MONTREAL – Canadian National Railway Co. felt the heat of wildfires and labour disputes last quarter, as the company looks to bounce back from the resulting cargo backups and lost business.
The slower freight flow and higher costs associated with July’s devastating forest fire in Jasper, Alta., and CN’s coast-to-coast work stoppage in August tamped down third-quarter profits by two per cent year-over-year, executives said Tuesday.
“The Alberta wildfires came with some additional expenses which, combined, came through in our margin performance this quarter,” Robinson told analysts on a conference call.
The railway’s busiest corridor runs through Jasper, executives noted.
“There was a two-day period when the fires were burning that we just couldn’t run any trains at all,” said Derek Taylor, who heads field operations. “Once the worst of the fires passed, we were still severely limited in our operations.”
A month later, the phased shutdown of operations at both CN and rival Canadian Pacific Kansas City Ltd. culminated in a lockout in late August, spooking shippers and stranding cargo.
“On the demand side, the noise created by the labour situation clearly had an impact on our business in the quarter,” said Robinson, pointing to container shipments in particular — CN’s biggest segment.
Despite the obstacles, the railway’s second- and third-biggest categories enjoyed much higher revenues, as petroleum and chemicals as well as grain and fertilizers jumped 11 per cent and nine per cent, respectively.
The boost helped bump third-quarter revenues three per cent to $4.11 billion from $3.99 billion the year before.
However, net income at the country’s largest railway slipped to $1.09 billion in the three months ended Sept. 30, down from $1.11 billion in the same period a year earlier.
On an adjusted basis, diluted earnings increased nearly two per cent to $1.72 per share from $1.69 per share last year, in line with analysts’ expectations, according to financial markets firm LSEG Data & Analytics.
This report by The Canadian Press was first published Oct. 22, 2024.
Companies in this story: (TSX:CNR)
