1/25/2017
Rail News: Canadian National Railway - CN
The Class I posted Q4 2016 net income of 1 billion Canadian dollars, or CA$1.32 diluted earnings per share, compared with Q4 20154 net income of CA$941 million, or CA$1.18 diluted earnings per share, according to a CN press release.
Revenue in the quarter increased 2 percent to CA$3.2 billion compared with Q4 2015, as carloads rose 3 percent and revenue per ton mile jumped 4 percent.
"Despite facing difficult winter conditions in December, CN delivered very strong fourth-quarter results and throughout 2016 demonstrated once again its ability to perform well in a mixed economic environment," said CN President and Chief Executive Officer Luc Jobin.
For full-year 2016, CN posted net income of CA$3.64 billion, or CA$4.67 diluted earnings per share, compared with 2015 net income of $3.5 billion, or CA$4.39 diluted earnings per share.
Revenue for 2016 decreased 5 percent to CA$12 billion compared with 2015. Revenue increases in automotive (6 percent), forest products (4 percent), and grain and fertilizers (1 percent) were offset by revenue decreases in coal (29 percent), metals and minerals (15 percent), petroleum and chemicals (11 percent) and intermodal (2 percent), company officials said.
The decrease in total revenue was primarily due to lower volumes in crude oil, coal and frac sand, as well as lower applicable fuel surcharge rates, they said.
Carloadings in 2016 declined 5 percent compared with 2015.
CN's operating expenses for the year decreased 8 percent to CA$6.72 billion.
The reduction in expenses was attributed mainly to cost-management initiatives, decreased traffic, lower pension expenses and fuel costs, which were partly offset by the negative translation impact of a weaker Canadian dollar on U.S. dollar-denominated expenses.
CN's operating ratio for 2016 was 55.9 percent, an improvement over the 2015 operating ratio of 58.2 percent.
"We saw weaker volumes during the year, but quickly adjusted as our dedicated team of railroaders maintained its focus on operational efficiency, while continuing to provide quality service to our customers and improve our safety performance," Jobin said.
"Overall, the economy remains challenging, but we remain optimistic and expect to see moderate volume growth in 2017," he added.