Friday, July 23, 2010

CN second-quarter earnings rise

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Canadian National late Thursday reported second-quarter earnings of C$534 million (US$514 million), or C$1.13 a share, compared with C$387 million, or 82 Canadian cents a share, in the second quarter of 2009. Revenue was C$2.09 billion (US$2.01 billion), up from C$1.78 billion in the year-ago period, attributed to higher freight volumes. Revenue ton miles increased by 15%, CN said.

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CN’s operating ratio also was robust, improving by 6.1 percentage points to 61.2%. The improvement came despite the strength of the Canadian dollar relative to its U.S. counterpart, which hindered earnings from operations in the U.S.

“We’ve had very, very strong first-half results and we expect the economy to continue on its gradual course of recovery,” Luc Jobin, CN chief financial officer, said during a conference call. “We do expect the pace of growth to be lower in the second half ... [but] we do not expect a double-dip economic scenario at this point.”

CN also said it will make a voluntary C$250 million payment to its pension plan. “We feel that it is prudent, given the lessthan stellar equity returns that we have seen and the prospect for a continued low interest rate environment at least for the short term,”  Jobin said.