Canadian Railroads > CN earnings and outlook call 2Q2021

CN held its quarterly conference call covering earnings and the outlook for business.  As usual, it was a very polished presentation with good materials and some interesting answers to questions. This is my paraphrase.

The story line is the voting trust is well along in the review process, and the company expects it to be approved. Mexican approvals may not come until October. Customer support has been widespread, including the passenger railroads, and many shippers. Selling or expanding access to the New Orleans to Baton Rouge corridor is in the proposal. "One rail company from Detroit to Kansas City or Mexico" was mentioned more than once.

A question about reciprocal switching in the US was deflected, with a re-reference to the New Orleans area access.

Good earnings, but the drought is hurting grain production in the southern prairies.  CN has added considerable grain export capacity at Vancouver and Prince Rupert. Clients are building throughput elevators and loop tracks on CN lines. Our new grain hoppers give us the equivalent of 4 new trains weekly, using the same number of cars and trains.

We will focus on improving our partnerships with passenger rail. Amtrak, Via, commuters, etc. We value that relationship, and appreciate we are considered a top provider.

The limits on operations when temp exceeds 33 degrees Celsius (100 F) will slow us, but we don't see a huge impact at this point.

We have locomotives.  225 stored, plus the 75 nearly new units we are receiving.  We have crews to get the job done. We are capturing business from trucks.

Rail inflation in costs is real. We are pricing ahead of it, but costs are rising.  The replenishment cycle for warehouses etc used to have peaks, but it seems to be year 'round now.

This is just a summary of things that jumped out. There is much more on the CN tape

https://www.cn.ca/en/investors/

 

Thanks very much for the pithy summary. Market seemed to like the earnings, too, giving the shares a bump.