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Canadian National Railway Q4 Profit Tops View; Hikes Dividend - Update

Canadian National Railway Q4 Profit Tops View; Hikes Dividend - Update
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1/24/2012 10:26 AM ET

Canadian National Railway Co. (CNI: Quote, CNR.TO) on Tuesday reported an 18 percent increase in profit for the fourth quarter, reflecting higher freight volumes amid a modest improvement in the North American and global economies. Both earnings per share and revenue topped analysts' expectations.

Looking ahead, the company forecast higher earnings for fiscal year 2012 and raised its quarterly dividend by 15 percent.

Canada's largest railroad operator's fourth-quarter net income rose to C$592 million or C$1.32 per share from C$503 million or C$1.08 per share in the year-ago quarter.

Adjusted net income was C$581 million or C$1.30 per share, up from C$503 million or C$1.08 per share in the prior-year period. On average, thirteen analysts polled by Thomson Reuters expected the company to earn C$1.24 per share for the quarter. Analysts estimates typically exclude special items.

Revenues for the quarter rose 12 percent to C$2.38 billion from C$2.12 billion in the prior-year period and topped analysts' consensus estimate of C$2.31 billion.

Carloadings for the quarter grew by 4 percent to 1.23 million, while revenue ton miles increased 3 percent to 48.16 billion. Rail freight revenue per revenue ton-mile, defined as revenue earned on the movement of a ton of freight over one mile, increased 9 percent from last year.

Canadian National Railway or CN's operating ratio, a key performance metric for transportation organizations, improved 1.3 points to 64.7 percent during the quarter.

For fiscal year 2011, CN's net income rose to C$2.46 billion or C$5.41 per share from C$2.10 billion or C$4.48 per share last year.

Adjusted net income was C$2.19 billion or C$4.84 per share, up from C$1.97 billion or C$4.20 per share in the prior year. Analysts expected the company to earn C$4.78 per share for the year.

Revenues for the year increased 9 percent to C$9.03 billion from C$8.30 billion in the previous year. Analysts had a consensus estimate of C$8.95 billion.

Carloadings for the year grew 4 percent, while revenue ton-miles increased 5 percent. Rail freight revenue per revenue ton-mile increased by 4 percent.

Looking ahead to fiscal year 2012, CN projects earnings per share growth of up to 10 percent over adjusted earnings per share of C$4.84 for 2011, despite "significant headwinds" from additional pension expense of about C$120 million. Analysts expect the company to report earnings of C$5.37 per share for the year.

CN plans to invest about C$1.75 billion in capital programs in 2012, of which more than C$1 billion will be targeted on track infrastructure.

CN's board of directors has approved a 15 per cent increase in the company's quarterly cash dividend. The company will pay a quarterly dividend of C$0.375 per common share on March 30 to shareholders of record at the close of business on March 9.

In Tuesday's trading, CNI is trading at $77.67, down $1.23 or 1.56 percent on a volume of 201,142 shares.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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