A markedly larger grain and fertilizer handle in the three months ending Sept. 30 has helped pump up the third-quarter bottom line for Canadian National Railway (CN).
Montreal-based CN on Tuesday reported third-quarter net income of $853 million on $3.118 billion in total revenue, up from $705 million on $2.698 billion in the year-earlier period. Year-to-date net income sits at $2.323 billion on $8.927 billion in revenues.
“Solid execution by our team of railroaders enabled us to accommodate the significantly higher freight volume generated by a record Canadian grain crop,” CN CEO Claude Mongeau said in a release, noting also “strong energy markets” and new business in the railway’s intermodal and automotive sectors.
CN said Tuesday it maintains the 2014 financial outlook it issued in July, calling for free cash flow in the $1.8 billion to $2 billion range. Its assumptions include Canadian and U.S. 2014-15 grain crops both in line with the five-year average.
“With these assumptions, CN assumes mid- to high single-digit carload growth along with continued pricing improvement above inflation,” the company said.
The Q3 ledger, he said, underscores CN’s “commitment to investing ahead of the curve in resources and rail infrastructure.”
Costs for labour and benefits in Q3 rose to $580 million, up from $521 million, while fuel costs for the quarter rose to $446 million, up from $390 million.
In its grain and fertilizer sector, CN moved about 153,000 carloads during the quarter, up 21 per cent from the year-earlier Q3. Year-to-date grain and fertilizer traffic sits at about 465,000 cars, up 16 per cent.
CN’s revenue from grain and fertilizer handling, meanwhile, rose 29 per cent to $469 million, for revenue per carload of $3,065, up six per cent. The company’s overall revenue per carload for the quarter across all sectors was $1,980, up five per cent. — AGCanada.com Network