Cana­dian rail­ways fac­ing tough con­di­tions

Cape Breton Post - - CLASSIFIEDS/BUSINESS -

Canada’s slug­gish econ­omy and lower vol­umes of coal, grain and energy-re­lated prod­ucts could un­der­mine the lofty 2015 earn­ings goals for the coun­trys two largest rail­ways, say in­dus­try an­a­lysts.

Cana­dian Na­tional (TSX:CNR) and Cana­dian Pa­cific (TSX:CP) are ex­pected to tem­per their earn­ings out­look when they re­port re­sults next week.

Cal­gary-based CP had an­tic­i­pated at least 25 per cent earn­ings per share growth for the year, while Mon­treal’s CN had sug­gested nearly 10 per cent growth.

But lower freight vol­umes in re­cent months prompted sev­eral an­a­lysts to trim their earn­ings fore­casts for the sec­ond quar­ter and raise con­cerns about the cur­rent quar­ter that be­gan July 1.

BMO Cap­i­tal Mar­kets an­a­lyst Fadi Chamoun warns of a “tough earn­ings sea­son ahead,’’ adding that a turn­around in vol­umes may not come un­til later this year or early 2016.

CN’s vol­umes were down 7.3 per cent in the sec­ond quar­ter, led by dou­ble-digit de­creases for coal and grain. CP vol­umes de­creased 5.8 per cent, hurt by U.S. grain, crude and do­mes­tic in­ter­modal.

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