John D. Boyd, Associate Editor | Oct 25, 2011 5:13PM EDT
Canadian National Railway’s profit rose 19 percent to $648 million in the third quarter from a year ago, as freight volume rose 4 percent to a record high.
The largest railroad in Canada and owner of large track segments in the U.S. saw revenue increase 9 percent to $2.27 billion. Its net income rose to 28.6 percent of receipts, from a profit margin of 26.2 percent in the 2010 quarter.
CN posted traffic gains in all main cargo categories except coal, which was down 9 percent. Intermodal shipments rose 7 percent and automotive 8 percent.
The railway posted higher revenue from every group, and average revenue per unit rose 5 percent. Per-shipment receipts increased 14 percent for metals and minerals, 11 percent for coal, 5 percent on intermodal loads and 1 percent on autos.
President and CEO Claude Mongeau said that “despite growing concerns about the economy,” he is “confident about our ability to finish the year on a positive note” in financial results.
Although some other top-tier railroads are seeing flat to mild gains in intermodal traffic, CN’s increased partly as rival Canadian Pacific Railway lost some time-sensitive box customers this year as it fought severe weather disruptions.
CN said its higher freight volume generally came from “modest improvements in North American and global economic conditions” and CN’s own above-market performance in some areas. The railway’s revenue growth was aided by freight rate hikes and higher fuel surcharges, but CN said those factors were partly offset by the negative effects on earnings of a stronger Canadian dollar translated to U.S.-dollar-denominated business.
CN also sold the IC RailMarine Terminal Company at Convent, La., during the quarter for $74 million, which pushed up net income. Even without that sale, though, CN said profit would have been 12 percent higher than a year ago.
At the end of September, CN had 23,353 workers on its payroll, up 5.4 percent from that point in 2010.
-- Contact John D. Boyd at jboyd@joc.com. Follow him on Twitter www.twitter.com/jboydjoc
