CN Rail's revenue rises 8 pct on higher freight volumes
By Allison Lampert
MONTREAL (Reuters) - Canadian National Railway Co (CNR.TO: Quote) on Monday reported an 8 percent increase in quarterly revenue as the railroad moved record volumes, boosted by grain, frac sand and coal.
Canada's largest railroad also approved a quarterly dividend and said total carloads rose 9 percent in the first quarter ended March 31, although rail freight revenue per carload decreased by 1 percent.
CN said it expects to earn more on a per-share basis this year and sees an approximate 10 percent growth in 2017 revenue ton-mile (RTM), which measures the relative weight and distance of freight transported by a railroad.
The Montreal-based railroad now expects 2017 adjusted earnings of C$4.95-C$5.10 per share, up from last year's earnings of C$4.59 per share.
CN, like its rivals, is seeing improved economic conditions in 2017, following a weakness in commodities last year. Positive growth drivers during the first quarter included frac sand, U.S. terminal coal, grain and potash, CN's chief marketing officer, Jean-Jacques Ruest, told analysts.
Chief Financial Officer Ghislain Houle said he expects a strong second quarter, "while the rest of the year, in particularly the fourth quarter, will face more difficult (comparables)."
Higher fuel prices helped drive up CN's operating expenses 11 percent, on a constant currency basis, and the railroad's operating ratio rose to 59.4 percent, up 0.5 of a percentage point compared with a year earlier.
The lower the operating ratio, a key industry metric which measures operating costs as a percentage of revenue, the more efficient the railroad. Continued...