CN's second-quarter earnings beat expectations
Canadian National saw its net income fall by more than 10 per cent in its fiscal second-quarter, citing a tough economy. But the rail giant still made more money than analysts expected.
CN earned $459 million, or 95 cents a share, for the three months ended June 30, down 11 per cent compared to the same 90-day period last year.
CN made $1.01 per diluted share in the second quarter of 2007.
The railroad released its earnings after the close of trading on North American stock exchanges on Monday.
Even though CN saw its overall net profit slip, the railroad still topped the 87 cents per share brokerage analysts had been predicting.
"I am pleased with our second-quarter results given the challenges we faced during the period," said company president and chief executive officer Hunter Harrison.
"Operations performed very well, and we saw revenue gains across most of our commodity groups."
Revenue for the period inched up four per cent to almost $2.1 billion for the second quarter of 2008 versus $2.02 billion last year.
Many North American rail carriers have suffered poorer results in the past year because of overall economic woes.
For its part, CN has been hurt by higher oil prices, a flagging economy and worse-than-expected flooding in the Midwestern United States.
The company, however, said it offset these higher costs by imposing a fuel surcharge to the rates it charged its customers. As well, CN moved more minerals and other commodities which generated higher revenue.
More ominously, CN noted that cash from forest products was off 14 per cent. Lumber shipments constitute approximately 20 per cent of CN's total freight volume.
CN's shares traded 52 cents lower on Monday, finishing the trading day at $50.97.
CN has a rail system of more than 20,000 route-miles in North America and has 22,000 employees.
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