CN grows earnings on record Q1 volumes, revenues

Montreal, Canada-based Class I railway Canadian National saw its net income jump 12 percent year-over-year to C$884 million (U.S. $650 million) in first quarter 2017 on revenues that rose 8 percent percent to C$3.2 billion.    Canadian National Railway Co. (CN) saw net income jump 12 percent year-over-year to C$884 million (U.S. $650 million) in first quarter 2017, according to the company’s most recent financial statements.
   The Montreal, Canada-based Class I railway reported earnings per diluted share (EPS) of C$1.16 for the quarter compared with C$1.00 per share during the same 2016 period as revenues rose 8 percent to C$3.2 billion.
   CN attributed the strong performance primarily to higher volumes of Canadian and U.S. grain, frac sand, coal exports, overseas intermodal traffic, and finished vehicles; freight rate increases; and higher applicable fuel surcharge rates, which were offset in part by the strength of the Canadian dollar in relation to the U.S. dollar and its impact on U.S.-dollar-denominated revenues.
   Freight volumes were up 9 percent to 1.37 million carloads and intermodal units, even as overall revenue per carload slipped 1 one percent to $2,248.
   “I am very proud of the solid response from our team of railroaders in accommodating the strong demand during the quarter,” Luc Jobin, CN president and chief executive officer, said of the results. “We delivered record first-quarter volumes, including a 14 percent increase in Western Canadian grain tonnage moved over our network, despite a return to more demanding winter conditions versus last year.
   “Our ongoing investments in people, equipment and infrastructure continue to position us well to leverage CN’s industry-leading operational performance and superior customer service,” he added. “With a strong start in Q1 and an increased volume outlook for the rest of the year, I am pleased to announce an upward revision to our 2017 financial outlook.”
   Looking ahead to the remainder of the year, Jobin said CN is now projecting adjusted diluted EPS of between C$4.95 per share and C$5.10 per share for the full year compared with C$4.59 in 2016.
   CN has also increased its 2017 capital program from C$2.5 billion to C$2.6 billion, C$1.6 billion of which will be spent on track infrastructure improvements and maintenance. The additional C$100 million will go toward the purchase of 22 high-horsepower locomotives and “other projects to support growth,” the company said.