Rail News Home Canadian National Railway - CN 4/25/2017 Rail News: Canadian National Railway - CN
CN raised its outlook for the year after reporting "solid" first-quarter results that included increases in revenue, earnings and volumes, the Class I's executives announced yesterday.CN's Q1 volume included a 14 percent increase in Western Canadian grain that moved over the network, despite more demanding winter conditions this year compared to 2016, President and Chief Executive Officer Luc Jobin said in a press release.Revenue rose 8 percent to 3.2 billion in Canadian dollars, net income increased 12 percent to CA$884 million and diluted earnings per share (EPS) climbed 16 percent to CA$1.16 compared with last year's Q1 results.Adjusted net income rose 11 percent to CA$879 million, with adjusted diluted EPS increasing 15 percent to CA$1.15.Compared with the same period last year, carloadings for the quarter were up 9 percent and revenue ton-miles, 14 percent.CN posted an operating ratio of 59.4 percent, up 0.5 of a point from the prior-year quarter.Jobin described CN's results as a "solid response" in accommodating the strong demand during the first quarter."Our ongoing investments in people, equipment and infrastructure continue to position us well to leverage CN's industry-leading operational performance and superior customer service," Jobin said. "With a strong start in Q1 and an increased volume outlook for the rest of the year, I am pleased to announce an upward revision to our 2017 financial outlook."CN now aims to deliver a 2017 adjusted diluted EPS in the range of CA$4.95 to
CA$5.10, versus last year's adjusted diluted EPS of CA$4.59. On Jan. 24, the company's financial outlook called for mid-single-digit growth this year.Additionally, the Class I raised its capital expenditures program by CA$100 million to CA$2.6 billion, of which CA$1.6 billion is still targeted toward track infrastructure projects. The additional capital investment will be used to purchase 22 locomotives and other projects to support growth.The increase in revenue was mainly attributable to higher volumes of Canadian and U.S. grain, frac sand, coal exports, overseas intermodal traffic, and finished vehicles; freight rate increases; and higher applicable fuel surcharge rates. Those factors were partly offset by the negative translation impact of a stronger Canadian dollar on U.S.-dollar-denominated revenues. Operating expenses rose 9 percent, primarily due to higher fuel prices and costs associated with higher volumes, partly offset by the positive translation impact of a stronger Canadian dollar on U.S.-dollar-denominated expenses.
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