CN Rail slashes profit guidance due to strike, layoffs still planned despite backlog

Click to play video: 'Marc Garneau speaks on rail strike: ‘CN is very aware of their customers needs’'
Marc Garneau speaks on rail strike: ‘CN is very aware of their customers needs’
Minister of Transport Marc Garneau spoke at the House of Commons on Tuesday about the week-long CN rail strike. Garuneau said that despite the eight-day interruption, CN will provide a “revised winter plan” to have the trains running again – Nov 26, 2019

Canadian National Railway Co. cut its profit forecast Tuesday in the wake of an eight-day strike by 3,200 workers that brought the railway to a near halt.

CN now predicts 2019 adjusted diluted earnings per share will grow in the mid single-digit range, down from earlier guidance targeting the high single-digits.

The strike reduced its earnings per share by about 15 cents, CN estimated.

“While we expect to take some time and we remain dependent on favourable weather, we are pleased by how things are progressing,” said chief executive JJ Ruest in a statement.

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READ MORE: CN Rail works to get trains on track — but grain, propane industries remain worried

Despite the backlog of freight and containers, the company suggested it would go ahead with planned layoffs of roughly 1,600 employees as economic growth slows.

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The Montreal-based railway said it “remains focused on continuing to realign its resources in light of the weaker demand, including its workforce, to address cost takeout efforts that started prior to the strike.”

CN confirmed last month layoffs were coming and a source familiar with the matter cited about 1,600 impending job losses.

Meanwhile, chief rival Canadian Pacific Railway Ltd. moved more Canadian grain in November than in any month in its 138-year history.

READ MORE: CN strike is over, but experts warn supply chain could be off-track for weeks

CP announced Monday it moved 2.74 million tonnes of grain, three per cent more than its record-setting October shipment amid a hefty harvest that has put pressure on the rail networks.

CN reached a tentative agreement last week with Teamsters Canada to end the longest rail strike since 2012.

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