Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

CN Rail's revenue fell by 6 per cent to $3.6-billion from $3.8-billion in the same quarter a year ago.

Stephen C. Host/The Canadian Press

Canadian National Railway Co.’s profit fell by 22 per cent in the fourth quarter, as an eight-day strike, weak freight demand and trade tensions reduced cargo volumes at Canada’s largest rail carrier.

CN said it made a profit of $873-million, or $1.22 a share, in the three months ending Dec. 31, compared with $1.1-billion ($1.56) in the same period a year earlier. Revenue fell by 6 per cent to $3.6-billion from $3.8-billion in the same quarter a year ago. For the full year of 2019, Montreal-based CN said revenue rose by 4 per cent to $14.9-billion from 2018.

Profit declined to $4.2-billion from $4.3-billion in 2018. Diluted earnings per share fell by 1 per cent to $5.83. CN’s operating ratio, a measure of costs versus sales, deteriorated by 4.1 percentage points to 66 per cent.

Story continues below advertisement

CN posted declines in revenue from all freight categories except shipping containers. In a statement accompanying the after-markets release of its financial results, CN said its “strong balance sheet provides us with the flexibility and resiliency required in the current turbulent economic environment.”

U.S. economic growth slowed sharply early in 2019 and posted gains of just 2 per cent and 2.1 per cent in the second and third quarters, respectively, according to the U.S. Bureau of Economic Analysis. (The third-quarter figure is an estimate.)

U.S. factory production slumped in the latter half of 2019, dampened by escalating tariff disputes and a six-week strike at General Motors Co.

In Canada, gross domestic product rose by 1.3 per cent in the third quarter, compared with the same period a year earlier.

A strike by 3,200 CN conductors and yard workers brought to a standstill most traffic on CN’s Canadian network, forcing shippers of potash, chemicals and other goods to halt production. Operations resumed on Nov. 26, after the company and Teamsters Canada Rail Conference negotiators reached a tentative agreement.

CN slashed its 2019 earnings guidance because of the shutdown, forecasting profit growth of low to mid-single digits, compared with 2018. “We have growth opportunities that we anticipate will translate into low single-digit volume growth in 2020 in terms of revenue ton miles (RTMs), despite continued weakness in the broad freight environment,” said JJ Ruest, CN’s chief executive officer.

The cut was disappointing but understandable, said Jeff Windau, an Edward Jones stock analyst. “We anticipate the near-term performance [of CN] will continue to be mixed as the company works to offset trade uncertainty and pressure on volumes with improving operating performance,” Mr. Windau said in a research note.

Story continues below advertisement

CN’s share price has risen by 11 per cent on the Toronto Stock Exchange in the past 12 months, compared with an increase of 14 per cent on the TSX composite index. Rival Canadian Pacific Railway Ltd., which reports financial results on Wednesday morning, has seen its share price climb by about 26 per cent on the Toronto market.

Benoît Poirier, an analyst at Desjardins Group Inc., said economic conditions continue to deteriorate for the big railways, but the stock market is demonstrating confidence the new China-U.S. trade agreement will buoy factories in the United States. Mr. Poirier said he expects cost-cutting at both Canadian railways will offset softer freight volumes.

In response to slipping demand for rail services, CN in the fall embarked on layoffs that are expected to reduce its work force by about 1,600.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies