Media Kit » Try RailPrime™ Today! »
Progressive Railroading
Newsletter Sign Up
Stay updated on news, articles and information for the rail industry

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

View Current Digital Issue »


Rail News Home Canadian National Railway - CN


Rail News: Canadian National Railway - CN

CN: Record revenue, volume part of 'solid' 2Q results


"Solid team execution" helped CN register solid top-line growth in the second quarter, said President and Chief Executive Officer Claude Mongeau during an earnings conference held late yesterday afternoon.

Revenue rose 4 percent to a record $2.7 billion as carloads increased 2.4 percent to a 2Q-best 1.3 million units compared with second-quarter 2012 results (financial figures were reported in Canadian dollars). CN also set records for gross ton-miles at 101.5 million and revenue ton-miles at 52.7 million.

The Class I posted improvements in every key operational metric and grew revenue in every commodity sector except coal and automotive, said Mongeau. For example, car velocity — which CN senior executives consider the most important service metric because it provides a broader picture of how the railroad is performing — improved to 220 rail-car miles in the quarter versus 211 miles in second-quarter 2012 and 202 miles in second-quarter 2011.

Overall, 2Q revenue growth was driven by rate increases, higher volumes due to strong energy markets and market share gains, growth in the North American economy and a positive translation impact of a weaker Canadian dollar on U.S.-dollar-denominated revenue, CN senior execs said during the conference.

By sector, petroleum and chemicals revenue jumped 18 percent to $478 million; metals and minerals revenue rose 3 percent to $304 million; forest products revenue increased 3 percent to $358 million; grain and fertilizers revenue climbed 4 percent to $383 million; intermodal revenue ratcheted up 3 percent to $543 million; coal revenue was flat at $187 million; and automotive revenue fell 4 percent to $148 million. Crude-by-rail revenue shot up 150 percent to nearly $100 million, frac sand revenue climbed about 50 percent and potash revenue soared 40 percent.

For the quarter, CN also reported record operating income of $1 billion, up 6 percent; diluted earnings per share of $1.69, up 17 percent; net income of $717 million, up 14 percent; an operating ratio of 60.9, down 0.4 points; and operating expenses of $1.6 billion, up 3 percent. Although labor and fringe benefit costs dipped 2 percent to $498 million, purchased services and material costs climbed 11 percent to $341 million and fuel costs rose 5 percent to $402 million.

For the remainder of 2013, CN expects to pursue additional business-growth opportunities and continue to tightly manage costs while maintaining the solid momentum generated in the second quarter, said Mongeau.

"Clearly, there's a soft patch in terms of demand, particularly in the third quarter, and we hope the economy will continue to help us in the fourth quarter," he said. "But we are gearing up to meet our full-year outlook and deliver solid performance for our shareholders."

Jeff Stagl

Contact Progressive Railroading editorial staff.

More News from 7/23/2013