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Canadian National Railway Co. boosted revenue by 9 per cent in the second quarter, as Canada’s largest railway saw oil and grain volumes rise.

The year-over-year increase in sales was also helped by the inclusion of TransX, a trucking company CN recently bought to expand its reach in the container shipping supply chain.

CN posted a second-quarter profit of $1.36-billion, or $1.88 a share, after markets closed on Tuesday, compared with $1.3-billion ($1.77) in the same period of 2018. Revenue was $3.95-billion, up from $3.6-billion per cent in the second quarter in 2018.

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Adjusted for taxes and costs, CN made $1.25-billion, or $1.73 a share, in the three months ending on June 30. Analysts expected adjusted per-share profit of $1.65 and revenue of $3.9-billion.

Expenses climbed by 8 per cent, mainly due to the addition of TransX, a weaker dollar and higher costs to handle rising freight volumes, CN said in the news release accompanying the results. CN’s operating ratio, which compares sales with expenses, improved to 57.5 per cent.

Montreal-based CN, which has 24,000 employees in Canada and the United States, operates a 32,000-kilometre freight network that reaches the east and west coasts and the U.S. Gulf Coast.

Canadian rail-freight traffic is up by 2 per cent in the first 28 weeks of the year, compared with the same period in 2018, according to the American Association of Railroads, which includes the U.S. operations of CN and Canadian Pacific Railway Ltd. This compares with a drop of more than 3 per cent for U.S. rail companies.

CN’s share price has risen by 18 per cent this year, outpacing the 15-per-cent increase in the S&P/TSX Composite Index.

Ghislain Houle, CN’s chief financial officer, said on a conference call with analysts on Tuesday that volumes missed the company’s expectations but should rise as the year continues, pointing to low unemployment rates and a robust U.S. economy, as well as a new coal mine and a new propane terminal in Prince Rupert, B.C.

Petroleum and chemical shipping revenue increased by 26 per cent year-over-year, while shipping containers rose by 15 per cent. Metals, minerals and forest products posted small declines in sales.

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“Our crude-oil shipments increased significantly in the quarter, and we’re optimistic that the Alberta government will enable that momentum to continue for the balance of the year,” Mr. Houle said, referring to the province’s easing of its oil-production curtailment.

CN stuck with its full-year forecast for adjusted profit growth of low double-digits but warned of expected volatility in demand for shipments of grain, lumber and crude oil. The Chinese ban on Canadian canola is expected to drive up the crop supplies awaiting shipment, CN said.

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