Canadian National Railway Company on Tuesday reported third-quarter profit down 24% from the same period last year, which it attributed in part to a drop in demand for consumers and the impact of the longshore strike at British Columbia ports.
The CEO of Canada’s largest railway noted that excess inventory and 13-day enforcement action reduced its freight volumes and revenue last quarter, as did wildfires and floods in the two ends of the country.
“I think we’ve seen the trough in volumes,” Robinson told investors on a conference call, referring to container shipments. Still, she added that consumer activity “continues to be murky” in an uncertain economic environment.
Container volumes failed to recover in August at the ports of Vancouver and Prince Rupert, falling 23% and 59%, respectively, according to analyst Walter Spracklin of RBC Capital Markets. This trend continued into September.
“The strike at Canadian west coast ports this summer prompted ship operators to completely divert from Canadian ports to other destinations such as Los Angeles and Lázaro Cárdenas,” Mr. Spracklin added in a memo sent on October 13 to analysts.
“In our view, Canadian west coast ports are at risk of losing volumes in the longer term to U.S. and Mexican alternatives. »
CN marketing director Doug MacDonald said the company is working to bring customers back to Canadian ports and rail lines in the wake of the closure of the country’s largest maritime commercial gateway.
“We continue to see a hangover effect,” he admitted.
Ms Robinson sought to reassure analysts despite a third year-on-year decline in revenue from container shipping – the largest category in rail transport, slightly larger than oil and grain.
“We think this is a temporary problem,” Robinson argued, acknowledging that any increase in container traffic from B.C. ports could be gradual.
On Tuesday, Canadian National reported a profit of $1.11 billion for its quarter ended September 30, which compared with a profit of $1.46 billion in the third quarter of last year.
Canadian National (CN) revenues fell 12% to $3.99 billion from $4.51 billion a year earlier.
On an adjusted basis, earnings fell 21% to $1.69 per share from $2.13 per share a year ago. Analysts had expected adjusted profit per share of $1.72, according to forecasts collected by financial data firm Refinitiv.
CN still expects full-year profit to be stable or slightly down compared to last year, and is banking on growth of between 10% and 15% between 2024 and 2026.