(The Globe and Mail posted the following article by Darren Yourk on its website on July 22.)
TORONTO — Canadian National Railway Co.’s second-quarter profit dropped 12.8 per cent, it said Tuesday as a surging Canadian dollar, fuel costs and lower grain volumes hit its bottom line.
Montreal-based CN reported profit of $244-million or $1.26 a share, compared with $280-million or $1.39 a share for the same quarter of 2002.
Analysts were expecting the company to report EPS of $1.24, according to Thomson Financial/First Call.
CN’s operating income for the second quarter of 2003 declined 11 per cent to $437-million.
Revenue fell 6 per cent to $1.46-billion from $1.55-billion a year ago, while operating expenses dropped 3 per cent to $1-billion.
The stronger Canadian dollar reduced CN’s second-quarter 2003 revenues, operating income, and net income by about $90-million, $25-million, and $11-million (6 cents a share), respectively.
“The stronger Canadian dollar reduced second-quarter revenues by approximately $90-million,” Hunter Harrison, president and chief executive officer, said in a statement. “If you exclude this impact on our business, CN’s revenues would have increased slightly, and four of the company’s seven business units would have posted revenue gains.”