CN Rail profit jumps 27 percent on higher freight volumes

(Reuters) – Canadian National Railway (CNR.TO) (CNI.N) reported a 27 percent jump in quarterly profit on Tuesday as the railroad moved higher volumes of commodities including grains and fertilizers.

FILE PHOTO: A Canadian National (CN) rail caboose is displayed outside a logistics company’s office in Sherwood Park, near Edmonton, Alberta, Canada November 13, 2016. REUTERS/Chris Helgren/File Photo

Total carloads, the amount of freight loaded into cars during a specified period, rose 5.8 percent, while rail freight revenue per carload increased 3.9 percent, the company said in a statement.

CN Rail and smaller rival Canadian Pacific Railway (CP.TO) have been investing in infrastructure to ease capacity constraints following a surge in demand for rail transport from producers of grains and other commodities.

Even oil producers are increasingly using railroads as production has exceeded pipeline capacity.

CN Rail said operating ratio, which measures operating costs as a percentage of revenue, increased to 58.2 percent from 57.5 percent a year earlier.

The company, which named Jean-Jacques Ruest chief executive officer earlier on Tuesday, said net income rose to C$1.31 billion ($995.82 million), or C$1.77 per share, in the second quarter ended June 30 from C$1.03 billion, or C$1.36 per share, a year earlier.

The Montreal-based company said revenue rose to C$3.63 billion from C$3.33 billion.

Rival CP Rail beat profit estimates last week, helped by higher shipments of commodities like grains and potash.

($1 = 1.3155 Canadian dollars)

Reporting by Anirban Paul in Bengaluru; Editing by Anil D’Silva



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