(Adds CEO comment from conference call)
By Allison Lampert
MONTREAL April 24 Canadian National Railway Co
on Monday reported an 8 percent increase in quarterly
revenue as the railroad moved record volumes, boosted by grain,
frac sand and coal.
Canada's largest railroad also approved a quarterly dividend
and said total carloads rose 9 percent in the first quarter
ended March 31, although rail freight revenue per carload
decreased by 1 percent.
CN said it expects to earn more on a per-share basis this
year and sees an approximate 10 percent growth in 2017 revenue
ton-mile (RTM), which measures the relative weight and distance
of freight transported by a railroad.
The Montreal-based railroad now expects 2017 adjusted
earnings of C$4.95-C$5.10 per share, up from last year's
earnings of C$4.59 per share.
CN, like its rivals, is seeing improved economic conditions
in 2017, following a weakness in commodities last year. Positive
growth drivers during the first quarter included frac sand, U.S.
terminal coal, grain and potash, CN's chief marketing officer,
Jean-Jacques Ruest, told analysts.
Chief Financial Officer Ghislain Houle said he expects a
strong second quarter, "while the rest of the year, in
particularly the fourth quarter, will face more difficult
Higher fuel prices helped drive up CN's operating expenses
11 percent, on a constant currency basis, and the railroad's
operating ratio rose to 59.4 percent, up 0.5 of a percentage
point compared with a year earlier.
The lower the operating ratio, a key industry metric which
measures operating costs as a percentage of revenue, the more
efficient the railroad.
CN Chief Executive Officer Luc Jobin said the company will
not try to win new customers at the expense of its lean cost
"We want to be positioned for continued growth. At the same
time, we don't want to go too far out into investments," he
CN also increased its 2017 capital investment forecast by
C$100 million to C$2.6 billion ($1.93 billion), the company
The railroad said net income rose to C$884 million or C$1.16
per share in the first quarter, from C$792 million or C$1 per
share, a year earlier.
CN's board approved a second-quarter 2017 dividend of 41-1/4
cents (C$0.4125) per common share that will be paid on June 30,
2017, to shareholders of record at the close of business on June
Excluding onetime items, CN earned C$1.15 per share, in line
with analysts' average estimate, according to Thomson Reuters
Revenue rose to C$3.21 billion from C$2.96 billion.
($1 = 1.3504 Canadian dollars)
(Reporting by Allison Lampert in Montreal. Additional reporting
by John Benny in Bengaluru; Editing by Sai Sachin Ravikumar)