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Canadian National Railway - CN
Rail News: Canadian National Railway - CN
yesterday reported second-quarter revenue fell 19 percent to CA$3.2 billion from nearly CA$4 billion a year ago, as financial results reflected lower volumes due to the COVID-19 pandemic.
The Class I posted Q2 operating income of CA$785 million, down from CA$1.68 billion a year ago; net income of CA$545 million, down from CA$1.36 billion; and diluted earnings per share of 77 Canadian cents per share, down from CA$1.88. Adjusted earnings per share were CA$1.28, down from CA$1.73.
CN's logged an adjusted operating ratio of 60.4 percent for the quarter, up from 57.5 percent a year earlier.
Operating expenses for the quarter climbed 6 percent to CA$2.4 billion, mainly driven by a loss on assets held for sale resulting from the decision to market for sale for on-going rail operations, certain non-core lines, partly offset by lower fuel and and labor costs. Excluding that one-time charge, operating expenses fell 15 percent compared with Q2 2019's expenses.
The revenue decrease was attributed primarily to lower volumes across most commodity groups caused by the pandemic and lower applicable fuel surcharge rates, which were partly offset by increased shipments of Canadian grain, higher Canadian coal exports and freight rate increases.
"By being adaptable, we were able to swiftly rightsize our resources and continue to provide our essential transportation services to our customers, the economy and the communities we serve," said President and Chief Executive Officer JJ Ruest in a press release.
CN reaffirmed its CA$2.9 billion capital investment plan for 2020 and announced plans to purchase 1,500 new high-capacity covered hopper cars to expand its grain export business. Delivery is expected to start in January 2021.
"Our strategic long-term approach to investments, together with our continued focus on cost and deployment of innovative technology, as well as our commitment to enabling trade, position us to keep delivering long-term value to our stakeholders," Ruest said.