Canadian National Railway Co. is planning its second straight year of record investment as pressure builds to haul more commodities and consumer goods.
Capital spending this year will climb to about C$3.9 billion ($2.95 billion), including about C$1.6 billion for maintenance on railway infrastructure, the company said in a statement Tuesday as it reported earnings. Canadian National had been targeting spending of C$3.5 billion for 2018.
“We have a solid pipeline of growth opportunities and we’re ready to accommodate it at low incremental cost,” Chief Operating Officer Mike Cory said on a conference call with analysts.
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In the fourth quarter, adjusted earnings rose to C$1.49 a share, topping the C$1.47 average of analyst estimates compiled by Bloomberg. Revenue climbed 16 percent to C$3.81 billion, matching expectations.
Profit in 2019 will advance “in the low double digits,” Canadian National said Tuesday. That’s in line with the 13 percent gain predicted by analysts.
Freight will post a “high single-digit” increase as expressed by revenue ton-miles, the Montreal-based company said. The measure is currently up about 10 percent since the start of the year, Ruest said on the conference call.
“With much of the work completed to refurbish its network, CN’s service should continue to improve in 2019 as it adds locomotives and newly trained crews,” Dan Sherman, an analyst at Edward Jones, said in a note to clients.