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CN Rail third-quarter earnings rise 19%


Canadian National Railway Co (CNR-T) reported a 19 percent rise in third-quarter profit Tuesday thanks to record carloadings and revenues, strong operational execution and cost controls.

CN, Canada's biggest railroad, said earnings rose to $659 million, or $1.46 a diluted share, in the three months to the end of September.

That compared with earnings of $556 million, or $1.19 a share, a year ago.

The results included an after-tax gain of $38 million, or 8 cents a share, on the sale of almost all of the assets of IC RailMarine Terminal Co.

Adjusted to exclude the sale, earnings came in at $1.38 a share. Analysts, on average, had expected CN to earn $1.31 a share.

Revenue increased 9 percent to $2.3 billion, in line with analysts' expectations.

"The 4 percent rise in carloadings and 9 percent increase in revenues outpaced general economic activity during the quarter, reflecting CN's improved service and market positioning," Chief Executive Claude Mongeau said in a statement.

CN also announced a new share repurchase program, to be launched on Oct. 28, to buy back up to 17 million common shares.

The company said its operating ratio -- an important measure of a railroad's productivity -- fell to 59.3 percent in the quarter, a 1.4-point improvement over the 60.7 percent ratio a year ago.

The lower the ratio, which measures operating costs as a percentage of revenue, the more efficient the railway. CN has one of the lowest ratios among railroads in North America.

CN's earnings come a few hours after smaller rival Canadian Pacific Railway reported a 5-percent fall in third quarter earnings and laid out a winter operating plan to prevent a repeat of the service disruptions it encountered earlier this year from harsh weather. CTV Two CTV News CTV News Channel BNN - Business News Network CP24