CN Railway raises full-year forecast as profit jumps
(Reuters) - Canadian National Railway Co beat the Street with a 17 percent rise in quarterly profit on Wednesday, reporting higher volumes in most of the products it ships due to a strike at rival CP Rail, and it raised its 2012 profit forecast.
CN, Canada's largest railroad, said it now expects adjusted profit for the year to rise by as much as 15 percent, up from the 10 percent growth it forecast in April.
It also said it expects to generate free cash flow of about C$1 billion ($981 million) for the year, up from its earlier estimate of C$950 million.
Even so, the company's shares dipped 0.5 percent on the Toronto Stock Exchange as analysts said expectations had been high for CN's results and outlook.
"They met a bar that has been raised... The company's guidance basically ended up being in line with what consensus was already at," said BMO Capital Markets analyst Fadi Chamoun.
CN's shares were down 0.5 percent at C$86.85 on the Toronto Stock Exchange late on Wednesday morning. They had been slightly higher earlier in the day.
CP's second-quarter net income rose to C$631 million, or C$1.44 a share, from C$538 million, or C$1.18 a share, a year earlier.
On an adjusted basis, the company earned C$1.50 a share, ahead of the C$1.48 a share that analysts had expected, according to Thomson Reuters I/B/E/S.
"Other than grain and fertilizers, CN registered solid traffic increases in every commodity group during the second quarter," Chief Executive Claude Mongeau said in a statement. Continued...