MONTREAL — CN Rail is raising its quarterly dividend 10 per cent after its 2017 profits surged 51 per cent to nearly $5.5 billion helped by lower U.S. taxes.
The country’s largest railway says it will pay 45.5 cents per common share on March 29, to shareholders of record on March 8.
During the fourth quarter, the Montreal-based railway earned $2.61 billion or $3.48 per share. That compared to $1.1 billion or $1.32 per share a year earlier.
Excluding a $1.76 billion deferred income tax recovery, profits decreased six per cent to $897 million or $1.20 per share.
Revenues increased two per cent in the quarter ending Dec. 31 to $3.28 billion.
“Throughout the year we faced rapidly changing market demands and in the fourth quarter dealt with challenging operating conditions, including harsh early winter weather across the network, impacting our performance,” stated president and CEO Luc Jobin.
The railway has been hiring staff and expects to have 400 more conductors available in the first quarter.
It plans to spend a record $3.2 billion in 2018, including $700 million for the acquisition of 60 new locomotives, track infrastructure expansion and intermodal terminal improvements.
Track infrastructure maintenance will get $1.6 billion and about $400 million for the installation of positive train control in the United States.
Jobin said the railway expects continued volume growth this year because of a good economic growth in North America.
CN said it is aiming to reach $5.25 to $5.40 in adjusted earnings in 2018, up from $4.99 in 2017.
For the full year, revenues were up eight per cent to $13 billion.
Adjusted profits were up six per cent to $3.8 billion or $4.99 per share.
Companies in this report: (TSX:CNR)
Ross Marowits, The Canadian Press