Monday, July 21, 2014

CN 2Q earnings show strength

Written by 
CN President and CEO Claude Mongeau CN President and CEO Claude Mongeau

Rebounding from a first quarter hampered by what its CEO called the "winter of a lifetime," CN late Monday, July 21, 2014 reported second-quarter net income of C$847 million (US$789 million), up 18% from C$717 million in the second quarter of 2013.

Earnings per diluted share of C$1.03 (96 U.S. cents) rose 24% above earnings per diluted share of 83 Canadian cents.

Revenue rose 17% to C$3.1 billion  (US$2.9 billion), CN said. The railroad's operating ratio improved 1.3 points to 59.6% in the second quarter, compared with 60.9% in the comparable quarter of a year ago.

CN President and CEO said in a statement, "CN recovered swiftly from the first-quarter winter weather challenges, just as our customers would expect us to do, thanks to solid execution by our dedicated team of railroaders. CN delivered record volumes in the quarter by bringing its key supply chains back into sync and taking advantage of continued strength in several of our core markets. This solid operational recovery underscores our ability to accommodate growth at low incremental cost and to drive very strong financial results."

CN said its Western Canada grain hopper car movements were particularly strong during the second quarter, up nearly 70 per cent from the year-earlier period. The railroad expects such hopper car movements for the crop-year ending July 31, 2014, to be a new record and close to 25% higher than average crop-year movements.

Mongeau added, "We are pleased that the Canadian grain supply chain CN serves is now back in sync. Our wait-list of customer grain car orders represents only about one week of shipments from the Prairies, and grain vessel line-ups at all ports are back to normal."