Thursday, October 30th8.7°C
21625
22916

CN Rail's net income increased 12.2 per cent to $623 million despite weather hit

MONTREAL - Canadian National Railway's profit increased 12.2 per cent to $623 million in the first quarter despite the negative effects of a very cold and snowy winter as Canada's largest railway beat analyst expectations on both revenue and profit.

CN reported after markets closed that it earned 75 cents per share for the period ended March 31, 10 cents per share higher than last year.

Excluding gains from asset sales, CN earned $551 million or 66 cents per share, compared with $519 million or 61 cents per share in comparable prior-year period.

Revenues grew nine per cent to $2.69 billion, led by a 23 per cent gain from petroleum and chemicals. Intermodal was up 12 per cent, followed by metals and minerals (seven per cent), coal (seven per cent), and grain and fertilizers (six per cent). Forest products revenues were flat while automotive revenues declined by four per cent.

The Montreal-based railway was expected to earn 63 cent per share in adjusted profits in the first quarter, up from 61 cents per share in the prior year, according to analysts polled by Thomson Reuters. Revenues were forecast to grow 7.1 per cent to $2.64 billion.

CN chief executive Claude Mongeau said the Montreal-based railway delivered "solid" results despite the harshest winter in decades.

"The winter of a lifetime took its toll on network capacity and affected all of our customers, but I'm pleased that CN's recovery is now well underway, with key safety, operating and service metrics returning to pre-winter levels," he said in a statement.

The lower Canadian dollar increased profits by $26 million in the quarter.

The railway's shares (TSX:CNR) hit an all-time high of $63.72 in trading Tuesday on the Toronto Stock Exchange before closing at $63.57, up 59 cents.

The railway maintained its 2014 financial outlook and increased its planned capital expenditures for the year to $2.25 billion, up $150 million, to support growth, efficiency and safety.

It aims to deliver double-digit EPS growth in 2014 over the adjusted diluted EPS of C$3.06 it posted in 2013, as well as free cash flow in the range of C$1.6 billion to C$1.7 billion.

The operating ratio — operating expenses as a percentage of revenues —deteriorated by 1.2 point to 69.6 per cent in the quarter, but was still better than Calgary-based rival Canadian Pacific Railway (TSX:CP) which reported Tuesday a ratio of 72 per cent.

Both railways have said the entire North American rail industry was affected by extreme weather in the quarter.

David Tyerman of Canaccord Genuity, for example, cut his earnings forecast for the railway by six cents per share because extreme cold and snowy conditions were expected to increase labour costs, slow trains and force them to stop longer in terminals. However, the lower Canadian dollar was expected to offset some of the impact, adding six to nine cents per share for the year.

The country's largest railway saw its volumes increase by 0.6 per cent in the quarter from the prior year, helped by new coal contracts, intermodal contracts won from Canadian Pacific, a 14 per cent increase in grain shipments and continued growth in transporting crude.

Revenue ton-miles — measuring the relative weight and distance of rail freight transported by CN — increased by five per cent.

Operating expenses increased by 11 per cent to $1.87 billion, mainly due to the weaker loonie and harsh winter.

CN's outlook for the year is good, powered by growth in 2014 from intermodal, crude-by-rail and the bumper grain crop.

The railway transports about $250 billion worth of goods annually across its network spanning Canada and mid-America.

Follow @RossMarowits on Twitter.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14458.69-68.88
S&P CDNX771.65-9.42
DJIA17195.42221.11
Nasdaq4566.138+16.912
S&P 5001994.65+12.35
CDN Dollar0.8936+0.0002
Gold1198.60-0.10
Oil80.73-0.17
Lumber322.40-1.20
Natural Gas3.715+0.066

 
Okanagan Companies
Pacific Safety0.11+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.150.00
Cantex0.045-0.015
Anavex Life Sciences0.1711-0.0089
Metalex Ventures0.0350.00
Russel Metals32.22-0.35
Copper Mountain Mining1.97-0.05
Colorado Resources0.14+0.005
ReliaBrand Inc0.012-0.004
Sunrise Resources Ltd0.05+0.025
Mission Ready Services0.375+0.005

 



23901

FEATURED Property
21018381145 Felix Road
3 bedrooms 2 baths
$394,495
more details
image2image2image2
Click here to feature your property
Please wait... loading


Empty nesting: financial issues

Now that the children have ‘left the nest’, it is a good time to step back and take stock of your financial situation. Being on your own will probably cut household costs to some extent, b...


Keep your haunted home safe

Eerie sounds, spooky lights and Jack-o’-lanterns aglow—extra efforts at Halloween will keep visitors coming back for both tricks and treats. However, to keep the fun going, it’s imp...


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...

_








Member of BC Press Council


23691