To enhance its operating efficiency,
Canadian National Railway Company (
which operates the largest rail network in Canada and the only
transcontinental network in North America merged three of its
operational units - Elgin, Joliet and Eastern Railway Company
into its Wisconsin Central Ltd. (WC) subsidiary.
Canadian National remains highly optimistic about the merger
as it will certainly boost its performance going forward.
Canadian National expects strong demand across all its
businesses with improvement in wholesale and retail markets
supporting high business volumes for the company. Based on which,
in 2012, the company had planned to invest C$1.8 billion to
upgrade its railway infrastructure project. So, opening of
offices across the Southeast Asian countries is also a part of
its aggressive growth plan.
Despite the slowing economy and stiff competition from
Canadian Pacific Railway
), we believe the improving operating efficiency along with
expansion growth in key markets will help the company achieve
strong financial results in the forthcoming quarters. This has
underpinned mid-single digit carload growth and approximately 10%
earnings growth in 2012. Management continues to expect a
sustainable operating ratio, given stronger volume growth at low
incremental cost with productivity initiatives like improving
system velocity and fuel efficiency.
Currently, Canadian National Railway has a Zacks #4 Rank,
implying a short-term Sell rating on the stock. For the long
term, however, we maintain our Neutral recommendation on the
Based in Montreal, Canada, Canadian National Railway Company
is engaged in the rail and related transportation business.
CDN NATL RY CO (CNI): Free Stock Analysis
CDN PAC RLWY (CP): Free Stock Analysis Report
To read this article on Zacks.com click here.