Business

CN Rail boosts earnings and spending outlook on robust demand and strong quarter

Canadian National Railway Co. has increased its earnings outlook and capital program for the year following a quarter that saw its net income increase 27 per cent in the last quarter compared with last year.

Canadian National Railway Co. has increased its earnings outlook and capital program for the year following a quarter that saw its net income increase 27 per cent in the last quarter compared with last year.

The company said Tuesday after markets closed that a "robust demand environment" along with its strong performance in the last quarter has the company aiming to earn $5.30 to $5.45 per adjusted diluted share this year, up from its previous guidance of $5.10 to $5.25.

CN Rail has also increased its capital program by $100 million to $3.5 billion to buy more new rail cars this year.

Earnings for the quarter ending June 30 came in at $1.31 billion, up from $1.03 billion from the same quarter last year. Adjusted diluted earnings per share were $1.51, up from $1.34 from last year.

Analysts had expected a net income of $1.02 billion and earnings per share of $1.39 according to Thomson Reuters Eikon.

Revenue came in at $3.63 billion, up from $3.22 billion in the second quarter of 2017, and above analyst expectations of $3.58 billion.

Earlier Tuesday the company said it had named Jean-Jacques Ruest as its president and chief executive.

Ruest, who has held the role on an interim basis since March, was given the job of dealing with a number of operational and customer service challenges when he was installed to replace Luc Jobin as CEO of Canada's largest railway company in March.

In October, CN said it didn't have enough crews to handle increased demand prompted by a stronger North American economy.

On Tuesday, CN chairman Robert Pace said that Ruest was the best choice and added that he has brought "vision, energy and speed" to his new role.

Ruest, 63, has been with Canadian National for 22 years, including eight as its chief marketing officer.

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