MONTREAL — Canadian National Railway Co. said its 2017 profits surged 51 per cent to nearly $5.5 billion as it was helped by lower U.S. taxes.
During the fourth quarter, the railway earned $2.61 billion or $3.48 per share. That compared to $1.1 billion or $1.32 per share a year earlier.
Excluding a $1.76 billion deferred income tax recovery, profits decreased six per cent to $897 million or $1.20 per share.
Revenues increased two per cent in the quarter ending Dec. 31 to $3.28 billion.
The fourth-quarter results missed expectations as cold winter weather across its network slowed train speeds.
Chief operating officer Michael Cory said high volumes and cold weather hurt train fluidity in the fourth quarter.
“This harsher winter, coupled with higher volumes in certain segments of our network, has had a greater impact on overall velocity and productivity than we have seen in the previous three years,” he told analysts.
He said volume was helped by a doubling of frac sand and double-digit increases in crude oil, intermodal, automotive and fertilizers.
The railway has been hiring staff and expects to have 400 more conductors available in the first quarter.
It plans to spend a record $3.2 billion in 2018, including $700 million for the acquisition of 60 new locomotives, track infrastructure expansion and intermodal terminal improvements.
Track infrastructure maintenance will get $1.6 billion and about $400 million for the installation of positive train control in the United States.
Daniel Sherman of Edward Jones said the railway's focus on growth over cutting costs makes it a good long-term investment.
“CN is focusing on its value proposition and how it fits into the supply chain of its customers, expanding capacity where it has an advantage and using new technology to better position itself for future business,” he wrote in a report.
For the full year, revenues were up eight per cent to $13 billion.
Adjusted profits were up six per cent to $3.8 billion or $4.99 per share.
© 2018 The Canadian Press