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Rail News: Canadian National Railway - CN
CN: Q4 adjusted net income down 6 percent
CN reported fourth-quarter 2017 adjusted net income decreased 6 percent to CA$897 million and adjusted diluted earnings per share (EPS) fell by 2 percent to CA$1.20.
The results exclude the impact of changes in the U.S. corporate tax rate under the new Tax Cuts and Jobs Act. Including the tax benefit, CN reported Q4 2017 net income soared 156 percent to CA$2.6 billion and diluted EPS jumped 164 percent to CA$3.48 compared with Q4 2016's results, CN officials said in a press release.
Operating income for the quarter fell 7 percent to CA$1.3 billion, but revenue climbed 2 percent to CA$3.3 billion compared with a year ago.
CN's operating expenses in the quarter increased 9 percent to CA$1.98 billion compared with the previous year's quarter. The Class I posted an operating ratio of 60.4 percent, an increase of 3.8 points over Q4 2016's ratio.
For full-year 2017, CN's adjusted net income climbed 6 percent to CA$3.78 million and adjusted diluted EPS jumped 9 percent to CA$4.99. Operating income increased 5 percent to CA$5.6 billion compared with the previous year.
CN's revenue rose 8 percent year over year to CA$13 billion. Operating expenses for 2017 jumped 11 percent to CA$7.5 billion.
The Class I's 2017 operating ratio of 57.4 percent was up 1.5 points over 2016 operating ratio.
"Our growth continues to outpace the strengthening economy, and I am pleased with the results our dedicated team generated in 2017," said President and Chief Executive Officer Luc Jobin. "Throughout the year we faced rapidly changing market demands and in the fourth quarter dealt with challenging operating conditions, including harsh early winter weather across the network, impacting our performance."
CN remains focused on operational efficiency and improving the quality of customer service, he said.
"In 2018 we are adding new train crews and increasing our capital program to a record CA$3.2 billion as we invest in locomotives and build additional capacity for resiliency," said Jobin.
CN expects to see continued volume growth this year, he added. To support that growth, the Class I will spend the CA$3.2 billion on capital projects, including CA$800 million for investments to increase capacity. Those investments will feature the purchase of 60 new locomotives, expansion of track infrastructure and improvements at intermodal terminals.
Additionally, the capital program will include CA$1.6 billion for track infrastructure maintenance to support safety and efficiency, and CA$400 million for continued installation of positive train control in the United States.
Contact Progressive Railroading editorial staff.