CN Rail profit rises despite challenging winter

Tue Apr 22, 2014 5:06pm EDT
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TORONTO (Reuters) - Canadian National Railway Co (CNR.TO: Quote), the country's biggest railroad, reported first-quarter earnings that topped expectations on Tuesday and reaffirmed its 2014 financial outlook, even as an extremely cold winter hampered operations.

Net earnings rose to C$623 million, or 75 Canadian cents per share, from C$555 million, or 65 Canadian cents per share, in the same period a year ago.

Revenue rose 9 percent to C$2.69 billion.

Adjusted earnings per share were 66 Canadian cents, compared with 61 Canadian cents in the year-ago quarter.

Analysts, on average, were expecting 62.5 Canadian cents a share and revenue of C$2.64 billion, according to Thomson Reuters I/B/E/S.

""It is the harshest winter at least I have been involved with and I have been at CN for 20 years," Chief Executive Claude Mongeau during a conference call. "It clearly impacted our ability to meet all of the customer demand that we had in front of us."

CN's results come after a record first quarter at rival Canadian Pacific Railway Ltd (CP.TO: Quote).

CN said its operating ratio for the quarter slipped to 69.6 percent from 68.4 percent a year ago. Operating ratio is the percentage of revenue needed to maintain operations and is a key measure of railroad efficiency. The lower the number the better.

(Reporting by Solarina Ho; Editing by Steve Orlofsky and Leslie Adler)