CN Railway reports lower earnings, signs of recovery
Canadian National Railway said it had net income of $387 million Canadian in the second quarter compared to Can$459 million in the same 2008 period. Revenues were Can$1.78 billion in the quarter, down 15 percent from the same 2008 period.
The company said the decline was due to “depressed North American and global economies driving lower volumes.”
CN said the results included a deferred income tax recovery of Can$28 million and costs of Can$2 million after-tax related to the acquisition of the principal rail lines of the Chicago-area short line the Elgin, Joliet and Eastern Railway.
The company noted that strengthening of the U.S. dollar affected the conversion of the company’s U.S.-dollar-denominated revenues and expenses, increasing second-quarter 2009 net income by Can$15 million.
“The second quarter of 2009 saw a continuation of significant weakness in most of our commodity groups as a result of the current recession in North America and difficult global economic conditions, with all groups but coal registering double-digit declines in carloadings,' said E. Hunter Harrison, president and chief executive officer. 'The biggest declines were in metals and minerals shipments, principally on account of a sharp reduction in short-haul iron ore movements in northern Minnesota, and in automotive and forest products traffic. Intermodal, grain and fertilizers, and petroleum and chemicals saw lesser declines. Coal was a bright spot, however, as a result of higher U.S. shipments resulting from our acquisition of the EJ&E.”
Harrison added: “We see some signs that several markets are stabilizing and we hope the economy will begin to recover in the second half of this year.”