UPDATE 1-CN Rail profit stung as winter chill adds to costs
By Solarina Ho
TORONTO Jan 30 (Reuters) - Canadian National Railway Co , the country's largest rail operator, reported higher quarterly results on Thursday and said full-year volumes and revenue hit a record, but results were tempered by extreme winter weather in December and came in slightly below estimates.
CN Rail, which cautioned the weather challenges continued into January, raised its quarterly dividend by 16 percent.
"The extreme cold weather brought us higher labor and higher purchased services and material cost in December, which at this point I would probably estimate to be approximately CAD15 million," said Chief Financial Officer Luc Jobin.
"Unfortunately, this little twist of Mother Nature is also extending itself well into January and consequently we are having a similar monthly cost pressure to contend with starting in 2014."
The Montreal-based railway reaffirmed its 2014 outlook first issued last month, when it said it was targeting double-digit growth in earnings per share in 2014 from the C$3.06 adjusted diluted earnings per share in 2013.
The company's operating ratio, a key measure of efficiency, rose 1.2 points to 64.8 percent during the quarter. The lower the operating ratio number, the better.
While CN still reported industry-leading efficiency, the company said it faced "significant headwinds" on issues including pensions. Continued...