CN Announces New CEO, Strong Q4 Results
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Nearly a year after Canadian National Railway began pursuit of an ultimately unsuccessful $33 billion bid to merge with Kansas City Southern, the company will turn to Tracy Robinson, a former executive at one of CN’s rivals, as the railroad’s new president and CEO.
Robinson, who will begin her new position Feb. 22, is an executive vice president and president of Canadian natural gas pipelines with TC Energy. She oversees the company’s federally and provincially regulated natural gas pipeline assets in Canada.
Prior to joining TC Energy, Robinson spent 27 years at Canadian Pacific Railway in executive roles, including operations, finance and commercial business development.
“We are thrilled to have Tracy join CN as president and CEO and are confident that CN has the right team to lead it into the next phase of growth. She brings more than 35 years of operational management, strategy development and project execution experience to drive growth and profitability,” board Chairman Robert Pace said as CN announced strong fourth-quarter and end-of-year financial results.
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Robinson succeeds JJ Ruest as CEO. Ruest announced in October 2021 he intended to retire after coming under fire from shareholders following CN’s failed bid to obtain Kansas City Southern. The merger ran into stiff regulatory headwinds when the Surface Transportation Board ruled CN’s plan to run KCS under what’s called a “voting trust” while the sale was taking place violated antitrust regulations. Months before the vote, the Biden administration raised its concerns, saying it believed the merger was anti-competitive.
CN paid millions in legal fees and $700 million in penalties to exit the deal after it was rejected by the STB. KCS is now in the process of merging with CP, albeit at a slightly lower price, in a deal that federal regulators say does not raise antitrust concerns, because CP and KCS have different overall route structures. KCS shareholders have approved the agreement.
For the fourth quarter CN reported generating C$3.75 billion in revenue, up 2.7% from 2020’s C$3.65 billion. For the full year CN reported C$14.5 billion in revenue, up nearly 5.1% from 2020’s $13.8 billion.
Fourth-quarter income was C$1.2 billion, or C$1.69 a share, compared with C$1.02 billion, C$1.43, in 2020. For the complete year CN reported income of C$4.9 billion, C$6.89, compared with C$3.56 billion, C$5, in 2020.
CN’s operating ratio improved to a fourth-quarter record of 58.3 compared with 61.4 in the same period of the prior year. For the entire year, the ratio improved to 61.2 compared with 2020’s full-year 65.4.
“I would like to thank our dedicated team of railroaders for delivering once again despite extreme weather and disruptive global supply chain issues,” Ruest said in a statement. “While I’ll be retiring, I am excited to see what CN’s world-class team will accomplish as they continue to lead the next transformation of the industry by delivering high-quality service to our customers and to the communities we serve, while driving sustainable returns to shareholders over the long term.”
Ruest
Ruest said his departure from CN was bittersweet, adding, “It’s been an honor to lead this great railroad for the last four years.”
Ruest has been CEO of the Montreal-based railroad since 2018. He joined CN in 1996 after working for a chemical company for 16 years in a variety of executive positions.
CN said revenue in four of its seven business categories rose, declined in two and was flat in one.
Intermodal revenue climbed 1% to C$1.05 billion from C$1.03 billion. For the year revenue increased 12%. Petroleum and chemical revenue rose 14% to C$755 million from C$664 million in the quarter. The annual increase was also 12%.
Metals and minerals moved up 11% for the quarter to C$393 million from C$354 million. The yearly increase was 10%.
Coal shipments increased a whopping 31% in Q4 to C$165 million from C$126 million. The annual increase was 20%.
Forest products were essentially flat, up C$2 million in the quarter to C$435 million compared with C$433 million a year ago. Annually that sector showed a 2% increase.
Grain and fertilizer products were down 13% in the quarter, CN said, in part because of weather-related challenges. Q4 revenue was C$643 million compared with C$742 million a year ago. The full year showed a 2% decline.
Automotive shipments dropped 4% for the quarter to $146 million from $152 million a year ago. On an annual basis the decline was 3%.
Canadian National ranks No. 19 on the Transport Topics Top 50 Global Freight Carriers list.
