CN Rail earnings down slightly to $858 million as oil and coal shipments drop

MONTREAL – Canadian National Railway’s second-quarter earnings took a hit from lower shipments of energy-related commodities, but it says the minor slump was partially offset by higher returns from U.S.-dollar-priced shipments, freight rate increases and more lumber shipments.

The country’s largest railway (TSX:CNR) said net earnings in the three months ended June 31 were down 3.1 per cent to $858 million or $1.11 per diluted share, compared with $886 million or $1.15 per diluted share in the same quarter last year.

Revenue dropped nine per cent to $2.84 billion in the quarter from $3.13 billion in the second quarter of 2015, with coal revenue down 36 per cent, metals and minerals down 17 per cent, and petroleum and chemicals down 16 per cent.

Forest products were the only segment to see an increase in revenues, climbing four per cent in the quarter.

The company said it expects shipping volumes to rise in the latter half of the year, thanks in part to an expected bumper grain crop in Canada.

CN Rail maintained its April financial outlook aiming to deliver earnings per share in line with last year’s adjusted diluted earnings of $4.44 per share.

Note to readers: This is a corrected story. A previous version said CN Rail’s earnings were partially offset by higher freight costs.