04:42 PM EDT, 07/23/2024 (MT Newswires) -- Canadian National Railway ( CNI ) was down 4% in after-hours New York trading after the company reported a weaker than expected second-quarter profit despite rising revenues and lowered its guidance.

The company said its adjusted earnings, which exclude most one-time items, rose 0.4% to $1.172 billion, or $1.84 per share, in the period, from $1.167 billion, or $1.76, in the year-prior quarter and below the consensus estimate for a $1.93 per share adjusted profit, according to Capital IQ.

Revenue rose 6.7% to $4.329 billion from $4.057 billion a year earlier but lagged the consensus forecast of $4.389 billion and $4,057 million.

The company's operating ratio, an efficiency measure where lower is better, rose to 64.0 from 60.6 a year earlier.

Accounting for second quarter results and the ongoing volume impact of the current labor uncertainty, CN said it now expects to deliver adjusted diluted EPS growth in the mid to high single-digit range down from its April forecast for a rise of about 10%.

CN also noted it and rival Canadian Pacific Kansas City ( CP ) (CP.TO, CP) face the possibility of labor unrest as they wait on the Canada Industrial Relations Board to rule on the federal labor minister's referral on maintenance of activities during a strike or lockout. Moves to initiate strikes earlier this year were paused pending such a ruling. Union members at both CN and CPKC railways have voted to reauthorize strikes at both companies if negotiated settlements can't be reached.

"Our team of railroaders has continued to deliver outstanding service to our customers despite some transient challenges on a key portion of our Western Region that impacted our costs, and traffic diversions due to ongoing labor uncertainty," chief executive Tracy Robinson said in a release.

The company continues to expect to invest approximately $3.5 billion in its capital program, net of amounts reimbursed by customers. But it now expects adjusted return on invested capital to be approximately 15%, compared to its April expectation to be within the targeted range of 15%-17%.

CN shares were last seen down US$3.98 to US$115.20 after hours. They closed down $2.59 to $165.35 on the Toronto Stock Exchange.