CNI Delivers Strong Results

Dahlman Rose has published a research report on Canadian National Railway Company CNI following strong results from the company's 3Q. In the report, Dahlman Rose writes "Revenue grew 15% to C$2.12 Bn, largely in line with our estimate and slightly above consensus estimate of $2.10 Bn. Meanwhile, the company was able to limit the increase in operating expenses to 11%. However, this favorable disparity between revenue and expense growth is not as pronounced as that seen in 2Q10 and 1Q10, perhaps signaling the leveling off and gradual decrease in incremental margins. That said, the company delivered a strong operating ratio (OR) of 60.7%, a 200 bps improvement from 3Q09 and a 50 bps improvement from 2Q10." Dahlman Rose maintains its Buy rating and $70 price target. Canadian National Railway closed yesterday at $66.57.