CN’s Q2 grain handle down, revenue less so

Canadian National Railway’s (CN) gross from grain and fertilizer traffic in its quarter ending June 30 dropped only slightly compared to the number of grain and fertilizer cars it hauled.

CN on Monday posted total second-quarter (Q2) net income of $387 million on $1.78 billion in revenues, down from $459 million on $2.1 billion in the year-earlier period.

Gross revenue from Montreal-based CN’s grain and fertilizer handling business was down just one per cent in Q2, at $330 million. However, the railway’s handle of grain and fertilizer dropped to 130,000 carloads in Q2, down 14 per cent from 148,000 in the year-earlier Q2.

Thus the railway posted a 12 per cent jump in gross revenue per carload of grain and fertilizer at $2,538, up from $2,257 in the year-earlier period.

“The second quarter of 2009 saw a continuation of significant weakness in most of our commodity groups as a result of the current recession in North America and difficult global economic conditions, with all groups but coal registering double-digit declines in carloadings,” CN CEO Hunter Harrison said in a release Monday.

However, he said, “while the current economic environment continues to affect our business significantly and we remain focused on adjusting expenses accordingly, we see some signs that several markets are stabilizing and we hope the economy will begin to recover in the second half of this year.”

CN also blamed the drop in overall Q2 revenue partly on a lower fuel surcharge, due to year-over-year decreases in applicable fuel prices.

Partly offsetting these factors, CN said, were the impacts of a weaker loonie on U.S.-dollar-denominated revenues, freight rate increases, and a “positive change in traffic mix.”

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