An increased handle and higher revenue from grain and fertilizers has helped Canadian National Railway (CN) boost its first-quarter profits.
Montreal-based CN on Monday posted net income of $511 million on $1.965 billion in revenue for its first quarter (Q1) ending March 31, up from $424 million on $1.859 billion in the year-earlier Q1.
The railway’s overall six per cent rise in Q1 revenues stemmed mainly from higher freight volumes in all commodity groups due to “improving economic conditions in North America and globally,” the company said.
CN also levied a number of freight rate increases and a higher fuel surcharge in Q1 due to to year-over-year increases in applicable fuel prices and higher volumes.
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Offsetting those line items were the effects of a stronger Canadian dollar on CN’s U.S.-dollar-denominated revenues, the company said.
CN handled 146,000 carloads of grain and fertilizer traffic in its Q1, up 11 per cent from the year-earlier period. By comparison, the railway handled 326,000 intermodal cars and 240,000 carloads of metals and minerals.
However, grain and fertilizer revenue for Q1 was the highest among CN’s seven major commodity groups at $372 million, up four per cent from the year-earlier period.
By comparison, revenues rose 48 per cent for CN’s automotive business, 28 per cent for coal, 10 per cent for intermodal traffic and six per cent for metals and minerals. Revenues were down six per cent for petroleum and chemicals and five per cent for forest products, CN said.
In terms of revenue per carload, grain and fertilizers were down six per cent in Q1 at $2,548 per carload, behind forest products at $2,796 and ahead of petroleum and chemicals at $2,396.
“If the economy continues on its recovery trend, increased traffic levels and solid execution should help CN produce strong financial results for its shareholders in 2010 and beyond,” CEO Claude Mongeau said in the railway’s Q1 release Monday.
