Prince George, B.C. – Canadian National Railway is forecasting a strong year in 2012 after recording first-quarter profits that were up 16 per cent.

 

The railway reports that it earned $775 million for the period ended March 31, 2012. The results prompted the company to revise its 2012 earnings outlook to 10 per cent adjusted earnings growth.

Helped by a mild winter  revenues increased 13 per cent to a first-quarter record of $2.35 billion. That’s higher than the nearly $2.3 billion forecasted by analysts. Revenue ton-miles rose six per cent while carloadings increased five per cent. Operating income increased 23 per cent to $793 million. Free cash flow was $48 million, after paying $450 million in voluntary pension plan contributions. The railway also expects to generate about $950 million in free cash flow, compared to $875 million in its prior forecast.

The better first-quarter revenues stemmed from higher freight volumes due in part to continuing improvements in North American and global economies, a milder winter and the company’s performance in several key segments.

Revenues increased for metals and minerals by 31 per cent, coal by 18 per cent and intermodal by 17 per cent. Petroleum and chemicals, automotive and forest products were also up by double digits. Operating expenses for the first quarter increased by eight per cent to $1.55 billion, mainly due to higher fuel costs as well as labour and fringe benefits expense.