(The Canadian Press circulated the following story on April 22.)
MONTREAL — Canadian National Railway Co. — afflicted by a strike, the strong Canadian dollar and high fuel costs — has reported a 17 per cent decline in first-quarter profit to $210 million.
However, Canada’s biggest railway said its operating ratio — operating costs as a proportion of revenue — improved by 2.5 percentage points from a year earlier, to 72.5 per cent, and operating income rose six per cent to $395 million.
CN said today that its $210-million January-March net earnings were worth 73 cents per diluted share. This was down from $252 million, 85 cents per share, in the year-ago period.
Revenue declined four per cent to $1.44 billion from just under $1.5 billion.
“We overcame a series of stiff challenges — an unfortunate strike, the year-over-year appreciation of the Canadian dollar and persistently high energy prices — to grow freight volumes by five per cent and deliver significant improvements in our operating income and operating ratio,” stated Hunter Harrison, president and chief executive officer.
He said the Canadian Auto Workers strike cut first-quarter net income by $24 million and the appreciation of the Canadian dollar hit the bottom line by $20 million.
The revenue slippage was attributed to the strong dollar and lost intermodal revenue caused by the month-long CAW strike, partly offset by increased shipments of Canadian grain, forest products and mineral products.
“CN’s intermodal revenues have recovered since the strike and we anticipate continued strength in Canadian grain and forest products volumes during the balance of the year,” Harrison said.
“On the expense side, we are intent on maintaining a sharp focus on cost reduction and productivity improvement.”