Canadian National Railway Co, the country’s largest rail operator, reported a big jump in profit on Monday and bolstered its 2014 financial outlook, reflecting a swift recovery from last quarter’s tough winter weather.
Montreal-based CN said net earnings for the quarter ended June 30 rose to C$847-million ($789.6-million), or C$1.03 per share, from C$717-million, or 84 Canadian cents per share, in the same period a year ago.
Excluding one-time gains, adjusted earnings per share were C$1.03, compared with 83 Canadian cents in the year-ago quarter.
Revenue grew 17 per cent to C$3.11-billion, as carload volumes grew 11 per cent. Analysts, on average, were expecting earnings of C$1.00 a share and revenue of C$3.10-billion, according to Thomson Reuters I/B/E/S.
CN said it now expects to deliver “solid double-digit EPS growth” in 2014 over 2013 earnings per share of C$3.06, versus an earlier forecast of “aiming for double-digit” growth. It also lifted its 2014 free cash flow forecast to a range of C$1.8-billion to C$2-billion, from a previous view of C$1.6-billion to C$1.7-billion. The railway’s closely watched operating ratio improved by 1.3 points in the quarter, to 59.6 per cent from 60.9 per cent a year ago. A key measure of railroad efficiency, operating ratio is the percentage of revenue needed to maintain operations. The lower the number, the greater the efficiency.
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