Canada - Canada's major railways are weathering the slump in freight traffic that has gripped the North American rail sector, aided by a slumping loonie and a tight rein on costs.
 
Canadian National Railway (CN) on Tuesday beat analysts' expectations with an 11 percent rise in fourth-quarter profit and raised its dividend by 20 percent.
 
Calgary-based Canadian Pacific Railway (CP) last week posted record profit for the final three months of 2015, even as freight volumes slowed across a broad range of goods.
 
Montreal-based CN said profit rose to $941 million while diluted earnings per share increased by 15 percent to $1.18.
 
Revenue fell by 1 percent to $3.2 billion as carloads declined by 8 percent.
 
Analysts had expected per-share profit of $1.11 and revenue of $3.2 billion.
 
"Execution in a challenging market continues to be a strength of CN," said Christian Wetherbee, an equities analyst with Citigroup.
 
"I'm proud of the team and what they were able to achieve," CN chief executive Claude Mongeau said, on his first conference call since taking time off in August for surgery on a throat tumour.
 
"The team did such a good job I couldn't wait to come back," he said, making light of his treatment.
 
"I have a new voice, it is a bit squeaky," Mr. Mongeau said.
 
Both railways get more than half of their revenues in U.S. dollars, while many of their expenses are in Canadian currency.
 
CN said the weakness in the Canadian currency against the U.S. dollar boosted revenue by 9 percent or $87 million for the quarter.
 
For the full year of 2015, CN's profit rose by 12 percent to $3.5 billion, or $4.39 a share.
 
Revenue rose by 4 percent to a record $12.6 billion.
 
CN has a work force of 23,000, 9 percent fewer employees than a year ago, and a 20,000 mile network in Canada and the United States that reaches three coasts.
 
CN's quarterly operating ratio, a closely watched measure of costs versus revenue, improved to 57.2 percent, compared with the industry median of 63.4 (lower is better).
 
CP's operating ratio, meanwhile, is 59.8 percent, a vast improvement over the past four years.
 
Mr. Mongeau acknowledged his rival's success, and said the efficiencies of both companies are "something to be proud of here. We have two Canadian railroads leading in terms of performance."
 
Railway freight volumes have slumped in the past year as demand and prices for industrial commodities slowed.
 
The decline, blamed in part on China, has helped send railway share prices lower.
 
CN's share price on the Toronto Stock Exchange has fallen by about 17 percent in the past 12 months, matching the decline on the broad S&P/TSX composite index.
 
The U.S. Dow Transportation Average of 20 stocks has declined by 25 percent over the same period.
 
Mr. Wetherbee, the analyst, said CN shares trade at a premium to its peers, and he remains neutral on them.
 
In the fourth quarter, CN posted higher revenue for automotive, forest products, intermodal containers, and grain.
 
Sales fell for metals and minerals, coal, petroleum, and chemicals.
 
For 2016, CN is forecasting "mid-single-digit" growth over 2015's per-share earnings of $4.44 as the company increases prices by 3 percent more than inflation.
 
Capital investments are expected to be $2.9 billion.
 
Eric Atkins.