CN Refines Outlook After Labor Disruptions, Operations Back on Track
CN has come through a tough stretch marked by labor disruptions in Canada and is now resetting its plans. With the immediate challenges behind it, the company is updating how it runs day to day and how it sees the rest of the year shaping up financially.
Operations Recovered Quickly
CN’s operational rebound followed a clear, step-by-step plan during and after the labor stoppage. That structure helped crews and customers return to normal patterns faster than expected, clearing backlogs and slotting trains back into a steady rhythm. Car velocity and train speed—two core measures of network health—are back at target levels, which means CN is again matching service to demand with consistency.
The Route to Better Performance
The path forward leans on two levers: moving more volume and running more efficiently. CN is refining its scheduled operating plan and using it to open the door to growth that fits current market conditions. The aim is straightforward: stay disciplined on costs and service while taking on new, sustainable business where the network can handle it.
Revised Financial Guidance for 2024
Given the disruptions, CN has adjusted its financial view for 2024. The shadow of labor uncertainty—and environmental challenges such as wildfires—prompted a reset of earlier expectations so guidance reflects what the company sees on the ground.
Adjusted Earnings Outlook
CN had been targeting mid to high single-digit growth in adjusted diluted EPS. It now expects growth in the low single-digit range for 2024. Even with that shift, the company is holding to its plan to invest approximately C$3.5 billion in its capital program, keeping money flowing to track, equipment, technology, and other long-lived assets that support reliable service.
Looking Ahead: 2024–2026 Assumptions
CN still anticipates a high single-digit compounded annual growth rate in adjusted diluted EPS over the 2024 to 2026 period. That outlook assumes a steady backdrop: stable North American industrial production and pricing that continues to outpace rail inflation. The focus remains on balancing disciplined operations with selective growth, so improvements stick.
Watching Markets and Inputs
Management continues to track energy and currency trends closely. CN’s planning assumes the Canadian dollar averages about $0.75 against the US dollar and crude oil prices land in the US$80 to US$90 per barrel range. Those inputs feed directly into operating costs and customer demand, so they’re central to how CN calibrates its strategy.
Why CN’s Network Matters
CN’s rail network is a backbone for trade across North America. It moves large volumes of natural resources and manufactured goods, tying producers, ports, and communities together. That connectivity supports growth and stability, helping local economies function day to day and recover when conditions turn.
Staying Aligned With Stakeholders
Reliable service is the promise, and CN is working to keep it. The company continues to invest in infrastructure and efficiency measures that improve consistency for customers and communities alike. The intent is long-term: run a safer, faster, more predictable railroad in a competitive market.
Frequently Asked Questions
What changes has CN made to its operating approach?
CN executed a structured recovery plan after labor disruptions, restoring car velocity and train speed to target levels. It’s also tuning its scheduled operating plan to support efficiency and selective growth.
How did the labor disruption influence CN’s 2024 guidance?
The disruption, together with environmental challenges like wildfires, led CN to lower its adjusted diluted EPS growth outlook for 2024 from mid to high single digits to the low single digits.
What is CN investing in right now?
CN plans to invest approximately C$3.5 billion in its 2024 capital program, funding track, rolling stock, technology, and other assets that underpin long-term service quality.
What is CN’s earnings outlook through 2026?
CN expects adjusted diluted EPS to grow at a high single-digit compounded annual rate from 2024 to 2026, assuming stable industrial production and pricing that outpaces rail inflation.
How does CN support the broader economy?
CN moves over 300 million tons of goods each year, strengthening trade across North America and supporting economic activity in the regions it serves.
