Canadian National (NYSE: CNI) announced that its shipments of grain are moving at a pace similar to that experienced before some of its workers walked out.
Approximately 3,200 of the railroad’s conductors, trainspersons and yard workers went on an eight-day strike in November. The reduction in force resulted in a 90% decline in network capacity with weekly carloads declining 20% year-over-year and revenue ton-miles declining more than 35%.
Demand softness and the strike prompted management to lower its full-year 2019 adjusted earnings-per-share (EPS) guidance. CN’s new 2019 guidance calls for EPS to increase in the low- to mid-single-digit range, compared to the company’s prior expectation of high single-digit growth. C$0.15 per share of the lower guide was directly related to the negative impact from the work stoppage.
“After a tough harvest due to adverse weather and an 8 day labour stoppage, our railroaders have been hard at work to get movements back on track,” said CN’s vice-president of Bulk Allen Foster in the press release.
CN reported that after a weather-induced delay to the harvest, the 2019 crop yielded peak shipments of more than 6,800 hopper cars per week during the first two weeks of November, weeks 14 and 15 of the crop year. The railroad was unable to take in new orders during the strike in week 17 given its limited network capacity. However, by week 19 of the crop year, the second week of December, CN has returned to peak shipment levels and has been able to accept all customer orders requiring a hopper car.
The press release also referenced the achievement of two new milestones for the railroad.
Through the first 18 weeks of the crop year, CN has achieved records in monthly volume (2.8 million metric tonnes in October) and 685,187 metric tonnes for week 11 of the crop year.
“Our disciplined approach to recovery after the strike has allowed CN to return to a normal pace, as did all the investments we have made in track infrastructure and new locomotives over the past two years. We remain committed to delivering for our grain customers and enabling Canadian and North American trade and we will continue to work closely with them as we enter the critical winter season,” Foster concluded.
