Canadian National Railway (CNR) cut its outlook for profit growth this year, saying it expects
costs to be significantly higher than previously forecast due to rising fuel prices.
The country’s largest railway said it now projects earnings per share (EPS) growth of 15% to
20% for 2022. Its previous target was 20%.
The Montreal-based company said operating expenses increased 12% in the first quarter, partly
because of the rise in fuel prices triggered by Russia’s invasion of Ukraine.
The railway reported adjusted earnings per share (EPS) of $1.32 in the first quarter, which was
lower than the $1.38 expected by analysts.
CN Rail said that supply-chain bottlenecks are hampering transport and driving up costs around
the world, while China’s COVID-19 lockdowns and the Ukraine war are adding to the logistical
challenges of transporting commodities.
The railway also trimmed its guidance for free cash flow, saying it could come in as low as $3.7
billion this year versus a previous target of $4 billion.
Volume for most North American railroads was lower in the first quarter of the year due to
severe weather, supply chain disruptions and a two-day labor stoppage at Canadian Pacific
Railway (CP), according to industry data.
Year to date, CN Rail’s stock is up 1% at $156.87 per share.
