More grain revenue on less grain in CN’s Q3 ledger

Lower grain traffic compared to last year’s record crop year hasn’t translated to lower third-quarter grain revenue for Canadian National Railway (CN).

Montreal-based CN on Tuesday booked overall net income of $1.007 billion on $3.222 billion in gross revenue for its third quarter (Q3) ending Sept. 30, up from $853 million on $3.118 billion in the year-earlier period, while total Q3 carloads slipped to 1.393 million from 1.475 million.

The company said its overall revenue performance was due mainly to the “positive translation impact” of a weaker Canadian dollar on U.S. dollar revenues; freight rate increases; strong overseas intermodal demand; higher volumes of finished vehicle traffic; and more shipments of lumber and panels to U.S. markets.

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Partly offsetting those gains were a lower applicable fuel surcharge rate; lower shipments of coal, “energy-related” commodities, semi-finished steel products and short-haul iron ore; and “lower volumes of Canadian grain versus the prior year’s record crop.”

Specifically, the company moved 143,000 carloads of grain and fertilizers in Q3, down from 153,000 in the year-earlier period, while posting grain and fertilizer revenue of $479 million, up two per cent, for revenue per carload of $3,350, up nine per cent from $3,065 in last year’s Q3.

CN said it also booked lower Q3 operating expenses, down five per cent to $1.735 billion, due mainly to lower fuel costs and lower casualty and other expenses but partly offset by Canada/U.S. currency exchange rates.

“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,” chief financial officer Luc Jobin said in a release.

CN also noted Tuesday its CEO, Claude Mongeau, had “successful surgery in Montreal to remove a rare type of soft-tissue tumour.”

Mongeau is now receiving radiation treatment after his larynx was surgically removed and a voice prosthesis was placed in his throat, the company said. The CEO is “expected to return to work early in the new year following his complete recovery.” — Network

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