CN Revenue Down 11% in 3rd Quarter

Canadian National reported this week that during the third quarter it had revenues of C$3.41 billion (US$2.59 billion), a decrease of C$421 million (US$319 million) or 11 percent when compared with the same quarter of 2019 period.

In a news release, CN attributed the drop in revenues “mainly due to lower volumes across most commodity groups caused by the ongoing effects of the COVID-19 pandemic.”

CN said other factors included lower fuel surcharge rates, which were partly offset by freight rate increases, and increased shipments of Canadian grain.

Revenue ton miles fell 7 percent while freight revenue per RTM fell by 3 percent over the year-earlier period.

Operating expenses were down 8 percent to C$2.04 billion (US$1.55 billion). CN said this was prompted by lower fuel and labor costs, and fewer purchased services and material expenses.

“The decrease in the first nine months was partly offset by a loss on assets held for sale in the second quarter, resulting from the company’s decision to market for sale for on-going rail operations, certain non-core lines,” CN officials said in a statement.

The third quarter also saw CN experience increased traffic compared with the second quarter of this year. However, overall demand remained below 2019 levels.

CN said by the end of the third quarter some commodities had recovered at or close to 2019 levels.

This included intermodal traffic, lumber and panels used in home renovations and new home construction, and export grain and fertilizers.

Such commodities as finished vehicles, industrial products, petroleum and chemical products, coal, and frac sand remained below pre-pandemic levels.

 “As we look at the fourth quarter and beyond, we continue to see sequential improvements and momentum leading us to have a cautious optimism about the future,” CN President and CEO JJ Ruest said in a statement. “We remain confident in our ability to continue delivering long-term shareholder value.”

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