BUSINESS

Canadian National Railway reports profits of $886 million in second quarter

07/20/2015 04:47 EDT | Updated 07/20/2016 05:59 EDT
MONTREAL - Canadian National Railway has reported profits of $886 million in the second quarter, an increase of 4.6 per cent compared to the same period last year.

The Montreal-based company saw those profits despite flat revenue of $3.125 billion, a three per cent decrease in car loadings and a seven per cent decline in revenue ton-miles. Revenue ton-miles measure the amount of freight shipped.

The company said weakness in coal, grain and crude markets are impacting volumes, but prospects are looking better in international markets and non-energy related freight.

Company CEO Claude Mongeau credited the company's drive to efficiency for achieving the second-quarter results.

"I'm proud of our very solid second-quarter results, driven by the team's swift action to recalibrate resources and double-down on efficiency," Mongeau said in a statement.

He said CN has been reducing the number of railcars in use and cutting staffing costs.

The company said it laid off 600 employees, instituted a hiring freeze and is working to reduce overtime.

Despite a challenging economic environment, Mongeau reaffirmed the company outlook for double-digit adjusted earnings per share growth this year.

The company recorded a $42 million deferred income tax expense related to a higher provincial corporate income tax rate.

Excluding the tax expense, second quarter earnings per share increased 12 per cent to $1.15 compared to $1.03 in the same quarter last year.