CN revenues up despite tough first quarter

Canadian National Railway reported revenues of more than $3.5 billion in the first quarter of 2019, up $350 million from the same period in 2018.

In an April 29 news release, the company said higher revenues were mainly attributable to a weaker Canadian dollar, higher freight rates and increased volumes of petroleum crude, refined petroleum products, coal and Canadian grain.

Operating expenses for the first quarter grew by 14 percent to nearly $2.5 billion due to increased labour costs and challenging winter conditions, among other factors.

“Despite a prolonged period of historic cold temperatures in key segments of our network, CN railroaders delivered record first-quarter carload volumes, adding $350 million of top-line growth, while improving year-over-year car velocity,” said CN president JJ Ruest.

“We remain on track to deliver on our 2019 financial outlook and on our ability to bring long-term value creation to our customers and shareholders.”

Ruest and chief operating officer Mike Cory told investors that extremely cold winter conditions affected CN’s operations across the Canadian network.

Frigid winter temperatures forced crews to reduce train lengths and deploy additional locomotives to maintain adequate air pressure for braking systems.

In some instances, train operations were shut down completely for several hours at night until temperatures moderated slightly.

In Western Canada, train velocities and network fluidity began to recover in early March.

CN said first quarter 2019 freight revenues rose in every major business segment compared to the same period in 2018.

Freight revenues from grain and fertilizer movements grew seven percent to $577 million.

Revenues from petroleum and chemicals grew 30 percent to $735 million. Coal revenues were up 15 percent.

Contact brian.cross@producer.com

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