UPDATE 2-CN Rail profit rises on tax gain, ups dividend
(Updates with conference call, comments on EJ&E deal)
By Allan Dowd
VANCOUVER, British Columbia, Jan 22 (Reuters) - Canadian National Railway (CNR.TO: Quote, Profile, Research) posted a higher fourth-quarter net profit on Tuesday and said that while it was worried about the U.S. housing market in 2008 it does not see the economy falling into a full recession.
"What we're calling for is a soft landing," Chief Financial Officer Claude Mongeau told analysts in a conference call, saying the railway was looking for North American GDP growth to be about 1.7 percent this year.
CN, which operates in both Canada and the United States, said a tax-related item and gains from the sale of its Montreal headquarters and its stake in a British railway boosted its net income at a time when revenue and its operating income both dropped about 3 percent.
The company also increased its quarterly cash dividend to 23 Canadian cents a share from 21 Canadian cents.
CN said it expects revenue growth next year to be in the range of 6 to 8 percent, and growth in 2008 earnings per share to be in the "range of mid- to high single digit" from its 2007 adjusted diluted EPS of C$3.40.
The railway has budgeted C$1.5 billion for capital spending in 2008.
CN reported a net profit of C$833 million ($809 million), or C$1.68 a share, for the final quarter of 2007. That compared with C$499 million, or 95 Canadian cents a share, in the same period a year earlier. Continued...







