One clear sign of growing CN confidence is their re-opening of their training centers in Chicago and Winnipeg (also another sign of CN’s willingness to invest in the future; one hopes that the STB and TC and the rest take note).
- Operating stats were supportive: Crew starts were down 14% with volume down 6% (in carloads – down 7% in RTMs). Crew productivity was up 17%. From the depths of July dwell improved by 24% and car velocity by 25% Full-Q dwell was up 25% and velocity -5%). Train length was up 6%, weight by 4%, fuel efficiency (invented there) by 3% to 0.85. Safety improved – in a pandemic/sawtooth quarter – by 19% (injuries) and 22% (FRA accidents).
- Financial goals were supportive of a long term growth strategy:
- Share buybacks still paused to maintain their industry best investment-grade financial rating.
- Debt/EBITDA (adjusted) at 2.17X slightly above target (stated as “1.7X-1.9X”) – all will be “revisited” in the January call.
- Capex to remain in the ~20% range with current investment opportunities in the grain supply chain (including the next-gen hoppers) – which will be supported (as always) by ROIC.
- No update on their Wisconsin line segment sale process, nor on their petition to the STB to change the restrictive requirements imposed in the CSX/”Massena Line” acquisition deal.