OTTAWA -- Canadian National Railway Co. paid little heed to the
recession in the fourth quarter, posting a 25% increase in profit,
the National Post reports.
While the railway's earnings were
inflated by the acquisition of the Wisconsin Central Transportation
Corp., it also managed to control costs while finding 10% more
revenue.
In the quarter, CN reported net income of
$296-million ($1.48 a share), compared with $237-million ($1.20) a
year earlier. Revenue rose to $1.54-billion from
$1.39-billion.
Of that, the acquisition of WC, effective on
Oct. 9, contributed net income of $17-million (8¢) and $129-million
of additional revenue.
"The more we look at this company the
synergies are very promising," Paul Tellier, president and chief
executive, said during a media conference call.
In the
quarter, six of the company's seven business units gained revenue.
They were led by metals and minerals, up 38%; intermodal fell 1%.
Mr. Tellier boasted about the railway's cost-cutting efforts, made
all the more challenging because CN's original business plan was
predicated on 3% economic growth and it had to quickly adjust for
only 1% growth.
The company's operating ratio, a measure of
efficiency based on the percentage of revenue needed to run the
railway, improved by 2.2 points in the quarter to an industry
leading 66.1%.
Asked if the success of the WC acquisition had
whet his appetite for more, Mr. Tellier said CN continually reviews
its strategic options, including acquisitions.
"We have the
responsibility to not only grow earnings per share on a quarterly
basis but look also at the broader picture," he said. "If there is
something available which would be a win-win situation we would be
looking at it. We, on an ongoing basis, are reviewing a menu of
strategic options."
For the year, CN had income of
$978-million on an adjusted basis excluding a total of $62-million
in special items, including the sale of its Detroit River Tunnel
interest, deferred income tax recovery and a charge for workforce
reductions and writedown of its investment in 360networks Inc.
That's up from $879-million a year earlier. Excluding one-time
items, CN had income of $1.04-billion ($5.23), up from $937-million
($4.67) in 2000. Revenue was $5.65-billion, up from $5.43-billion.