Canadian National Railway Co. said Monday that second-quarter profit rose 14 percent on higher rates and an increase in volume.
The results beat analysts’ expectations, as rail freight revenue per carload inched 3 percent higher while operating expenses to ship one ton a mile declined slightly.
Volume growth was slower than expected, but the company made no change to the financial outlook that it issued in January, which called for “high single-digit growth” over the 2012 adjusted earnings of 5.61 Canadian dollars per share.
CEO Claude Mongeau said that the railroad would aim to meet its full-year financial target by focusing on boosting revenue faster than the economy and by tightly controlling costs.
The company also maintained its April plan for capital spending of about 2 billion Canadian dollars (about $1.93 billion at current exchange rates) in 2013.
Second-quarter net income was CA$717 million, or CA$1.69 per share, compared with CA$631 million, or CA$1.44 per share, a year earlier.
The company said that excluding items such as a gain on a transaction with another railroad, it would have earned CA$1.66 per share.
Revenue rose 5 percent to CA$2.67 billion on a matching increase in volume, which is measured in tons carried times miles.
Analysts expected the company to earn CA$1.61 per share on revenue of CA$2.69 billion, according to FactSet.
Canadian National credited the revenue increase on freight rate increases, demand from energy markets, market share gains, economic growth in North America and the weaker Canadian dollar, which boosted U.S. dollar-denominated revenue.
Revenue from carrying petroleum and chemicals rose 18 percent, with smaller gains for grain, metals and minerals, and forest products. Revenue from coal was flat and automotive revenue dipped 3 percent.
Separately, the company announced a third-quarter dividend of 43 Canadian cents per share, to be paid Sept. 30 to shareholders as of Sept. 9. That was unchanged from the previous quarterly payout.
Canadian National subsidiaries operate freight railroads throughout Canada and to many U.S. cities.
The U.S.-traded shares of Canadian National fell 23 cents to close at $101.53 before the results were released. They were up 11 cents, to $101.64, in extended trading.