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Rail News Home Financials

10/19/2005



Rail News: Financials

CN's third-quarter report card: 'A' for earnings, income and operating ratio



During the third quarter, Canadian National Railway Co. overcame a few weather-related problems and offset escalating fuel costs to register solid financial figures. Yesterday, The Class I reported record quarterly net income of $411 million and operating income of $665 million, a 19 percent and 13 percent increase, respectively, compared with third-quarter 2004.

In addition, diluted earnings per share of $1.47 rose 24 percent and revenue totaling $1.81 billion increased 6 percent compared with the same 2004 period. Quarterly revenue was driven by higher rates and fuel surcharges, CN officials said in a prepared statement.

CN also continued to lower its operating ratio — which remains the best among the Class Is. During the quarter , the railroadd improved its ratio 2.1 points to 63.3 compared with third-quarter 2004.

“CN posted record third-quarter earnings … despite the headwinds of higher fuel costs, the effects of two hurricanes on our network in the Gulf Coast region of the United States and unfortunate accidents,” said CN President and Chief Executive Officer E. Hunter Harrison.

However, third-quarter operating expenses totaled $1.14 billion, a 2 percent increase compared with third-quarter 2004 primarily because of rising fuel, casualty and other expenses. In addition, the strong Canadian dollar reduced CN’s third-quarter net income by about $15 million.

During 2005’s first nine months, CN’s revenue totaled $5.35 billion, an 11 percent increase compared with the same 2004 period. The railroad’s net income totaling $1.1 billion and operating income totaling $1.9 billion rose 28 percent and 22 percent, respectively, and operating ratio of 64.4 improved 3.2 points.

But operating expenses rose 6 percent to $3.45 billion compared with 2004’s first nine months and the strong Canadian dollar decreased net income by about $45 million.


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