Canadian National’s (CN) revenues increased by 2% to C$3,285m in Q4. Revenues increased for metals and minerals (20%), intermodal (13%), coal (7%) and automotive (1%). Revenues declined for grain and fertilizers (10%), petroleum and chemicals (5%), forest products (2%) and other revenues (1%). The increase in revenues was mainly attributable to higher international container traffic via the ports of Prince Rupert and Vancouver, and increased volumes of frac sand, freight rate increases, and higher applicable fuel surcharge rates. These factors were partly offset by the negative translation impact of a stronger Canadian dollar, lower export volumes of U.S. soybeans and reduced shipments of crude oil.
Net income increased by 156% to C$2,611m for the quarter, and diluted earnings per share (EPS) increased by 164 per cent to C$3.48. Included in net income was a deferred income tax recovery of C$1,764m resulting from the enactment of a lower U.S. federal corporate income tax rate.
Q4 adjusted net income decreased by 6% to C$897m, and adjusted diluted EPS decreased by 2% to C$1.20 and operating income decreased by 7% to C$1,301m.
For the full year 2017, revenues increased by 8% to C$13,041m. Revenues increased for metals and minerals (25%), coal (23%), intermodal (12%), automotive (9%), grain and fertilizers (6%), other revenues (5%), and petroleum and chemicals (2%). Revenues declined for forest products (1%). The increase in revenues was mainly attributable to higher volumes of traffic in overseas intermodal, frac sand, coal and petroleum coke exports, and Canadian grain; freight rate increases; and higher applicable fuel surcharge rates; partly offset by the negative translation impact of a stronger Canadian dollar.
Net income increased by 51% to C$5,484m, and diluted EPS increased by 55% to C$7.24. Included in net income was a deferred income tax recovery of C$1,764m resulting from the enactment of a lower U.S. federal corporate income tax rate.
Adjusted net income for the full year increased by 6% to C$3,778m, and adjusted diluted EPS increased by 9% to C$4.99 and operating income increased by 5% to C$5,558m.
Luc Jobin, CN president and chief executive officer, commented: “Our growth continues to outpace the strengthening economy, and I am pleased with the results our dedicated team generated in 2017. Throughout the year we faced rapidly changing market demands and in the fourth quarter dealt with challenging operating conditions, including harsh early winter weather across the network, impacting our performance.”
Jobin added: “We remain focused on operational efficiency and providing quality service to our customers. In 2018 we are adding new train crews and increasing our capital program to a record C$3.2bn as we invest in locomotives and build additional capacity for resiliency.”
CN will continue to invest in the safety and efficiency of its network with a capital program in 2018 of C$3.2bn. The program is highlighted by approximately $700m for investments to increase capacity, including the acquisition of 60 new locomotives, track infrastructure expansion, and improvements at intermodal terminals. The capital program also includes approximately C$1.6bn for track infrastructure maintenance supporting safety and efficiency, and approximately C$400m for continued installation of Positive Train Control in the United States.
Source: CN
