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Lumber to push railway’s growth
Canadian National Railway expects to outpace a ''sluggish'' but modestly improving North American economy this year through a resurgence in lumber exports to meet growing U.S. housing starts and gains from the growing transportation of crude.
January 23, 2013 By The Canadian Press
The country’s largest railway is boosting its dividend by 15 per cent after ending 2012 on a strong note with a higher fourth-quarter profit, record-high revenues and the prospect for even better results in 2013.
”We are determined to outpace base economic conditions by leveraging our franchise diversity, our pipeline of strategic initiatives and our continuously improving service levels to drive our topline growth above economic conditions,” president and CEO Claude Mongeau said Tuesday during a conference call.
CN earned $610 million or $1.41 per diluted share for the period ended Dec. 31, in line with analyst estimates.
That compared to $1.32 per share or $592 million a year earlier. Excluding an income tax recovery last year, adjusted profits were $581 million and $1.30 per share.
Revenues grew by 6.6 per cent to a record $2.53 billion, from $2.38 billion a year ago.
For the full year, CN earned $2.68 billion, or $6.12 per share, compared to $2.46 billion or $5.41 per share in 2011. Revenues grew to $9.92 billion, up from $9.03 billion a year earlier.
Adjusting for one time items, the full year profit increased 16 per cent to $5.61 per share or $2.46 billion, up from $4.84 per share or $2.2 billion in the prior year.
Analysts polled by Thomson Reuters expected adjusted earnings per share of $5.60 on revenue of $9.93 billion.
The Montreal-based North American railway (TSX:CNR) said its strong results and positive outlook support a higher quarterly cash dividend of 43 cents per common share.
Mongeau said the railroad capped a strong year by delivering ”impressive” results from transporting the second highest quarterly volumes and largest full-year volumes in its history.
Crude oil was a new area of business in which CN outpaced the market and which presents a ”huge opportunity” because of Canada’s position as an ”energy powerhouse.”
”We have gas, we have oil and if we play our cards right and develop the proper transportation solutions – pipe and rail,” he told analysts.
”Open up export markets, open up supply chains that provide good netbacks – there’s a huge potential for transportation and infrastructure companies to help this booming oil and energy market for many, many years to come.”
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