CN set revenue record in fourth quarter, volume record in 2014

Driven by new energy markets and a 100-year Canadian grain crop, CN in fourth-quarter 2014 generated record revenue of $3.2 billion, up 11 percent compared with fourth-quarter 2013's total.

The Class I's quarterly report also shows that operating income jumped 30 percent to $1.26 billion, net income soared 33 percent to $844 million and adjusted earnings climbed 36 percent to $1.03 per share (all figures are in Canadian dollars). In addition, volume grew 11 percent to 1.45 million units and the operating ratio improved 4.1 points to 60.7.

By business category, intermodal revenue increased 10 percent to $680 million; petroleum and chemicals revenue climbed 21 percent to $628 million; grain and fertilizers revenue shot up 18 percent to $560 million; metals and minerals revenue soared 34 percent to $418 million; forest products revenue rose 11 percent to $398 million; coal revenue ratcheted up 8 percent to $172 million; and automotive revenue grew 18 percent to $159 million. Operating expenses rose 10 percent to $1.95 billion.

"CN delivered a strong fourth-quarter performance, concluding a remarkable year characterized by brutal first-quarter winter weather, followed by a strong rebound starting in March, and capped by record full-year freight volumes," said President and Chief Executive Officer Claude Mongeau in a press release. "We're particularly proud of our solid operating performance that allowed us to move record volumes of Western Canadian grain and equally strong U.S. grain shipments."

For the full year, CN generated revenue of $12.1 billion and registered traffic of 5.6 million units, up 15 percent and 8 percent, respectively, compared with 2013. Operating income jumped 19 percent to $4.6 billion, net income climbed 21 percent to $3.2 billion, adjusted earnings soared 23 percent to $3.76 per share, operating expenses rose 12 percent to $7.5 billion and the operating ratio improved 1.5 points to 61.9.

"Our agenda of 'Operational and Service Excellence' is clearly working. This momentum is helping us to grow CN's business faster than the overall economy and to do so at low incremental cost," said Mongeau. "This will provide us with a strong foundation for 2015, a year in which we see continued opportunities for growth in energy-related commodities, intermodal traffic, and commodities tied to U.S. housing construction, automotive sales and other consumer spending."

CN also announced plans to increase capital spending this year to about $2.6 billion, up $300 million compared with last year's budget.