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Canadian National (NYSE: CNI) lowered its earnings guidance based on the impact of the recent eight-day rail strike.
CN said on Dec. 3 that it expects adjusted earnings per share (EPS) growth in the low-to-mid single range for 2019. In October, the company had projected a high-single-digit growth on the 2018’s C$5.50 EPS. (A Canadian dollar equals US$0.75.)
CN estimated that the strike by about 3,200 Teamsters members cost C$0.15 per share. The walkout, which ended on Nov. 26, saw CN’s rail network capacity plunge by 90%.
Weekly performance figures, also released on Dec. 3, shows the extent of the strike’s impact. Revenue-ton-miles fell by nearly 36% compared to a year earlier.
At CN’s largest yard, near Toronto, dwell times reached 84.4 hours – compared with 25.3 prior to the strike. Network-wide, performance plummeted to 136 car miles per day – compared to 208 before the strike.
Nevertheless, CEO JJ Ruest said CN’s “recovery plan is delivering results.”
“While we expect to take some time and we remain dependent on favorable weather, we are pleased by how things are progressing,” Ruest said in a statement. “Safety is at the heart of everything we are doing as we bring our Canadian operations back online and we have not experienced any significant setbacks at this point.”
CN already had warned of a slower than expected 2019 after it released third-quarter earnings in October, citing lower rail volumes and a slower economy. Prior to the strike, the CN also announced layoffs, citing the slowdown.
This article first appeared on www.freightwaves.com
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