Canadian National Railway profit surges to $1.69 billion in Q3

Canadian National Railway Co.'s embattled CEO is retiring in the new year, the railway says as it reported a big jump in third-quarter profits.

Canadian National Railway Co.’s embattled CEO is retiring in the new year, the railway says as it reported a big jump in third-quarter profits thanks in part to a $770-million after-tax break fee it received after walking away from a takeover bid for Kansas City Southern railway.

The Montreal-based company says Jean-Jacques Ruest will leave at the end of January or when a successor has been appointed. Ruest has been a target for replacement by activist shareholder TCI Fund Management Ltd.

“I am not going anywhere and I will deliver with the team here today around me on the fourth-quarter results and to be sure that we have a successful setup to the 2022 business plan,” he told analysts in a conference call after markets closed.

Railway chairman Robert Pace said Ruest had deferred his retirement due to the KCS transaction and introduction of its strategic plan.

TCI has proposed former CN chief operating officer Jim Vena but Ruest said a search committee will consider a wide variety of candidates both inside the railway and elsewhere.

“We know there is some candidate out there, at least one, but I think the world is bigger than that. And before the board makes a decision, we want to be very, very thorough.”

CN said it earned $1.685 billion or $2.37 per diluted share for the three months ended Sept. 30, up from $1.38 per share or $985 million a year earlier.

Excluding one-time items such as the break fee, adjusted earnings increased 9.5 per cent to $1.08 billion or $1.52 per share, up from $985 million or $1.38 per share in the third quarter of 2020.