January 22, 2009 / 9:37 PM / 9 years ago

UPDATE 1-CN Rail earnings drop with freight volumes

VANCOUVER, British Columbia, Jan 22 (Reuters) - Canadian National Railway’s (CNR.TO) net earnings slipped 31 percent in the fourth quarter as freight volumes dropped because of the weak economy, the company said on Thursday.

But the railroad also said it was boosting its quarterly cash dividend by 10 percent to 25.25 Canadian cents a share.

CN reported a net profit of C$573 million, or C$1.21 per diluted share, in the three months to Dec. 31. That compared with a profit of C$833 million, or C$1.68 per share, in the same quarter of 2007.

The railway’s revenue in the quarter was C$2.2 billion, up 13 percent from a year ago, but the Montreal-headquartered company said that was largely the result of the impact of the weaker Canadian dollar.

Revenue ton-miles, a measurement of the relative weight and distance of the freight transported by the carrier was down 10 percent from 2007, Canadian National said.

The weaker Canadian dollar also contributed to a 15 percent increase in operating expenses, the carrier said.

This quarter’s results were boosted by a tax-related gain of C$42 million, or 9 Canadian cents a share. The year-before results had also been lifted by a tax gain and other one-time items. (Reporting Allan Dowd, editing by Rob Wilson)

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