CN Rail profit dips amid supply chain snarls, fewer grain exports

CN Rail cut its outlook for profit growth and cash flow for 2022, saying it expects costs to be significantly higher than it previously forecast as the price of fuel soars.

Canadian National Railway Co. cut its outlook for profit growth and cash flow for 2022, saying it expects costs to be significantly higher than it previously forecast as the price of fuel soars. 

The country’s largest railway said Tuesday it now projects earnings per share growth of 15 per cent to 20 per cent on an adjusted basis; the previous target was 20 per cent. Canadian National’s new outlook for operating ratio -- a key measure of costs as a percentage of revenue -- is 60 per cent, up from 57 per cent.

The Montreal-based company said operating expenses increased 12 per cent in the first quarter, partly because of the spike in fuel prices triggered by Russia’s war in Ukraine. The railway reported adjusted earnings of $1.32, up 7 per cent. Analysts expected $1.38. Revenue was slightly better than estimates. 

“Looking ahead, our immediate focus is on restoring CN’s network to its full capacity and running a scheduled railroad with an emphasis on velocity,” new Chief Executive Officer Tracy Robinson said in a statement. “I am confident that we will have a strong year and deliver on our 2022 financial outlook.”

Robinson took the helm of the railroad at the end of February, making her one of the most prominent female executives in corporate Canada and the first woman to run one of its two major railways.