(The Canadian Press circulated the following by Ross Marowits on April 22.)
MONTREAL — Spring hasn’t come fast enough for Canada’s largest railway after harsh winter conditions helped to put the brakes on CN Rail’s first-quarter profits as earnings fell four per cent to $311 million.
In light of the weak first quarter and some soft markets, the railway also lowered its 2008 diluted earnings per share forecast to the “mid-single digit” range over 2007 earnings per share of $3.40. That’s down from an earlier forecast of “mid-to-high” single digit growth. Revenues should grow at between six and eight per cent, the Montreal-based railway said.
CN Rail said it earned 64 cents a share in the quarter ended March 31, compared with earnings of $324 million, or 63 cents a share, a year earlier.
Analysts had reduced their financial expectations in the quarter ended March 31. A revised consensus of 11 analysts surveyed by Thomson Financial lowered the average earnings per share to 62 cents, one cent below 2007. That’s several cents lower than an earlier assessment.
CN said its results were hurt by a severe winter in many parts of North America, high fuel costs, a strong Canadian dollar and slumping American economy.
Revenues increased one per cent to $1.9 billion. Most of the rail company’s businesses experienced strong growth, but forest products fell 20 per cent and auto shipments dropped 11 per cent.
“Thank God it’s spring time,” chief executive Hunter Harrison said during a conference call , after noting that extreme cold and snow affected the entire system this winter.
In January, CN took the unprecedented stop of suspending most operations in the West for almost two days to ensure the safety of employees.
“Clearly, I thought last year was a bad winter. This year went far beyond.”