CN sees rail profit grow with economic recovery

Canadian National Railway Co., the country’s biggest rail carrier, boosted its full-year forecast after posting higher first-quarter profit than analysts projected as economic growth bolstered carloads.

Profit excluding some items rose to $1.18 a share from 90 cents a year earlier, the company said. That beat the average estimate of $1.03 from 25 analysts surveyed by Bloomberg. Canadian National now projects full-year earnings will increase 10 per cent, compared with a previous forecast of as much as 10 per cent.

Canadian National is benefiting as coal shipments for overseas steelmakers, metals, minerals and consumer goods advance amid global economic expansion. The Montrealbased company also raised rates as its service improves.

Including an after-tax gain from a rail-line sale, net income climbed to $775 million, or $1.75 a share, from $668 million, or $1.45 a share.

Revenue climbed 13 per cent to $2.34 billion partly because of freight volumes increasing as the North American economy expanded and also a milder winter, Canadian National said in the statement.

In 2012, the railroad plans to invest about $1.8 billion in capital programs, up from $1.75 billion, of which more than $1 billion will be targeted to track improvements.

The company’s access to the port of Prince Rupert on the West Coast is also helping it boost intermodal shipments, which can move by sea, rail and highway.