MONTREAL — Canadian National Railway Co. nearly doubled earnings and revenues in its second quarter as the company began to recover from the COVID-19 pandemic.
The Montreal-based railway earned $1.03 billion or $1.46 per share, up from $545 million or $0.77 per share in the first quarter of 2021. Excluding one-time items, adjusted profits were $1.06 billion or $1.49 per share, compared with $988 million or $1.28 per share in the first quarter.
Revenue for the three months ended June 30 was $3.60 billion, up from $3.21 billion the previous quarter.
The company also declared a dividend for its third quarter, of 61.5 cents per share to be paid in September.
In 2020, CN was forced to build longer and heavier trains due to the sharp retreat in rail volumes and customer demand during the COVID-19 pandemic. The company said Tuesday that as the economy rebounds, it has been able to revert to its standard operating plan and improve train speeds.
At the end of June, CN lost a critical bridge on its route to Vancouver due to wildfire in the area of Lytton, B.C. The railway was able to restore service last week after a two-week outage, but chief operating officer Rob Reilly said Tuesday it will be a few weeks more before CN fully recovers from the resulting backlog in traffic.
"That's a segment of railroad that averages about 25 trains a day," Reilly told analysts in a conference call. "We've opened it up, but I would also say it's a very active situation in British Columbia with the fires. So there are stops and starts out there."
The financial results come as the railway is awaiting a ruling from the U.S. Surface Transportation Board on its application for a voting trust for Kansas City Southern while its $33.6-billion takeover bid is analyzed by the regulator.
CN could be on the hook to pay the U.S. railway a US$1 billion penalty if the voting trust isn't approved. That's in addition to US$700 million it has agreed to pay KCS after it backed away from an agreement to be purchased by Calgary-based Canadian Pacific Railway Ltd.
This report by The Canadian Press was first published July 20, 2021.
Companies in this story: (TSX:CNR, TSX:CP)
The Canadian Press