It seems that Canada’s two national railways keep on producing never-ending record performances. Although both carriers expressed caution about the immediate future, both produced very respectable third quarter results.

During the quarter, CN’s revenues increased by 3.9 per cent to $3.8 billion. Operating expenses, as a percentage of revenues, decreased from 59.5 per cent to 57.9 per cent, as a result of which operating income rose by 8.1 per cent to $1.6 billion. Cash flow from operations increased to $1.69 billion from $1.56 billion, but “free” cash flow, the amount remaining from operating cash flow after subtracting net investments made during the quarter and dividends paid to investors, declined to $315 million from $508 million, because of unusually large capital expenditures. From Jan 1 to Sept 30, CN spent $1.26 billion repurchasing its own shares, a reduction from the $1.52 billion spent during the same period in 2018, and paid $1.16 billion in dividends, an increase of $159 million over 2018.

During the quarter, CP’s revenues increased by 4.3 per cent to $1.98 billion. Operating expenses remained steady and, as a percentage of revenues, declined from 58.4 to 56.1 per cent. Cash flow from operations increased from $673 million to $823 million, and “free” cash flow rose from $158 million to $214 million. During the quarter, the company spent $500 million repurchasing its own shares, compared with an absence of such repurchases during the third quarter of 2018. For the nine months ended September 30, however, it spent $964 million on share repurchases.

At CN, metal and minerals, forest products and grains put in weak performances, which were offset by better performances in intermodal, automotive and petroleum and chemicals. Intermodal continued to be CN’s most important revenue generator ($1.02 billion for the quarter), but at $788 million in revenues, petroleum and chemicals solidified its second position. Revenue tonne miles were up significantly for petroleum and chemicals, up modestly for automotive, marginally unchanged for coal and intermodal, and down for CN’s other product categories. Despite relatively weak revenue tonne mile performance, rail freight revenue per tonne mile was up an average of 6 per cent.

CP’s best-performing product category was “energy, chemicals and plastics”, which registered a 12.7 per cent increase in freight revenues to $382 million. While intermodal continued to be CP’s largest single revenue generator ($409 million for the quarter), grain ($382 million) is not far behind, but both are likely to be surpassed by continuing strong growth in oil-by-rail shipments.