Reuters — Canadian National Railway on Tuesday cut its adjusted profit growth target for 2019, citing shipment delays from the country’s largest rail strike in a decade that ended last week.
Shares in CN, which counts billionaire Bill Gates’ investment firm as its biggest shareholder, fell almost two per cent in morning trading in both New York and Toronto, after the company said it expects 2019 adjusted diluted per share growth in low- to mid-single-digit range. CN had previously forecast growth in the high single-digit range.
CN, Canada’s largest railroad, estimated the strike to slice around 15 cents from its full year earnings per share.
Cascade Investment LLC, Gates’ investment vehicle, owns 16.5 per cent of CN’s outstanding shares, according to Refinitiv Eikon data.
The eight-day strike drew national attention over worker fatigue, after the Teamsters Canada Rail Conference labour union released a recording of an exhausted rail worker pleading with a CN supervisor for a break after a 10-hour shift.
The strike, which saw about 3,200 conductors and yard workers stop work, demanding improved working conditions and rest breaks, ended last week.
Prior to the strike, CN said it had cut management and union jobs as it grapples with an economic slowdown.
Desjardins analyst Benoit Poirier said in a note on Tuesday that while he expects investors to consider the impact from the strike as a one-time item, they “would be disappointed by the incremental earnings revision stemming from the challenging volume environment.”
Canada relies on CN and Canadian Pacific Railway to move products such as crops, oil, potash, coal and other manufactured goods to domestic ports and the United States.
— Reporting for Reuters by Rachit Vats in Bangalore; additional reporting by Allison Lampert in Montreal.