Canadian National railway (CN) posted a net income of US$503 million for the third quarter of 2007 compared with $515 million for the same period last year.

The net income included a $14.5 million benefit from favourable tax adjustments related to the enactment of corporate tax rate
changes in Canada and net capital losses arising from a reorganisation of certain subsidiaries.

Third-quarter revenues of $2.09 billion were relatively flat, largely on account of the unfavourable translation impact of a stronger Canadian dollar on US dollar-denominated revenues, lower fuel surcharge revenues resulting from a decrease in the applicable year-over-year oil prices, and weaknesses in specific markets, particularly forest products.

These decreases were partly offset by freight rate increases, an overall improvement in traffic mix, driven primarily by extended routings, and volume growth in Canadian coal,grain and fertilisers, petroleum and chemicals, and automotive traffic.

Net income for the first nine months of 2007 was $1.36 billion compared with $1.63 billion in the same period the previous year.

Revenues for the first nine months were relatively flat at $6.17 billion, as freight rate increases and an overall improvement in traffic mix were largely offset by the impact of the first-quarter United Transportation Union (UTU) strike and adverse weather conditions, operational challenges, primarily in western Canada, the translation impact of a stronger Canadian dollar on US dollar-denominated revenues, lower fuel surcharge revenues as a result of a decrease in the applicable year-over-year oil prices, and weakness in specific markets, particularly forest products.

Revenue ton-miles for the first nine months of 2007 declined two per cent from the comparable period of 2006, while total rail freight revenue per ton-mile increased two per cent.