CN lowers financial outlook after weeklong strike
Canadian National Railway is cutting its annual profit forecast after an eight-day strike that brought the country’s largest railroad to a near halt during a critical shipment season for farmers.
The railway said Tuesday its bottom line will take an estimated hit of 15 cents per share due to the labour action by 3,200 conductors and yard workers represented by Teamsters Canada. The parties reached a tentative deal last week after collective bargaining where worker fatigue and health care were major sticking points.
CN revised its annual outlook to expect low to mid single-digit growth in earnings per share, down from its previous prediction of high single-digit growth.
This is the second time CN has lowered its guidance since October, when both CN and its competitor Canadian Pacific Railway downgraded their financial forecasts due to global trade wars and economic uncertainty.
CN will also continue to cut jobs as part of cost-cutting measures it initiated before the strike to account for weaker demand, the railway said in a statement. The layoffs started last month for both union jobs and management positions at the head office in Montreal, although CN did not confirm reports that 1,600 employees will be affected.
Executives said last week it will take between one and four weeks to resume regular service after the disruption depending on where a customer is located in the 21,000mile network. Still, CN chief executive JJ Ruest said the recovery plan is already delivering results.
“While we expect to take some time and we remain dependent on favourable weather, we are pleased by how things are progressing,” Ruest said in the 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.”