Canadian National Beats Profit Estimates After Cutting Costsby and
Canadian National Railway Co. reported second-quarter profit that topped analysts’ estimates as the carrier cut jobs and parked locomotives to blunt the effects of weakening freight demand.
Adjusted earnings fell to C$1.11 a share, the railroad said Monday in a statement. That beat the C$1.06 average of estimates compiled by Bloomberg. Revenue declined 9.1 percent to C$2.84 billion ($2.15 billion), compared with the C$2.9 billion average estimate.
Canada’s largest railroad and its peers are grappling with a yearlong decline of carloads, which rival Canadian Pacific Railway Ltd. said last week had hit a bottom during the second quarter. Canadian National lowered its annual profit target in April -- the first such reduction in eight years -- amid weaker-than-expected demand for coal, crude oil and other commodities.
The results are the last under Claude Mongeau, who quit as chief executive officer at the end of June for health reasons and was replaced by former Chief Financial Officer Luc Jobin. Canadian National also promoted two other senior executives last month, naming Ghislain Houle CFO and Mike Cory chief operating officer.
The second quarter probably will be this year’s most difficult for volume, Jobin said in the earnings statement Monday. The railroad reiterated that this year’s profit will be in line with last year’s C$4.44 a share.
Canadian National rose 0.5 percent to C$83.63 in Toronto on Monday. The stock has gained 8.1 percent this year.