CN Rail earnings on Track

CN Rail (CNR-T) has released third quarter earnings that are well above analyst expectations.

The company reported earnings of $497 million or 94 cents per share up substantially from the $411 million or 74 cents per share reported a year earlier. The main factor in the improvement can be attributed to a successful program of cost cutting. The company reported an improvement of 6% in the operating ratio bringing the ratio down to a record low of 57.4%. The operating efficiencies have been achieved with the introduction of new technology that has substantially reduced the amount of waiting time at switching yards and rail sidings.

CNR is forecasting a continuation of strong revenue growth and forecasts earnings for the full year 2006 of $3.40 per share with an expected 10% increase for 2007.

The rail industry is seeing a sustained increase in demand due in large part to the shipment of metals and other basic material to Asia. This trend is likely to be in place for some time and CNR is well positioned for growth with operations in both Canada and the US continuing to operate at peek efficiency.

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