Traffic in Prairie grain and U.S. soybeans got credit Tuesday for helping Canadian National Railway (CN) to a record profit for its fourth fiscal quarter.
Montreal-based CN booked net income of $1.018 billion on revenue of $3.217 billion for the quarter ending Dec. 31, up from $941 million on $3.166 billion in the year-earlier period.
The Q4 results lifted CN’s year-end net income to $3.64 billion on $12.037 billion in revenues, up from $3.538 billion on $12.611 billion in fiscal 2015, despite a five per cent dip in carloadings.
CN said Tuesday its fourth-quarter revenue increase was “mainly attributable to higher volumes of Canadian grains and U.S. soybeans” plus refined petroleum products, finished vehicles and petroleum coke.
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Those volumes, plus increases in its freight rates, were “partly offset” by lower volumes of crude oil, U.S. thermal coal and drilling pipe and a drop in applicable fuel surcharge rates.
Revenue from CN’s grain and fertilizer segment also rose for the full year, but its 12-month overall revenue slipped five per cent on lower volumes of crude oil, coal and frac sand and lower applicable fuel surcharge rates.
In its grain and fertilizers segment for the fourth quarter, CN reported moving about 177,000 carloads, up nine per cent, earning revenue of $647 million, up 14 per cent, and rail freight revenue per carload of $3,655, up five per cent.
Over the full year, CN moved about 602,000 carloads of grain and fertilizers, down one per cent, for revenue of $2.098 billion, up one per cent, and revenue per carload of $3,485, up two per cent.
The company also booked an improved operating ratio (OR) of 56.6 per cent for Q4 and 55.9 per cent for the full year, up 0.6 and 2.3 points respectively. The OR, a ratio of operating expenses to net sales, is cited within business sectors as a measure of a specific company’s relative efficiency in that sector.
“Despite facing difficult winter conditions in December, CN delivered very strong fourth-quarter results and throughout 2016 demonstrated once again its ability to perform well in a mixed economic environment,” CEO Luc Jobin said in Tuesday’s release.
“Overall, the economy remains challenging, but we remain optimistic and expect to see moderate volume growth in 2017.”
Grain crops in both Canada and the U.S. came in above their respective five-year averages in the 2016-17 crop year, CN noted, and assumes in its outlook that the 2017-18 grain crops in both countries will be in line with the five-year averages. — AGCanada.com Network
