By Mary de Wet

Canadian National Railway Co. posted a 2% increase in fourth-quarter revenue on grain shipments and expects growth in volume demand to extend into the current year.

On 2021 outlook:

"While the recovery remains uneven across the markets we serve, we are pleased by the momentum in volume demand that grew during the fourth quarter and continues to grow," said President and Chief Executive JJ Ruest.

"We are increasingly optimistic about 2021 and we are reinstating our full-year financial outlook," Mr. Ruest said.

The company aims to deliver earnings-per-share growth in the high single-digit range this year.

Canada's grain crop in the 2020-2021 crop year was above its three-year average and the U.S. grain crop was in line with its three-year average, Canadian National Railway said. "The Company assumes that the 2021/2022 grain crops in both Canada and the U.S. will be in line with their respective three-year averages."

The company expects mid-single-digit volume growth in 2021 in terms of revenue ton miles as it sees growth opportunities, despite weakness in sectors of the broad freight environment.

On fourth-quarter results:

Revenue rose 2% on record shipments of Canadian grain, increased shipments of U.S. grain, higher international container traffic via the Port of Vancouver and freight rate increases, the company said. The gains were partly offset by lower applicable fuel surcharge rates and lower volumes of petroleum crude.

Operating expenses fell 5% due to lower fuel costs as well as lower purchased services and materials expense.

Grains and fertilizers passed intermodal as the largest segment in terms of revenue ton miles, at 17.9 million, up 28% from a year ago.

On full-year results:

"Revenues for 2020 decreased by seven per cent to C$13,819 million, when compared to 2019. The decrease in revenues was mainly attributable to lower volumes across most commodity groups, primarily in the second and third quarter, caused by the ongoing effects of the COVID-19 pandemic and lower applicable fuel surcharge rates, partly offset by freight rate increases as well as record shipments of Canadian grain.

"RTMs declined by five per cent. Freight revenue per RTM decreased by two per cent, mainly driven by lower applicable fuel surcharge rates, partly offset by freight rate increases.

"Operating expenses decreased by three per cent to C$9,042 million, mainly due to lower fuel and labor costs and decreased purchased services and material expense; partly offset by a loss on assets held for sale, resulting from the Company's decision to market for sale for on-going rail operations, certain non-core lines."

Write to Mary de Wet at mary.dewet@dowjones.com

(END) Dow Jones Newswires

01-26-21 1734ET