Canadian National's Quarterly Profit More Than Doubles -- Earnings Review

By Maria Armental Features Dow Jones Newswires

Canadian National Railway Co. (CNI, CNR.T), Canada's biggest railway operator, reported fourth-quarter results on Tuesday. Here's what you need to know:

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EARNINGS: Fourth-quarter profit more than doubled to 2.61 billion Canadian dollars, or C$3.48 a share, from C$1.02 billion, or C$1.32 a share. On an adjusted basis, profit fell to C$1.20 a share from C$1.23 a share a year earlier. Analysts surveyed by Thomson Reuters had projected adjusted profit of C$1.22 a share.

TAX LAW: The railway operator recorded a C$1.74 billion, or C$2.35 a share, one-time benefit from recent changes to U.S. tax law.

REVENUE: Total revenue rose to C$3.29 billion from C$3.22 billion a year earlier, beating analysts' C$3.27 billion projection. CN largely attributed the revenue increase to higher international container traffic through the ports of Prince Rupert and Vancouver and higher frac sand volumes along with freight rate increases and higher applicable fuel surcharge rates.

OPERATING EXPENSES: The company reported a 9% increase to C$1.98 billion, which CN attributed to higher costs from increased volumes, higher fuel prices and weather conditions. Operating ratio, however, improved to 60.4% from 56.6% a year earlier.

CARLOAD VOLUMES: The company reported a 7% increase, driven by a 20% increase in intermodal shipments, CN's largest revenue driver.

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OUTLOOK: Montreal-based railway operator projects adjusted per-share earnings of C$5.25 to C$5.40 this year, compared with the C$4.99 it reported in 2017 but shy of analysts' expectations of C$5.54. It also plans to spend a record C$3.2 billion in capital, including C$1.6 billion for track infrastructure maintenance and about C$400 million to continue installing so-called positive train control in the U.S., rail's version of air traffic control.

STOCK: Shares, up 14% over the past 12 months, were down 2.9% to $78 in after-hours trading.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

January 23, 2018 17:04 ET (22:04 GMT)