MONTREAL – Canadian National Railway (TSX:CNR) says its net profit climbed 6.1 per cent to $705 million in the third quarter as Canada’s largest railway easily beat expectations on both earnings and revenue.
The earnings by Montreal-based CN translated into $1.67 per share for the period ended Sept. 30, up from $1.52 per share, or $664 million, in the same prior-year period.
Excluding one-time changes for deferred taxes, CN’s adjusted profits grew 13 per cent to $1.72 per share or $724 million.
Revenues reached a quarterly record of nearly $2.7 billion, up from $2.5 billion in the prior year. The increase was driven by a four per cent increase in revenue ton-miles and a three per cent increase in carloadings
CN was expected to report $2.64 billion of revenue and $1.62 per share in adjusted profits, according to analyst estimates.
The railway’s operating ratio improved 0.8 percentage point to 59.8 per cent.
“CN’s agenda of operational and service excellence delivered outstanding financial results for the quarter,” president and CEO Claude Mongeau said in a news release.
“All our key operating metrics improved, service levels remained solid and we reached new levels of safety in our train operations.”
CN said it expects the railway’s business will outpace the overall economy allowing the railway to meet its full-year 2013 financial outlook.
The results were released after markets closed on Tuesday as crews continued to deal with a weekend derailment of a CN train near Gainford, Alta., as a tanker car with thousands of litres of propane continued to burn for a fourth day, despite efforts to douse it with water.
It was the third notable CN derailment since September and followed high-profile accidents during the summer at lines operated by Canadian Pacific (TSX:CP) and Montreal, Maine & Atlantic Railway.
The companies have defended their overall safety records but CN executives were likely to face more questions during a conference call to discuss its results.
On the Toronto Stock Exchange, CN shares closed down 15 cents at $109.75 on Tuesday.