenues for James, but it's very helpful to our steamship line folks that are looking for a write-back -- revenue write-back to Asia. So it's a really, really great thing that the team has been working on, it will come to fruition here very shortly.

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

And there is some further market shift or contract shift, if you wish, we will only talk about those things when our customers are comfortable that we can talk about them.

Konark Gupta -- Scotiabank -- Analyst

Thank you.

Operator

The next question is from Jordan Alliger from Goldman Sachs. Please go ahead.

Jordan Alliger -- Goldman Sachs -- Analyst

Yes, hi. Afternoon, everyone. Just a quick follow-up. I just want to make sure I heard right, you talked, I think about the frac sand markets, and I think you said that perhaps customers were suggesting something and then maybe it wasn't coming in quite as expected. I know that was an opportunity set for you guys, you talked about, and I just wanted to get a little color around that to make sure I heard that correct.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah, so it's J.J. talking. So these were my comments. It is basically, we were geared up in the second quarter to much more frac sand and what we did. What's more than -- we basically to be in line with our customers on prediction, and the combination of, I guess, they were too optimistic, but also that marketplace is maybe little tough or tougher than what they thought plus they are also competing with local sand in different areas. So we have the resources ready and you may remember that winter of 2018, there was a lot of public comment made that CN wasn't ready for frac sand, while we've got geared up with people, track, locomotive and whatnot. But then in second quarter here is -- was the reverse. What the industry was talking that would happened, did not quite happen. So that's what it was.

Jordan Alliger -- Goldman Sachs -- Analyst

When you say, I mean is -- do you anticipate sort of shorter-term or just not clear yet?

Jean-Jacques Ruest -- President and Chief Executive Officer

This is all related to how much drilling activities that there is right now and related to, I think, the frac sand industry in North America is maybe not quite getting the volume across the board that we're hoping for and CN is experiencing the same thing.

Jordan Alliger -- Goldman Sachs -- Analyst

Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

So in term of how much sand will be required in future, again, it will be back to the basic that James kind of was talking about, what's the price of natural gas, what's the price of crude, and how much drilling activities will there be.

Jordan Alliger -- Goldman Sachs -- Analyst

Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Ken Hoexter with Bank of America Merrill Lynch. Please go ahead. Your line is open.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

Good afternoon, J.J. and team. J.J., maybe you could just revisit some of your opening comments. You talked about balanced growth and parked capacity and it sounds like you're bringing some employees back from furlough. It looks like employees were up 5% normalized for the TransX. Maybe you could just talk about the kind of what's going on the employee side and how you balance out with the, I guess, mid-single-digit growth here you're looking for in the second half? Thanks.

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah. So maybe I'll start and then maybe just Ghislain can add some, but on the headcount side, on the people side, we are doing three things. One is, we've had in last year, quite a few -- remember, we used to talk paycheck and employee, and really paycheck is really to what knows the most, and we are trying to reduce the number of contractors, consultants we have at CN, because those paychecks are more inspected than the people work full time. So on one end, we are insourcing work because that work is done more cost effectively with full-time employee, and also where we retain the skills, that's mostly in the world of IT, in the world a PTC for example.

And on the other end, on the operating side, we want to size up the size of our labor sort of workload and we were prepared for more workload this summer than what we had, crude by rail, for example, is even -- it's a growth story. We've been quite what it was, we had some layoff in the second quarter, 500, and the 500 is now down to 200 because of attrition, and we are at -- and the third leg is on the management side. When I say management, I mean, the headquarter, but all non-unionized job at CN. And to give you a reference point, on October 15, 2018, we had 6,900 management job at CN, and now in July, we're roughly at 6,030 to be precise, and we want to finish to end the year at 5,700. So we are streamlining our management structure, we are sizing our crews based on volume and attrition. And then also by the same time, we are insourcing some work on the consultant, mostly in IT, because these consultants they are too expensive and also we end up training people for their next consulting job as opposed to in the next project at CN. And I'll let Ghislain, you want to have?

Ghislain Houle -- Executive Vice President and Chief Financial Officer

You covered it very well. I think what, Ken, you need to be mindful of again is attrition is a good lever for us because there's quite a few people that go, that retire and therefore, when we are a little bit up on the headcount side, it only takes a couple of months and the attrition eats into it. So that's really a good lever that we have and that we use. So, but otherwise JJ, you covered it very well.

Jean-Jacques Ruest -- President and Chief Executive Officer

So, Ken, [Indecipherable] refocus on headcount, but remember the discussion that we learned back and it is with Hunter. It's more about the paycheck and the head count. So some time, you have to increase your headcount to reduce the cost of these outsource services that we buy from outside.

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

Helpful. I'll wrap up. Thanks, J.J. and Ghislain. I appreciate.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Scott Group with Wolfe Research. Please go ahead.

Scott Group -- Wolfe Research -- Analyst

Hi, thanks. Afternoon guys.

Jean-Jacques Ruest -- President and Chief Executive Officer

Good afternoon.

Scott Group -- Wolfe Research -- Analyst

So the 10,000 carloads accrued in June, what's the run rate you're assuming for third quarter? And then separately, Ghislain, if I look comp per employees down 2% year-over-year in the quarter, how much of that's the incentive comp, how much is just the mix of TransX. I'm just trying to understand is that -- if we should think that that continues to fall year-over-year in the back half of the year?

Jean-Jacques Ruest -- President and Chief Executive Officer

James, you want to add some more colors on the crude by rail?

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Yes, specifically on crude, we're going to see a slight ramp up from our June volumes as we go into the third quarter and then into the fourth quarter.

Jean-Jacques Ruest -- President and Chief Executive Officer

And this is all based on our own gut feel of the spread and what the government of Alberta may or may not do and how early they will do it.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Yes, I'm not sure. I got your question, Scott, on the second piece. I know there is one on incentive comp. So, yes, incentive comp helped us absolutely on the labor side this quarter and this just demonstrates that some of our incentive model is working. And I mean, on the people side, I think we've answered it and we're going to try to right-size our resources. What we're proud about this quarter is, we -- obviously, our volumes are lower or softer than what we expected, but we were very quick to react and this is partly why we have the quarter we have. So again, we've talked about in our opening remarks that the markets are changing very quickly, very volatile. So our policy is very close to the demand and we can react very quickly to what's happening out there in terms of the cost side. So we're very pleased about that and I think, stay tuned, our business plan is working and we're delivering what we said we're going to deliver.

Scott Group -- Wolfe Research -- Analyst

Maybe I maybe I didn't ask right, if I can just ask it more directly. The comp per employees for the TransX people, is that lower than the overall average, meaning as we add that into the model, does that bring does that bring comp per employee lower?

Jean-Jacques Ruest -- President and Chief Executive Officer

TransX is part of CN, I wouldn't start commenting on their comp model versus our comp model. I think comp is comp and the numbers are there and I'm going to let you make an assumption.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

So maybe, they may not have as many senior position and they are all basic [Indecipherable] all the salaries on Canadian funds, maybe that could help because on the rail operation, we have quite a few people who are based in the United States.

Scott Group -- Wolfe Research -- Analyst

All right, thank you guys.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from Brian Ossenbeck with JP Morgan. Please go ahead.

Brian Ossenbeck -- JP Morgan -- Analyst

All right, thank you for taking the question.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Brian Ossenbeck -- JP Morgan -- Analyst

Just wanted to go back to the resource allocation, it sounds like you've obviously made some adjustments to where it seems a little softer. If you could just give us a sense which areas are you watching closely that could be a little bit weaker into the back half of the year? And also give us a little bit of context as to how the Digital Twin that you're rolling out, I believe, at year-end imagine you have a decent working model for that. Is that starting to show some benefits in terms of adjusting more in real time or is that something you don't expect to get a lot of mileage out this year versus next when it's fully ramped out?

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes. So, if I may start on the digital twin, the tool that we want to have in term refers to models -- our capital, then the resource plan. We're not using it yet. And today, I would -- in term of a day-to-day tool, that's not where we're at. We're still building that tool and we want to use that tool at this point for the first use to be modeling the network and making the capacity decision, more kind of a month-by-month, it's kind of a mid-term tool, and ultimately, eventually will go for mid-term to more short-term to more and more short term. So that's work in progress, but huge payback in what we might be able to extract as incremental capacity by using the network much smarter. I think I forgot what was your first question within the two questions?

Brian Ossenbeck -- JP Morgan -- Analyst

Yes. I'm just asking, if you could give us a sense of where you're looking at in the second half that it might be a little softer, you kind of hit the highlights in terms of whole crude [Speech Overlap]?

James Cairns -- Senior Vice President, Rail Centric Supply Chain

We keep an eye on all of our markets. We try and keep take control over that, make sure that we are rightsizing our resources continually. Some of the markets that we're watching very closely forest products, for example, US coal and of course, crude, need to make sure that we're able to react either way. Crude, could have to react up, could have to react down, it's going to be very interesting to see what happens in the fourth quarter here.

Jean-Jacques Ruest -- President and Chief Executive Officer

Forrest products are so, and the Mississippi River is still high and the [Indecipherable] in Europe is always, we need to stay very close to that.

Brian Ossenbeck -- JP Morgan -- Analyst

Okay, great, thanks very much.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Justin Long with Stephens. Please go ahead.

Justin Long -- Stephens -- Analyst

Thanks and good afternoon. So I was wondering if you could help us understand the quarterly cadence of RTM growth. It's baked into the guidance for the third quarter and fourth quarter, just given some of the moving pieces with new contracts, the comps, etc? And then just lying on the tax rate, even after the adjustment, it was lower than the 26% you guided to last quarter, so curious if that assumption in the guidance has changed as well?

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes, I can start with the tax, Justin, so I did -- last quarter, as you know, we discussed and I did provide some visibility that our effective tax rate for the full year would be 26%. I've just said in my remarks -- prepared remarks that now, we see 25% of effective tax rate for the full year, and that's mainly due to tax strategies that we are employing to reduce some of the unfavorable impact that the US tax reform has on CN. So this is good news. And on the -- I can comment and then if my colleagues in the marketing wants to jump in on the RTM, I mean, if you look, we're still guiding for and it's not a guidance, it's an assumptions. So our assumption is still mid-single-digit volume growth in terms of RTM. So I mean, that is mid, so you can decide what you decide what mid is, but -- and freight -- in the first half of the year, we delivered 3%, so you can but just do the math and you can see that -- and that's what I said in my remarks as well that we need an uptick in RTM growth in the second half, but at the end of the day, volumes are volumes. What we are focused on is to protect earnings. That's what we're focused on. At the end of the day, if volumes come at 4% instead of 5% or 6% or whatever it is and whatever your midpoint is, we want to protect earnings and what's important for us is to deliver our guidance on earnings, which is low double-digit EPS growth. I think that's what our investors wants to see and that's what this team is committed to deliver.

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

That's right. It's about modulating the resource to the volume, slower growth means slower increase in resource. And as the network is also becoming more efficient, we need to bring that to the bottom line. So rolling stock, headcount either permanent head count like management, as I said earlier that we are aggressively bringing down and it gives the operation side is to go from week-to-week, month-to-month to see this how many people we need to have and make sure we have enough people, but at the same time not more than what we need. So it's almost basically now a weekly exercise in terms of how much rolling stock we have out there and how many people we have on the furlough board on lay off. It's very dynamic, we keep it tight.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Justin Long -- Stephens -- Analyst

Okay, great, thanks for the time.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you.

Operator

The next question is from Tom Wadewitz with UBS. Please go ahead. Your line is open.

Tom Wadewitz -- UBS -- Analyst

Yes, thank you for the time. There were some comments I think about peak season that some optimism and I think your comments on intermodal in general in second half showing some -- expecting some growth. How much visibility do you have at this point? What kind of underpins the view you have at this point on peak season?

Jean-Jacques Ruest -- President and Chief Executive Officer

Keith?

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

Yes. So a couple of different things. We have the ability to talk to our domestic customers who have the inventories in the warehouses and what they see is going to be their needs, but we also have our discussions with the Allianz and what they're doing with their vessel calls and the size of their ships, and where they're calling if they're moving some stuff around. And we can see out -- I mean, we know what's on the vessel, three, four, weeks out, anyway. So that's the guidance or that's the visibility that we have and we make the best decisions we can with it.

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Yes, we have more and more a better system and also cooperation with some of the terminal operator, who have the visibility of what's coming for CN, right, for CN Rail to and fill in as the vessel are loaded. So we kind of see three weeks out. I mean, what's loaded today, we'll get two or three weeks from now, so we have at least that better visibility on what's loaded in the ship, which are a distant to CN, CN port and CN cities. So that's helpful.

Tom Wadewitz -- UBS -- Analyst

And what about...

Jean-Jacques Ruest -- President and Chief Executive Officer

Yes, go ahead.

Tom Wadewitz -- UBS -- Analyst

Yeah, you commented a bit on the inventories, is that something that's -- is there much visibility in terms of, you think inventories have actually come down or coming down or is that kind of a broader macro data that you're looking at?

Jean-Jacques Ruest -- President and Chief Executive Officer

Well, that's also what I said earlier is that we can't say how big the peak is going to be, but we do feel that there will be volume growth over Q2. There will be a peak season, we just don't know how big of a peak it will be, right? So can't regulate what the answer is, but we do make a lot of, a lot of phone calls and a lot of visits to our domestic side to triangulate the information to see if we can figure that out, and it's probably not an exact science, but we do our part and we do a lot of work to try and figure that out.

Tom Wadewitz -- UBS -- Analyst

Okay. Thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you, Tom.

Operator

Thank you. There are no further questions registered at this time. So I would like to turn the meeting over to Mr. Ruest.

Jean-Jacques Ruest -- President and Chief Executive Officer

Okay. Thank you...

Operator

I'm sorry, I am sorry, we have one that just had. Mr. Scott Group from Wolfe Research. Please go ahead.

Scott Group -- Wolfe Research -- Analyst

Hey, guys thanks for the follow up. Just big picture, the guidance you've got, you're assuming accelerating volume growth, but decelerating earnings growth to get low double digit earnings growth. Maybe help walk us through that and do you think that there is potentially upside on the low double digit for the earnings growth based on the first half?

Jean-Jacques Ruest -- President and Chief Executive Officer

Yeah, listen the guidance is there. I mean, there is a lot of -- Scott, as you know, there is a lot of different moving parts to the equation, and I mean, there is freight thing, there is volume, there is various commodities, etc., etc. And then there is comparables as well, what we did versus last year, in Q3, Q4. So, all in all our best foot forward right now and what I can tell you is, we are maintaining our mid- to single digit volume growth in terms of RTM, but we need an uptick to get there as an assumption because we did 3% in the first half and with our math and you can do your math obviously, but with our math then we are confident at this point that this will result in low double-digit EPS growth for the year, and we're proud of that and we're confident that we will deliver on that.

Scott Group -- Wolfe Research -- Analyst

Okay. Okay, thank you.

Jean-Jacques Ruest -- President and Chief Executive Officer

Thank you. Thank you, operator.

Operator

Thank you. There are no more questions registered at this time. So, I would like to turn the meeting over to Mr. Ruest.

Jean-Jacques Ruest -- President and Chief Executive Officer

Okay, thank you everyone for joining us today. We're very proud of our results. But, the rays goes on and we have already working in the third quarter. So thank you all for joining us today. And this is the end of our call. Thank you.

Operator

[Operator Closing Remarks]

Duration: 57 minutes

Call participants:

Paul Butcher -- Vice President of Investor Relations

Jean-Jacques Ruest -- President and Chief Executive Officer

Rob Reilly -- Executive Vice President and Chief Operating Officer

James Cairns -- Senior Vice President, Rail Centric Supply Chain

Keith Reardon -- Senior Vice President, Consumer Product Supply Chain

Ghislain Houle -- Executive Vice President and Chief Financial Officer

Ravi Shanker -- Morgan Stanley -- Analyst

Cherilyn Radbourne -- TD Securities -- Analyst

Benoit Poirier -- Desjardins Capital -- Analyst

Chris Wetherbee -- Citi -- Analyst

Allison Landry -- Credit Suisse -- Analyst

Jason Seidl -- Cowen and Company -- Analyst

Steve Hansen -- Raymond James -- Analyst

David Vernon -- Bernstein -- Analyst

Walter Spracklin -- RBC Capital Markets -- Analyst

David -- Barclays -- Analyst

Seldon Clarke -- Deutsche Bank -- Analyst

Konark Gupta -- Scotiabank -- Analyst

Jordan Alliger -- Goldman Sachs -- Analyst

Ken Hoexter -- Bank of America Merrill Lynch -- Analyst

Scott Group -- Wolfe Research -- Analyst

Brian Ossenbeck -- JP Morgan -- Analyst

Justin Long -- Stephens -- Analyst

Tom Wadewitz -- UBS -- Analyst

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