CN’s fourth quarter revenue increased from $C 3.17 in 2015 to $C 3.22bn ($US 2.46bn) in 2016, while full year revenue fell from $C 12.6bn in 2015 to $C 12bn last year. Fourth quarter net income rose from $C 941m in 2015 to $C 1bn compared with an increase for the full year from $C 3.54bn in 2015 to $C 3.64bn in 2016. Diluted earnings per share (EPS) soared by 12% in the fourth quarter and by 6% for the full year.
CN managed to cut its operating costs by 8% in 2016 to $C 6.7bn and to improve its operating ratio by 2.3 points from 58.2% in 2015 to 55.9% in 2015.
Revenue tonne-km for last quarter grew from 90.96 billion in 2015 to 94.78 billion last year while for the full year tonne-km fell from 361.56 billion to 344.85 billion. CN says revenue growth in 2015 for automotive (up 6%), forest products (4%) and grain and fertilise (1%) were more than offset by a 29% drop in coal revenue, a 15% fall in metals and minerals, an 11% decline in petroleum and chemicals and a 2% fall in intermodal.
“Despite facing difficult winter conditions in December, CN delivered very strong fourth-quarter results and throughout 2016 demonstrated once again its ability to perform well in a mixed economic environment,” says Mr Luc Jobin, CN’s president and CEO.
“We saw weaker volumes during the year, but quickly adjusted as our dedicated team of railroaders maintained its focus on operational efficiency, while continuing to provide quality service to our customers and improve our safety performance.
“Overall, the economy remains challenging, but we remain optimistic and expect to see moderate volume growth in 2017.”
CN says its expects to deliver EPS growth in the mid-single-digit range in 2017 over adjusted diluted EPS of $C 4.59 in 2016. CN plans to invest approximately $C 2.5bn this year, which includes increased spending for Positive Train Control technology in the United States.