Canadian National Stock Slips More Than 2% On Labor Row
Zacks Investment Research | Nov 20, 2019 10:15PM ET
Canadian National Railway Company (NYSE:CNI) is embroiled in a labor strife that involves more than 3000 conductors, trainpersons and yard workers, represented by Canada's Teamsters labor union. The employees agitating over safety issues, working conditions and benefits, have been staging walkouts since Nov 19 while the federal government is negotiating talks between the two parties for a mutual agreement. With this ongoing turbulence, shares of the company have dipped more than 2% since Nov 19.
Labor Conflict Amid Soft Freight Volumes
The labor dispute happens at a time when the company is already under significant pressure due to low freight volumes amid slowdown in the global economy. While trade-related uncertainty is affecting international intermodal volumes, weakness in the manufacturing sector is impacting domestic intermodal volumes.
In fact, declining North American rail demand forced the company to lower its 2019 earnings outlook. It now anticipates adjusted earnings per share to grow in high single-digit range compared with a rise in the low double-digit band expected previously. Moreover, revenue ton miles (RTMs) are expected to witness slightly negative volume growth in the current year compared with the earlier prediction of a mid-single-digit volume expansion.
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