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10/24/2001



Rail News: Rail Industry Trends

Third quarter brings double-digit earnings bump for CN, promising financial report card for NS


Similar to Union Pacific Railroad, CSX Transportation and Canadian Pacific Railway, the third quarter was a good one for Canadian National Railway Co.
CN Oct. 23 reported $240 million in net income, rising 11 percent, and $430 million in operating income, increasing 6 percent, compared with third-quarter 2000.
The Class I increased earnings despite flat quarterly revenues of $1.3 billion. CN also decreased operating expenses 3 percent to $895 million.
"In a challenging environment, we delivered double-digit gains in earnings and earnings per share," said CN President and Chief Executive Officer Paul Tellier in a prepared statement, "We stayed focused, reining in expenses as revenues softened toward the end of the quarter as a result of slowing industrial activity and decreased consumer demand."
CN's third-quarter 67.5 operating ratio improved 1.9 percent compared with 69.4 during the same 2000 period; the railroad's nine-month 69.4 ratio improved slightly compared with 70.1 during 2000's first nine months.
Meanwhile, Norfolk Southern Corp. Oct. 24 reported $245 million in third-quarter operating income — a 16 percent increase compared with $211 million during the same 2000 period.
Net income of $79 million decreased compared with last year's $99 million, but that figure included a $46 million gain from the sale of timber properties.
Although operating revenues dipped 2 percent to $1.51 billion, NS reduced operating expenses 5 percent to $1.26 billion.
"Our strategy will be to continue to focus on tightly controlling costs while we continue to launch new services to meet our customers' needs," said David Goode, NS chairman, president and CEO.
NS' third-quarter 83.8 operating ratio dropped 2.5 percent compared with third-quarter 2000's 86.3; the railroad's nine-month 84.2 ratio improved 4.6 percent compared with 88.8 during 2000's first nine months.


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