Canadian National Railway saw its fourth quarter operating income rise 18.5 percent from a year earlier to $774 million while revenue rose 12.5 percent to $2.1 billion.
Nominal net income fell 13.6 percent to $503 million, but CN said profit in the final 2009 period was affected by a one-time rail line sale and deferred income tax recovery. When adjusted for comparable net income, the 2010 quarter’s profit was up 18.6 percent from a year earlier.
For all of last year, CN earned $2.1 billion, up 13.5 percent, on a 12.6 percent rise in revenue to $8.3 billion. The company said higher freight rates and fuel surcharges contributed to the performance, along with stronger freight traffic as the economy rebounded.
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President and CEO Claude Mongeau said “CN's strong fourth-quarter performance capped an impressive year,” with solid railroad operating metrics “while handling a sharp rise in workload with improved reliability.” He said CN’s program of supply chain collaboration measures with industry groups is “clearly paying dividends.”
Mongeau looks for the North American economic recovery to proceed more slowly this year, and said CN expects headwinds from a stronger Canadian dollar.
Among business lines, he said “CN expects to take advantage of continued strong growth in overseas container traffic, metal products and iron ore in domestics markets, and wood pulp and lumber offshore.” Other growth opportunities include “share gains against truck in domestic intermodal,” he added.
CN increased its workforce 3.5 percent from the 2009 fourth quarter, for an average of 22,229 employees in the latest period. Freight volume grew much faster, up 10.5 percent across all cargoes. The carrier further shrank its already low operating ratio of expenses to revenue, to 63.4 percent in the final 2010 quarter from 65.3 percent a year earlier.
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