CN posts stable 2016 profits despite declining volumes, revenues

Montreal, Canada-based Class I railway Canadian National saw net income tick up 2.9 percent year-over-year to C$3.64 billion (U.S. $2.78 billion) in 2016 on revenues that slid 4.6 percent to C$12 billion.    Canadian National Railway Co. (CN) saw net income tick up 2.9 percent year-over-year in 2016 to C$3.64 billion (U.S. $2.78 billion), according to the company’s most recent financial statements.
   The Montreal, Canada-based Class I railway reported earnings per diluted share (EPS) of C$4.67 for the full year in 2016 compared with C$4.39 per share in 2015.
   Revenues, on the other hand, dropped 4.6 percent to C$12 billion as carload volumes and revenue ton miles each slid 5 percent from the previous year.
   The company attributed the revenues decline primarily to lower volumes of crude oil, coal and frac sand, as well as lower applicable fuel surcharge rates, which were offset in part by a weaker Canadian dollar and increases in freight rates.
   CN reduced 2016 operating expenses 8 percent to C$6.72 million thanks to those lower volumes and internal cost cutting measures. The company also improved its operating ratio 2.3 percentage points from the previous year to 55.9 percent for 2016.
   “Despite facing difficult winter conditions in December, CN delivered very strong fourth-quarter results, and throughout 2016, demonstrated once again its ability to perform well in a mixed economic environment,” CN President and CEO Luc Jobin said in a statement.
   “We saw weaker volumes during the year, but quickly adjusted as our dedicated team of railroaders maintained its focus on operational efficiency, while continuing to provide quality service to our customers and improve our safety performance.”
   Looking ahead to 2017, CN said it expects to grow EPS in the mid-single-digit range from full-year 2016 levels.
   “Overall, the economy remains challenging, but we remain optimistic and expect to see moderate volume growth in 2017,” Jobin said.