CN Rail reports 27% net income jump
Better results and JJ Ruest named CEO
After a tumultuous period marred by capacity constraints, Canadian National Railway Co. said Tuesday it is well ahead of its turnaround plan as it reported a 27 per cent jump in quarterly net income.
The railway said its second-quarter profit jumped by $279 million to $1.3 billion in the three-month period ended June 30. It now expects its end-of-year adjusted earnings to be between $5.30 and $5.45 per share, an increase from three months earlier when the railway lowered those financial targets.
The better-than-expected results came the same day the railroad announced it had appointed Jean-Jacques (JJ) Ruest to be its new chief executive officer and president, following a four-month period during which he served as interim CEO.
“Despite a very challenging first quarter, our team of railroaders is definitely not giving up on delivering solid year-end results,” Ruest said on a call with analysts after markets closed. “We are ahead of our turnaround plan and we expect progressive improvement during the second half (of 2018).”
“We follow the developments of investigations by our international counterparts, and we are carefully reviewing the recent actions taken by the European Commission,” Jayme Albert said in an email. “Should new evidence come to light of anti-competitive conduct that may affect the Canadian marketplace, by Google or any other market participant, the Bureau won’t hesitate to take appropriate action.”
The bureau issued a similar warning over two years ago, in April 2016, when Canada’s competition commissioner announced that a probe of Google — prompted by allegations of anticompetitive conduct — had been discontinued.
At the time, however, the commissioner said the bureau would keep an eye on the situation, “including the results from investigations of our international counterparts.”
Albert said it would be “inappropriate to comment further,” as the agency is legally required to do its work confidentially.
“Generally speaking, whenever the Bureau becomes aware of alleged anti-competitive behaviour, it conducts a thorough and complete examination of the facts as they relate to Canada before reaching any conclusion as to whether or not the Competition Act has been contravened,” Albert said.
As of publication time, Google had not responded to a request for comment.
Among the Competition Bureau’s findings in 2016 was that Google “used anti-competitive clauses in its AdWords Application Programming Interface (API) Terms and Conditions” that the agency concluded were meant to keep out rivals. Google removed those clauses and made a commitment to Canada’s competition commissioner not to reintroduce them for five years.
The Competition Bureau also said in 2016 that it did not find sufficient evidence to back up the other allegations of anti-competitive behaviour. Subsequently, a memo prepared within the federal Department of Canadian Heritage in June 2016, and later obtained by the Financial Post, noted that the 50.5 per cent market share Android had in Canada at the time was smaller than the 90-per-cent share in the EU.
In response to the EU’s latest decision, Google CEO Sundar Pichai wrote in a blog post that the company has “always agreed that with size comes responsibility.”
“A healthy, thriving Android ecosystem is in everyone’s interest, and we’ve shown we’re willing to make changes,” he added. “But we are concerned that today’s decision will upset the careful balance that we have struck with Android, and that it sends a troubling signal in favour of proprietary systems over open platforms.”
The fine announced last week followed another the European Commission levied against Google in June of 2017 for “abusing its dominance as a search engine by giving an illegal advantage to Google’s own comparison shopping service,” a release said. Alphabet says it appealed that EC decision in Sept. 2017, and has since made changes to bring shopping ads into compliance with the European ruling.
CONCERNED THAT TODAY’S DECISION WILL UPSET THE CAREFUL BALANCE.