CN Rail third-quarter earnings rise 19 percent

Tue Oct 25, 2011 5:00pm EDT
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(Reuters) - Canadian National Railway Co (CNR.TO: Quote) reported a 19 percent rise in third-quarter profit on Tuesday thanks to record carloadings and revenues, strong operational execution and cost controls.

CN, Canada's biggest railroad, said earnings rose to C$659 million ($646 million), or C$1.46 a diluted share, in the three months to the end of September.

That compared with earnings of C$556 million, or C$1.19 a share, a year ago.

The results included an after-tax gain of C$38 million, or 8 Canadian cents a share, on the sale of almost all of the assets of IC RailMarine Terminal Co.

Adjusted to exclude the sale, earnings came in at C$1.38 a share. Analysts, on average, had expected CN to earn C$1.31 a share.

Revenue increased 9 percent to C$2.3 billion, in line with analysts' expectations.

"The 4 percent rise in carloadings and 9 percent increase in revenues outpaced general economic activity during the quarter, reflecting CN's improved service and market positioning," Chief Executive Claude Mongeau said in a statement.

CN also announced a new share repurchase program, to be launched on October 28, to buy back up to 17 million common shares.

The company said its operating ratio - an important measure of a railroad's productivity - fell to 59.3 percent in the quarter, a 1.4-point improvement over the 60.7 percent ratio a year ago.   Continued...