MONTREAL — Historic Canadian National Railway Co. will for the first time get more revenues from operations in the United States than Canada this year, its chief executive said today.
The Candian Press reports that out of total revenues, which were $5.6 billion last year, 26 per cent will come from operations within U.S. borders, Paul Tellier said during a presentation to investors and analysts.
This compares with 24 per cent within Canada, the birthplace of the sea-to-sea railway.
Transborder traffic, in either direction, is the biggest segment, accounting for 32 per cent of revenues. Offshore freight through seaports accounts for 18 per cent.
CN has extended its reach in the United States during the past three years through the acquisition of Illinois Central, which runs between Chicago and New Orleans, and Midwest-based Wisconsin Central.
Tellier has long argued that Montreal-based CN is no longer a Canadian railway: “We’re a North American railway,” he said Monday.
CN’s continental reach “gives us a big advantage over our competitors,” he said.
Tellier confirmed his earlier guidance that earnings per share will grow by about five per cent this year, despite an expected revenue drop of $200 million in grain shipments as a result of the drought on the Canadian Prairies.
“We would have had an outstanding year if it wasn’t for grain.” He added that in the grain transport sector “the beating we’re taking this year will continue into next” as a result of 2002 grain shipments not continuing into 2003 as they normally would.
Tellier said Canadian Wheat Board officials have told him exports of Canadian wheat and barley will be less than eight million tonnes this year. The average for the preceding five years was 18 million.
Tellier said the railway expects to increase earnings per share next year, although he said it is difficult to predict by how much because of the uncertainty of fuel prices, the economy and grain crops.
He added that CN will seek more acquisitions because it can control its traffic better on its own network than on shared or borrowed track.
“At the right price and the right time, we want to expand.”
CN was selected by the Ontario government last month to negotiate a bid for the regional Northland Railway.