Busy B.C. ports lift CN profit
Brent Jang, The Globe and Mail
4:34 PM, E.T. | July 25, 2011Industrials
Brisk imports at B.C. ports in Vancouver and Prince Rupert helped lift Canadian National Railway Co.’s (CNR-T) second-quarter profit.
The country’s largest railway posted a $538 million profit for the three months ended June 30, up almost 1 percent from the same period in 2010. Quarterly share profit rose to $1.18 from $1.13 while revenue climbed 8 per cent to $2.26-billion.
Montreal-based CN said Monday that the market has been bustling for “intermodal” freight, or goods transported inside standardized metal containers that are readily transferred among ships, trains and trucks.
“Intermodal was one of the first areas where we applied our new end-to-end supply chain collaboration approach,” CN Chief Executive Officer Claude Mongeau said in a statement. “This approach is really starting to pay off, and we hope to enjoy gains in other segments of our business where we have brought forward a similar focus on innovation and service excellence.”
The railway’s operating ratio, a key indicator of productivity that measures operating costs as a percentage of revenue, increased slightly from 61.2 percent to 61.3 percent. A lower operating ratio is better.
Mongeau said CN faced a series of challenges in the spring, including floods, forest fires and mudslides.
Despite the weather-related setbacks, CN confirmed its previous financial guidance issued in April, saying it expects double-digit, adjusted earnings per share growth of up to 15 percent this year, compared with $4.20 a share in 2010.
“While there is some growing uncertainty about the pace of growth of the U.S. and global economies, we believe our performance in the first half of 2011 positions us to finish the year on a positive note,” Mongeau said.
CN noted that excluding net deferred income tax expense, its adjusted EPS in the second quarter came in at $1.26, up 12 per cent over the same period in 2010.