Watch Now


CN earnings pick up steam in Q4 2017

Montreal-based Class I railroad Canadian National (CN) saw its net income spike 156 percent for the quarter to $2.61 billion Canadian (U.S. $2.11 billion) compared with the same 2016 period, boosting full-year 2017 earnings 51 percent to C$5.48 billion.

Canadian National Railway (CN) saw earnings jump 156 percent to C$2.61 billion (U.S. $2.11 billion) in Q4 2017 thanks in large part to the enactment of a lower U.S. federal corporate income tax rate.

   Canadian National Railway’s (CN) earnings picked up some serious steam in the fourth quarter of 2017, spiking 156 percent to $2.61 billion Canadian (U.S. $2.11 billion) compared with the same 2016 period, according to the company’s most recent financial statements.
   The Montreal-based Class I railroad saw its diluted earnings per share (EPS) jump 164 percent year-over-year to C$3.48 per share on revenues that rose 2 percent to C$3.29 billion for the quarter.
   CN attributed the growth in large part to a deferred income tax recovery of C$1.76 billion (C$2.35 per diluted share) resulting from the enactment of a lower U.S. federal corporate income tax rate.
   The strong fourth quarter performance helped boost CN’s full-year 2017 earnings 51 percent to C$5.5 billion (C$7.24 per diluted share) as revenues grew 8 percent to C$13.04 billion.
   “Our growth continues to outpace the strengthening economy, and I am pleased with the results our dedicated team generated in 2017,” Luc Jobin, president and chief executive officer of CN, said of the results. “Throughout the year, we faced rapidly changing market demands, and in the fourth quarter, dealt with challenging operating conditions, including harsh early winter weather across the network, impacting our performance.
   “We remain focused on operational efficiency and providing quality service to our customers,” he added. “In 2018, we are adding new train crews and increasing our capital program to a record C$3.2 billion as we invest in locomotives and build additional capacity for resiliency.”
   During the fourth quarter, CN saw year-over-year revenue increases in its metals and minerals (20 percent) business, as well as intermodal (13 percent), coal (7 percent) and automotive (1 percent). Revenues declined, on the other hand, for grain and fertilizers (-10 percent), petroleum and chemicals (-5 percent), forest products (-2 percent) and “other” revenues (-1 percent).
   The company attributed the increase in revenues primarily to higher international container traffic via the ports of Prince Rupert and Vancouver, as well as increased volumes of frac sand, freight rate increases, and higher applicable fuel surcharge rates, adding that these factors were offset in part by the negative translation impact of a stronger Canadian dollar, lower export volumes of U.S. soybeans, and reduced shipments of crude oil.
   Volumes for the quarter were up 7 percent to 1.46 million carloads compared with the fourth quarter of 2017, boosting overall transport volumes 10 percent to 5.74 million units for the entire 2017 year.
   Looking ahead to 2018, Jobin said CN expects to see further volumes growth this year thanks to continued favorable economic conditions in North America.
   The company aims to deliver adjusted diluted EPS in the range of C$5.25 to C$5.40 for 2018 compared to adjusted diluted EPS of C$4.99 last year.