CN Rail reports modest rise in third-quarter earnings

Canadian National Railway Co (CNR-T), Canada's largest rail operator, reported a modest increase in third-quarter profit on Monday, as revenue grew in all its business segments, and announced a share buyback program.

Net income rose to $664 million, or $1.52 a share, from $659 million, or $1.46 a share in the same period a year earlier. Excluding certain items, earnings per share were $1.38 in the year-earlier quarter.

CN said it would spend up to $1.4 billion to purchase up to 18 million shares in a buyback program.

CN's operating ratio, which measures operating costs as a percentage of revenue, increased by 1.3 percent to 60.6 percent. The lower the number, the more efficient the operation.

Operating expenses rose 10 percent to $1.5 billion on higher labor and benefit costs, the Montreal-based company said.

Revenue in the quarter increased 8 percent to $2.5 billion, while car loadings rose 3 percent.

Analysts, on average, expected earnings of $1.51 a share on revenue of $2.53 billion, according to Thomson Reuters I/B/E/S.

"While cautious about the strength of the economy, we see continued opportunities to grow our business in the longer term," chief executive officer Claude Mongeau said in a statement.

"CN expects to increase revenues slightly faster than general growth in the North America economy and to accommodate this growth at low incremental cost," he added.