A man walks into central station next to CN headquarters in Montreal, Tuesday, Nov. 26, 2019. THE CANADIAN PRESS/Graham Hughes

CN reports strong earnings growth as rail traffic recovers from COVID-19 pandemic

CN reports strong earnings growth as rail traffic recovers from COVID-19 pandemic

MONTREAL — Canadian National Railway Co. reported a strong uptick in earnings and revenues in its second quarter as the company begins to recover from the COVID-19 pandemic.

The Montreal-based railway earned $1.03 billion or $1.46 per share, up from $545 million or $0.77 per share in the first quarter of 2021. Excluding one-time items, adjusted profits were $1.06 billion or $1.49 per share, compared with $988 million or $1.28 per share in the first quarter.

Revenue for the three months ended June 30 was $3.60 billion, up from $3.21 billion the previous quarter.

The company also declared a dividend for its third quarter, of 61.5 cents per share to be paid in September.

In 2020, CN was forced to build longer and heavier trains due to the sharp retreat in rail volumes and customer demand during the COVID-19 pandemic. The company said in a news release that as the economy rebounds, it has been able to revert to its standard operating plan and improve train speeds.

The financial results come as the railway is awaiting a ruling from the U.S. Surface Transportation Board on its application for a voting trust for Kansas City Southern while its $33.6-billion takeover bid is analyzed by the regulator.

CN could be on the hook to pay the U.S. railway a US$1 billion penalty if the voting trust isn’t approved. That’s in addition to US$700 million it has agreed to pay KCS after it backed away from an agreement to be purchased by Calgary-based Canadian Pacific Railway Ltd.

This report by The Canadian Press was first published July 20, 2021.

Companies in this story: (TSX:CNR, TSX:CP)

The Canadian Press

CN Rail