MONTREAL — Canadian National Railway beat expectations as its net profit surged 18 per cent in the third quarter on higher revenues.
The country's largest railway reported Tuesday that it earned more than $1 billion in the three months ended Sept. 30, up from $853 million a year earlier. Its diluted earnings per share rose 21 per to $1.26 from $1.04.
Revenues grew three per cent to $3.22 billion despite a six per cent decrease in volume measured by carloadings and revenue ton-miles. It benefited from a lower Canadian dollar
Excluding currency fluctuations, net income would have decreased by $107 million or 13 cents per share.
CN (TSX:CNR) had been expected to earn $1.14 per share on $3.2 billion of revenue, according to analysts polled by Thomson Reuters.
The Montreal-based company said its operating ratio improved to a record 53.8 per cent from 58.8 per cent in the third quarter of 2014. Operating ratio is a measure of efficiency in which a lower number is better.
The railway reaffirmed its outlook for double-digit adjusted EPS growth in 2015 above the $3.76 per share earned in fiscal 2014.
"CN delivered record third-quarter results thanks to strong team execution in safely and efficiently meeting our customers' needs while recalibrating resources to the weaker volume environment," said Luc Jobin, CN executive vice-president and chief financial officer.
Revenues increased for automotive (13 per cent), forest products (12 per cent), intermodal (five per cent), petroleum and chemicals (three per cent) and grain and fertilizers (two per cent). Revenues declined for coal (13 per cent) and metals and minerals (three per cent).
Meanwhile, the company said chief executive Claude Mongeau had successful surgery to remove a rare type of soft-tissue tumour. The procedure also removed his larynx and a voice prosthesis was placed in his throat. He is receiving radiation treatment and is expected to return to work early next year.
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