CN Railway results get boost from energy, market share gains
By Susan Taylor and Solarina Ho
TORONTO (Reuters) - Canadian National Railway Co (CNR.TO: Quote), the focus of fresh scrutiny after one of its trains derailed and caught fire last weekend, reported a market-beating third-quarter profit and record revenue on Tuesday, as it announced a two-for-one stock split and share buyback plan.
The country's largest rail operator, which maintained its 2013 profit and spending forecast, said revenue was lifted by higher freight volumes due to strong energy demand, market share gains and a North American economic recovery.
"We had a slow start in June and July, from a revenue standpoint, but all revenues rebounded nicely in September," Chief Executive Claude Mongeau said on a conference call.
"More important than that, we were able - throughout the quarter - to continue to outpace base market conditions. That helps us deliver solid top line growth," he said.
Big efficiency gains helped as the railway handled more cars with the same amount of workers and staff, for example, and moved cars more quickly through railyards.
CN's closely watched operating ratio improved by 80 basis points to 59.8 percent in the quarter. The ratio measures productivity by tallying how much revenue is required to maintain operations - the lower the number, the better.