CN North America projects big loss - Canadian National Railways has $100 million in losses for it CN North American freight line - Brief Article

Railway Age, Sept, 1992

Canadian National is projecting a loss of $100 million (C) for its CN North America operations in calendar 1992. The parent company reported a second quarter loss of $15.3 million, which left it with a net loss of $8.6 million for the first half, mainly due to a decline in traffic and revenue from Canadian rail operatons.

CN North America, which produces more than 95% of the company's revenue, lost $33.5 million in the second quarter vs an income of $21 million for the same period last year. Western Canadian coal, sulphur, and potash loadings were down steeply, with smaller decreases in grain, pulp, and paper. These decreases were only partly offset by increased intermodal and U.S. revenues.

"The losses continue during the third quarter, and reflect long-term changes to the rail industry throughout the continent which see rate declines more than offsetting some modest volume increases," said John Sturgess, acting president and CEO. "The general trend is that railways are carrying more for less, along with attendant higher costs."

He said the parent company expects to lose about $70 million in 1992 "brought about by a loss of $100 million for its railway operations, partly offset by positive results from its other business activities." CP Rail is also feeling the impact of weak traffic but remains in the black. CP's six-month operating income was $96.1 million, down from $230.5 million year ago.