CN Q1 profits rise 12 per cent, ups outlook

MONTREAL — Canadian National Railway raised its outlook for the year after profits increased 12 per cent on record first-quarter volumes, helped by an increase in Western Canadian grain.

The Montreal-based railway said Monday it expects to earn between $4.95 and $5.10 per adjusted diluted share for the year, an increase of eight to 11 per cent from last year. In January it forecast a growth of around five per cent.

It expects revenue-ton mileage volume will grow about 10 per cent compared to three to four per cent in 2016.

CN (TSX:CNR) also increased its capital spending program by $100 million to $2.6 billion, including $1.6 billion for track infrastructure. The extra money will be used to purchase 22 high-horsepower locomotives and other projects.

The revision came as CN Rail earned $884 million, or $1.16 per diluted share for the three months ended March 31, compared to $792 million or $1 per share a year earlier.

Excluding one-time costs, it earned $879 million or $1.15 per share.

Revenues grew eight per cent to $3.21 billion.

The country’s largest railway’s volumes were helped by a 14 per cent increase in grain shipments despite demanding winter conditions.

“Obviously a very strong start to the year,” CEO Luc Jobin said during a conference call from Regina, where the company will hold its annual meeting on Tuesday.

He said the railway was helped by improving commodity prices and growth in a number of sectors, including potash, frac sand, intermodal, coal, grain and automotive.

“We’ve been known to be a tad conservative, but when we see it and we can touch it and we can feel it, we are confident that we can nail it. And so with that in mind, that’s why we raised our guidance,” he told analysts.

Higher revenues were led by coal (up 39 per cent), grain and fertilizers (16 per cent), metals and minerals (16 per cent), automotive (10 per cent), intermodal (seven per cent), and petroleum and chemicals (one per cent). Forest product revenues declined three per cent.

Grain volumes rose 14 per cent as the railway moved 55 per cent of Canadian grain in the quarter, up from 51 per cent from the same period last year.

CN Rail was expected to earn $1.13 per share in adjusted profits on $3.21 billion of revenues, according to analysts polled by Thomson Reuters.

The railway says its operating ratio, which measures its efficiency, deteriorated by 0.5 of a percentage point on higher fuel prices.

CN said its net income would have been $22 million higher had the Canadian dollar been at the same level as last year.

Follow @RossMarowits on Twitter.

Just Posted

Auditor general flags Royal Military College for costs, cadet behaviour

The Royal Military College of Canada has taken another blow to its… Continue reading

CP Holiday train will stop in some Central Alberta communities

The popular train will feature entertainment from Colin James and Emma-Lee

After death of 8th child, Ikea relaunches dresser recall in U.S and Canada

NEW YORK — Ikea relaunched a recall of 29 million chests and… Continue reading

Red Deer agency supporting for LGBTQ2S+ youth

New report on LGBTQ2S+ youth from the Office of the Child and Youth Advocate

Decision on Haitians’ status in the U.S. has Canada on alert for asylum seekers

OTTAWA — A decision by the Trump administration to end a temporary… Continue reading

VIDEO: Replay Red Deer: Nov. 19

Watch news highlights from the week of Nov. 13

Red Deer Christmas Bureau to help 1,300 children this year

Demand is high, but Red Deer always provides

CP Holiday train will stop in some Central Alberta communities

The popular train will feature entertainment from Colin James and Emma-Lee

Kittens rescued after allegedly being tossed from vehicle

Couple finds abandoned kittens new home through Facebook

VIDEO: ‘Party bus’ goes up in flames in Vancouver

Fire crews responded to the late night blaze

Chicken crosses B.C. road, stops traffic

Rooster makes early morning commuters wait in Maple Ridge

Red Deerian honours her brother who died in a motorcycle collision

Houaida Haddad is encouraging Red Deer residents to donate blood

Red Deer County firefighters to be recognized for Waterton help

RCMP brass will give formal recognition Monday

Ron James tries to lighten humanity’s load through humour

The comedian returns to Red Deer for shows Dec. 1 and 2

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month