Canadian National Railway Co. on Monday reported a better-than-expected profit in its 2nd quarter and redeclared its full-year earnings outlook, despite an economic slowdown in Canada.
The Montreal railroad operator earned 886 million Canadian dollars (US$682 million), or C$1.10 a share, up from C$847 million, or C$1.03, a year earlier. Adjusted earnings came in at C$1.15 a share, handily beating analyst expectations for earnings of C$1.05 a share.
Revenue was C$3.13 billion, coming in slightly ahead of year-earlier levels and analyst expectations.
Weak volumes and emollient economic conditions in Canada had been expected to weigh on the results of CN and its chief Canadian rival, Canadian Pacific Railway Ltd., which is set to report its latest quarterly results Tuesday.
CN credited its operations and efficiency efforts for the better-than-expected results.
Revenue in the automotive sector grew the most in the period, at 17%, CN said, while revenue from forest products and petroleum and chemicals rose 8% and 4%, respectively. Revenue from the transport of metals and grains fell, while coal revenue dropped of 26%.
CN’s operating ratio—a measure of railway performance—improved to 56.4% from 59.6% a year earlier. The ratio indicates the percentage of operating revenue consumed by operating costs, so a decrease points to an improvement.
CN reaffirmed its guidance for double-digit earnings per share growth in 2015 versus last year’s adjusted diluted earnings per share of C$3.76.
Source : WSJ