CN’s first quarter net income up 42%

CN’s first quarter net income up 42%    Canadian National Railway Co.'s first-quarter net income increased 42 percent to C$299 million ($241 million) from C$210 million in the same period of 2004.
   Operating income for the first three months was up 33 percent to C$526 million ($425 million) from C$395 million. Revenues increased 19 percent to C$1.7 billion ($1.4 billion) from C$1.4 billion.
   CN reported double-digit revenue increases for five of its seven commodity groups. Metals and minerals jumped 49 percent to C$199 million ($161 million); forest products were up 26 percent to C$404 million ($326 million); intermodal traffic revenues were up 26 percent at C$287 million ($232 million); coal increased 18 percent to C$79 million ($64 million); petroleum and chemicals rose 10 percent to C$275 million ($222 million); and grain and fertilizers were up 8 percent to C$276 million ($223 million). Automotive revenues declined 6 percent at C$122 million ($99 million).
   CN said revenues were also boosted by C$121 million ($98 million) in revenues from the rail and related holdings of Great Lakes Transportation and BC Rail, whose operations CN consolidated last year.
   “Our strong performance was driven by a number of factors,” said E. Hunter Harrison, president and chief executive officer of CN. “A solid economy, revenue gains from CN’s 2004 acquisitions, a higher fuel surcharge, freight rate increases, and a return to more normal traffic levels following the first-quarter 2004 Canadian Auto Workers strike.”
   CN said that 30-day Canadian Auto Workers strike at the start of last year reduced its first quarter 2004 net income by C$24 million ($19 million).
   CN’s operating expenses for first quarter 2005 increased 13 percent to C$1.2 billion ($1 billion), including a 36 percent rise in fuel costs to C$166 million ($134 million). CN said the continued appreciation of the Canadian dollar affected the conversion of CN’s U.S. dollar-denominated revenues and expenses, and, accordingly, reduced the company’s first-quarter 2005 net income by approximately C$15 million ($12 million); operating income by about C$25 million ($20 million); and revenues by approximately C$60 million ($48 million).
   CN shares on the Toronto Stock Exchange fell 22 cents, or by 0.3 percent, to C$72.22 at close Wednesday.