Canadian National Railway Co. (CNI,CNR.TO) on Monday reported a decline in profit for the first quarter, as last year's bottom line were boosted by gains from sale of rail line segment. Excluding items, earnings for the quarter improved from a year ago, as revenues grew 5 percent. Earnings beat estimates by a penny, but revenues fell short of expectations.
The Canada's largest railroad operator reported first-quarter profit of C$555 million or C$1.30 per share from C$775 million or C$1.75 per share last year.
The first-quarter results included a gain of C$36 million compared to a gain of C$252 million last year, related to the sale of rail line segments in the Toronto area to a public transit agency.
Excluding special items, adjusted earnings for the quarter rose to C$1.22 per share from C$1.18 last year. On average, 26 analysts polled by Thomson Reuters expected earnings of C$1.21 per share for the quarter. Analysts' estimates typically exclude special items.
The company generated revenues of C$2.47 billion, up 5 percent from C$2.35 billion last year. Analysts expected revenues of C$2.49 billion for the quarter.
Revenue growth was driven mainly by freight rate increases and higher freight volumes, due in part to growth in the North American and Asian economies.
Carloads for the quarter increased by 2 percent, while revenue ton-miles, measuring the relative weight and distance of rail freight transported by the company, increased 3 percent from last year.
Rail freight revenue per revenue ton-mile, a measurement of yield defined as revenue earned on the movement of a ton of freight over one mile, increased 2 percent.
Commenting on the results, Chief Executive Claude Mongeau said, "CN faced a number of operational challenges in the first quarter, including extreme cold and heavy snow in Western Canada, which hampered operations, congested the network and constrained volume growth."
Operating expenses increased to C$1.69 billion from C$1.55 billion last year.
Going forward, the company maintaining its 2013 financial outlook. While reporting the fourth quarter, the company had predicted "high single-digit growth" in 2013 earnings per share.
CNI is currently trading at $95.05, down $0.91 or 0.95%, on the NYSE.
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