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's 4Q results cap off 'strong performance' for 2010, Mongeau says


CN posted "solid performance" in fourth-quarter 2010, capping off a "very strong performance" for the year, President and Chief Executive Officer Claude Mongeau said during Tuesday’s earnings webcast and teleconference.

CN’s net income fell 13.6 percent to $504.3 million compared with $584 million in fourth-quarter 2009; however, net income rose 19 percent after factoring in a rail-line sale and a deferred income-tax recovery.  

Earnings per diluted share were $1.08, up 20 percent compared with 90 cents per diluted share during the same period a year earlier.

Operating income increased 18.5 percent to $777 million; revenue jumped 12 percent to $2.1 billion; and the operating ratio improved to 63.4 compared with 65.3 during fourth-quarter 2009.

CN recorded revenue growth in all commodity groups for the quarter. Coal, driven in part by strong Asian demand, was up 22 percent; intermodal, 17 percent; grain and fertilizers, 13 percent; metals and minerals, 13 percent; petroleum and chemicals, 10 percent; automotive, 10 percent; and forest products, 8 percent. Carloads and revenue ton-miles increased 10.5 percent to 1.2 million.

For 2010, CN posted net income of $1.98 billion, or $4.22 per diluted share, compared with $1.54 billion, or $3.25 per diluted share, in 2009. Revenue rose 13 percent to $8.3 billion, compared with $7.4 billion a year earlier. Carloads and revenue ton-miles soared to 4.7 million units, up 18 percent from 3.99 million units in 2009.

In addition, free cash flow increased to $1.13 billion from $793 million in 2009.

In terms of operating expenses, CN’s quarterly costs rose 12 percent to $1.35 billion. Fuel costs rose 24 percent, while labor and fringe benefit expenses increased by 2 percent.

For the full year, costs climbed 6 percent to $5.3 billion, mainly due to higher fuel costs, increased labor and fringe benefits, and higher depreciation and amortization expenses. Those factors were offset partly by a stronger Canadian dollar vs. the U.S. dollar, Elgin Joliet & Eastern Railway Co. (EJ&E) acquisition-related expenses recorded in 2009, and lower equipment rents, CN officials said in a prepared statement.

For the full year, CN's operating ratio was 63.6, compared with an adjusted operating ratio — excluding the EJ&E acquisition-related costs — of 66.7 in 2009, a 3.1 point improvement.

Looking ahead, CN believes "the North American economy will continue to recover, but at a slower pace than in 2010," Mongeau said.

CN officials believe North American industrial production will increase by 4 percent, U.S. housing starts to be 675,000 units and U.S. motor vehicle sales to be 13 million units for the year. They’re also assuming there will be a weaker grain crop. With those assumptions, CN is projecting carload growth in the mid-single digit range.

The Class I also intends to invest $1.7 billion in capital programs, including $1 billion on track infrastructure improvements, as well as other projects to support the company’s productivity and growth initiatives. Projects include a $100 million Calgary Logistics Park and intermodal terminal, and $100 million to enhance connections of the EJ&E.

Julie Sneider