CN Rail earnings rise despite bad weather
Canadian National Railway (CNR-T) reported a 31-percent rise in quarterly profit Tuesday on the back of an improving North American economy and a well-executed winter operating plan.
CN, Canada's biggest railway, raised its full-year financial forecast and said it now expects diluted earnings per share growth of up to 15 percent this year. The stronger outlook reflects solid first-quarter results and expectations that economic conditions will keep strengthening.
In CN's initial outlook in January, it only said it was aiming for double-digit earnings growth in 2011.
"Looking forward, CN anticipates strong demand from most business segments for the balance of the year," Chief Executive Claude Mongeau said in a statement.
Net income rose to $668 million, or $1.45 a share, in the three months to the end of March, from $511 million, or $1.08 cents, a year earlier.
Excluding an after-tax gain of $254 million, or 55 cents a share, from a rail-line sale to a Toronto-area transit agency, CN reported adjusted diluted EPS of 90 cents, up 12.5 percent on a year ago.
Revenue increased 6 percent to $2.08 billion.
Analysts had expected adjusted earnings of 88 cents a share on revenue of $2.1 billion, according to Thomson Reuters I/B/E/S.
CN's operating ratio, an important barometer measuring the railway's operating efficiency, inched lower to 69 percent from 69.3 percent a year ago. The lower the ratio, the more efficient the railway.
CN's results come days after its smaller rival Canadian Pacific Railway reported a surprisingly sharp 67 percent plunge in first-quarter profit as harsh winter weather, including avalanches, hampered its operations.