Canadian railway CN’s adjusted net profit for the second quarter of 2021 grew over 16% year-over-year amid a nearly 14% increase in freight revenues.
Adjusted net income for CN (NYSE: CNI) in the second quarter of 2021 was CA$1.06 billion, or CA$1.49 per adjusted diluted share, which is 16.5% higher than CA$908 million, or CA$1.28 per adjusted diluted share, in the second quarter of 2020.
One Canadian dollar equals about 79 cents U.S., which would put CN’s second-quarter adjusted net profit at about $834 million in U.S. dollars.
CN noted that it saw a 13% increase in revenue ton miles as the railway experienced volume growth throughout its segments and particularly within industrial products, international and domestic intermodal, and propane.
Freight revenues were nearly CA$3.5 billion, compared with CA$3 billion a year ago, while operating income was CA$1.4 billion, compared with CA$785 million in the second quarter of 2020.
Operating expenses slipped 9% to CA$2.2 billion, “mainly driven by the [CA]$486 million loss on assets held for sale recorded in the second quarter of 2020, as well as the positive translation impact of a stronger Canadian dollar, partly offset by higher fuel costs and higher incentive compensation,” CN said.
Service metrics improved as CN took steps last year to modify operations amid the COVID-19 pandemic-induced volume trough, according to CN. As volumes returned to normal, CN reverted to its standard operating plan, which focuses on car velocity and through dwell, the railway said.
Through dwell improved by 8% to 7.7 hours, while car velocity, or the number of car miles per day, improved by 4% to 205 miles from 197 miles a year ago. Network speeds were roughly flat, at 19.5 mph versus 19.9 mph in the second quarter of 2020.
“CN continued to deliver strong operating and financial performance in the second quarter, driven in large part by the dedication of our people and the ongoing long-term investments we are making in our network, equipment, technology and talent,” CN President and CEO JJ Ruest said in a release. “We enter the second half of 2021 focused on executing for our customers and leveraging our strong network performance to safely and sustainably drive long-term value creation for all of our stakeholders.”
The railway affirmed that it still hopes to acquire Kansas City Southern (NYSE: KSU). A proposed voting trust is pending before federal regulators. CN wants the voting trust to be approved by the Surface Transportation Board so that the merger can proceed.