CN and CP announce second quarter results

Both of Canada’s major railways announced third quarter results for the period ended June 30. At both carriers, revenue growth lagged the growth rate of operating expenses, as challenging winter conditions increased operating expenses, and as both companies increased hiring and training activities to increase network capacity. CP suffered from interruptions resulting from labour negotiations and strike notices. (more…)

CN locomotive engineers in Canada ratify new contract

CN announced that the company’s 1,800 locomotives engineers in Canada have successfully ratified a new collective agreement.

The five-year contract with the Teamsters Canada Rail Conference (TCRC), which runs through Dec. 31, 2022, provides wage and benefit improvements in each year of the agreement, in line with similar contracts in the industry, and modifies work rules that were of concern to both CN and engineers. 

“This new contract demonstrates CN’s on-going commitment to working together with our employees and the TCRC to address workplace issues, in a respectful and mutually beneficial manner,” said Mike Cory, CN Executive Vice-President and Chief Operating Officer. “CN is very pleased to have renewed collective agreements with TCRC without any impact on the service we provide to customers and the North American economy.”

CN recognizes the assistance of Peter Simpson, head of the federal mediation and conciliation service, and his staff, during the collective bargaining process. 

CP and IBEW reach a tentative three-year agreement; TCRC-T&E and CP reach tentative, four-year agreement

Canadian Pacific Railway Limited and System Council No. 11 of the International Brotherhood of Electrical Workers (IBEW) are pleased to announce that they have reached a tentative three-year deal.

CP President and CEO Keith Creel thanked the IBEW bargaining committee for their hard work and their creativity. “We have come through a number of challenging years to become an operational leader,” Creel said. “I look forward to working with this union to become the employer of choice.” (more…)

CN investing in new grain, lumber and boxcars, as well as infrastructure

CN plans to acquire 1,000 new generation high-cube grain hopper cars over the next two years to rejuvenate the aging equipment needed to serve increasing annual crop yields.

“This substantial investment in higher capacity payload hopper cars, with up to 10 per cent more capacity than the older generation, demonstrates our commitment to safely, efficiently and reliably moving the steadily increasing Prairie grain crop for our customers,” said JJ Ruest, Interim President and Chief Executive Officer of CN. “We clearly understand how important having an effective grain supply chain is to our nation’s reputation as a stable trade partner. With this week’s news of regulatory certainty, we can now make decisive long-term investments that will benefit the entire grain industry.” (more…)

CP announces plans for half billion dollar investment in future of grain supply chain with railcar order

Canadian Pacific Railway announced plans to invest more than a half-billion dollars on new high-capacity grain hopper cars as part of its commitment to the North American agricultural sector. CP grain shippers can expect to see more than 500 of these new cars in service before the end of 2018, enabling CP to transport more grain in each dedicated train. (more…)

CN and CP announce first quarter 2018 results

Both of Canada’s major railways felt the effects of a weak economy, and capacity constraints, exacerbated by bad weather, and produced somewhat disappointing financial results. Both carriers restated the financials pertaining to the first quarter of 2017, but we chose to maintain them as originally presented. As is evident from the table, net income as a percentage of revenues tumbled from 34 per cent in 2016 to 21 per cent in 2018 at CP, while at CN net income as a percentage of revenues dropped from 26.7 per cent in 2016 to 23.2 per cent in 2018. Both carriers have spent vast sums of cash repurchasing their own shares over the past few years, with CN in particular picking up the pace of these repurchases. Stock repurchases help maintain earnings per share numbers, as the company’s earnings are divided by a reduced number of outstanding shares. On the other hand, as is evident from the numbers, one could argue that share repurchases were financed entirely or in part through borrowed funds, and for that reason, have the effect of weakening the balance sheet, compared to what it would look like without the repurchases. (more…)