CN increases net income 18% in Q3

Canadian National Railway posted a net income of $1.01 billion Canadian on revenues of $3.2 billion Canadian for the third quarter of 2015.    Canadian National Railway (CN) posted an 18 percent increase in net income to $1.01 billion Canadian (U.S. $768.99 million) for the third quarter of 2015 compared to the third quarter of 2014.
   Diluted earnings per share for the third quarter increased to $1.26 Canadian per diluted share from $1.04 Canadian per diluted share in last year’s third quarter.
   Revenues at the railway increased 3 percent to $3.22 billion Canadian.
   “The revenue performance was mainly attributable to the positive translation impact of the weaker Canadian dollar on U.S.-dollar-denominated revenues; freight rate increases; strong overseas intermodal demand, higher volumes of finished vehicle traffic, and increased shipments of lumber and panels to U.S. markets,” CN said in a statement. “These factors were partly offset by a lower applicable fuel surcharge rate; decreased shipments of coal due to weaker North American and global demand; reduced shipments of energy-related commodities including crude oil, frac sand and drilling pipe; lower volumes of semi-finished steel products and short-haul iron ore; as well as lower volumes of Canadian grain versus the prior year’s record crop.”
   In individual business segments, compared to the third quarter of 2014, freight revenues for automotive increased 13 percent to $180 million Canadian; forest products increased 12 percent to $441 million Canadian; intermodal increased 5 percent to $764 million Canadian; petroleum and chemicals increased 3 percent to $609 million Canadian; grain and fertilizers increased 2 percent to $479 million Canadian; while coal fell 13 percent to $161 million Canadian; and metal and minerals decreased 3 percent to $377 million Canadian.
   Carloadings for the quarter dropped 6 percent to 1.39 million.
   Revenue ton miles were down 6 percent to 55.33 billion, while the railway’s operating ratio improved by 5 percentage points to 53.8 percent.
   CN’s Board of Directors approved a fourth-quarter 2015 dividend on the company’s common shares outstanding. “A quarterly dividend of thirty-one-and-one-quarter cents (C$0.3125) per common share will be paid on Dec. 31, 2015, to shareholders of record at the close of business on Dec. 10, 2015,” CN said.
   The Board of Directors also granted approval for a new share repurchase program. The new normal-course-issuer bid, which starts today and ends no later than Oct. 29, 2016, allows the railway to purchase, for cancellation, up to 33 million common shares. This represents 4.9 percent of the 679,543,061 common shares issued and outstanding of the railway not held by insiders on Oct. 16, 2015, when 793,033,310 CN common shares were issued and outstanding.
   “The price to be paid by CN for its open market purchases of common shares will be the market price at the time of acquisition, plus brokerage fees,” CN said. “Purchases made under issuer bid exemption orders will be at a discount to the prevailing market price as per the terms of the order.”
    CN shares closed at U.S. $62.10 on Oct. 29.