CN Rail boosts dividend after capping an improved 2016 in the fourth quarter
MONTREAL — Canadian National Railway raised its dividend by 10 per cent after reporting a better-than-expected profit for its fourth quarter.
The railway said Tuesday it will now pay a quarterly dividend of 41.25 per cents common share, up from 37.5 cents per share.
The increased payment to shareholders came as CN reported a profit of $1.02 billion or $1.32 per share in its fourth quarter on sales of $3.22 billion.
That compared with a profit of $941 million or $1.18 per share on $3.17 billion in sales a year ago.
Adjusted profits were $1.23 per share, two cents above forecasts by analysts polled by Thomson Reuters.
“These results continue to show how CN is adapting to changing market conditions, seizing opportunities for date while positioning for the future,” chief executive Luc Jobin said in a conference call.
The ratio of revenue to operating expenses improved by 0.6 percentage points to a record low of 56.6 per cent compared with 57.2 per cent a year ago.
For the full year, CN Rail (TSX:CNR) earned $3.64 billion or $4.67 per diluted share on $12 billion in revenue. That compared with a profit of $3.54 billion or $4.39 per share on $12.6 billion in revenue in 2015.
During the quarter, carloadings increased three per cent and revenue ton-miles increased four per cent.
“That is an encouraging sign that the worst of the market correction and several commodity sectors is behind us and brighter prospects lay ahead,” Jobin added.
The results were achieved despite experiencing its second coldest and snowiest December.
The country’s largest railway said its expects adjusted earnings this year to increase by about five per cent to approximately about $4.82 per diluted share.
“Overall, the economy remains challenging, but we remain optimistic and expect to see moderate volume growth in 2017,” Jobin told analysts.
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Ross Marowits, The Canadian Press
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