DROUGHT WITHERS CNÆS EARNINGS GROWTH
Canadian National on Wednesday reported improved net income for the third quarter and nine-month period ending Sept. 30, despite drought conditions causing a double-digit drop in the railroad's grain volumes.
CN's third-quarter net income of Can$268 million ($170.9 million) marked a 6.3 percent increase over the third quarter of 2001. Operating income increased 13 percent to Can$484 million ($308.6 million).
Revenues also improved 13 percent to Can$1.50 billion ($958.3 million), while operating expenses jumped 13.9 percent to Can$1.02 billion ($649.7 million). CN attributed the higher operating expenses to consolidating the expenses of Wisconsin Central, which CN acquired, as well as higher expenses for labor and fringe benefits and equipment rents.
Operating ratio slipped to 67.8 percent, from 67.5 percent.
The acquisition of WC boosted CN's revenues in petroleum, chemicals and forest products, the railroad said.
'Solid gains in our service-sensitive businesses — automotive, petroleum and chemicals, intermodal and forest products — and the consolidation of Wisconsin Central revenues more than offset depressed bulk commodity revenues,' said Paul M. Tellier, CN president and chief executive officer.
Grain and fertilizer revenues fell 15 percent to Can$217 million ($138.4 million). CN's other six business units registered revenue gains: forest products increased 30 percent to Can$337 million ($214.9 million); petroleum and chemicals up 22 percent to Can$275 million ($175.3 million); automotive up 20 percent to Can$130 million ($174.1 million); metals and minerals, 17 percent Can$138 million ($88.0 million); intermodal Can$273 million ($174.1 million); and coal, 6 percent Can$85 million ($54.2 million).
Carloadings for the third quarter rose 14 percent to 1.04 million.
For the first nine months of 2002, net income increased 4.6 percent to Can$778 million ($496.0 million), from Can$744 million. Operating income was Can$1.38 billion ($879.9 million), compared to Can$1.26 billion for the year-earlier period. Revenues increased 11 percent to Can$4.56 billion ($2.91 billion), while operating expenses rose 7.8 percent to Can$3.18 billion ($2.03 billion).