CN’s net income up 10%

CNÆs net income up 10%    Canadian National Railway Co. said third-quarter net income improved 10 percent to Can$294 million ($223.4 million) despite a 13-percent year-over-year appreciation of the Canadian dollar against the U.S. dollar.
   Operating income declined 6 percent to Can$454 million ($345.0 million) while revenues were off 6 percent to Can$1.41 billion ($1.10 billion). Operating expenses declined 6 percent to Can$959 million ($728.8 million). Operating ratio was flat, at 67.9 percent.
   'CN turned in a good performance this quarter, powered in large measure by increased intermodal revenues, the recovery in Canadian grain shipments following last year's drought, a solid story on expense control and favorable tax adjustments,' said E. Hunter Harrison CN's president and chief executive officer.
   The year-over-year appreciation of the Canadian dollar against the U.S. dollar reduced revenues for the quarter by Can$100 million ($76.0 million), though the stronger Canadian dollar helped expenses by Can$70 million ($53.2 million), Harrison said. The currency value difference also reduced operating income by Can$30 million ($22.8 million) and net income by Can$14 million ($10.6 million), CN said.
   For the nine-month period ending Sept. 30, net income was Can$790 million ($600.4 million), up from Can$778 million for the year-earlier period. The nine-month net income included a cumulative after-tax benefit of Can$48 million ($36.5 million) resulting from a change in accounting for removal costs for certain track structure assets, CN said.
   Operating income declined 8 percent to Can$1.27 billion ($965.2 million), revenues fell 4 percent to Can$4.37 billion ($3.32 billion) and operating expenses declined 2 percent to Can$3.11 billion ($2.36 billion). The operating ratio was 71.1 percent, up from 69.8 percent for the year-earlier period.
   CN said it would make required filings Wednesday with the Canadian securities regulators and the U.S. Securities and Exchange Commission with respect to a preliminary shelf prospectus providing issuance by CN of up to $1 billion of debt securities in Canadian and U.S. markets.
   CN said it expects to use net proceeds of the sale of debt securities for general corporate purposes, including redemption and refinancing of outstanding debt, acquisitions and other business opportunities.