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A Canadian National Railway locomotive pulls a train in Montreal, Quebec, Canada. (Christinne Muschi/Bloomberg News)

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is sticking with its outlook for double-digit profit growth over the next few years, shrugging off a 2023 marred by labor strife, low grain shipments and a sluggish economy.

The rail operator expects earnings per share to grow around 10% in 2024 on an adjusted basis, hovering at the lower end of its 10% to 15% longer-term target. The company expects to boost freight volumes and raise prices more than the industry average, “all of which assumes a supportive economy,” it said in a statement Jan. 23.

Canadian National posted earnings of C$2.02 per share for the fourth quarter, slightly beating analysts’ expectations for C$1.99.

“We came into the fourth quarter a little battle-hardened after a couple of difficult quarters last year where we managed through a freight recession and a number of external shocks,” CEO told analysts. “And in Q4, we had the gift of some kinder weather, and our operations team took full advantage.”

The quarter marked an improvement from earlier periods, when Montreal-based Canadian National cited falling consumer goods demand and strikes at west coast ports as factors behind its disappointing numbers.

For the full year, the railway’s revenue and adjusted earnings per share fell about 2% from 2022.

“Collectively, results were modestly better, and the guide is basically in line with consensus,” said Citigroup Inc. analyst in a note after the results. “Given generally cautious sentiment, we’d expect a modestly positive share price reaction.”

CN Rail raised its quarterly dividend by 7% — its 28th straight year of increasing its payout to shareholders.

Leading up to the results, analysts including Desjardins Securities’ said the Red Sea conflict and Panama Canal drought had the potential to bring more goods to North American ports, as ships look for alternate routes. While it’s uncertain how long the disruptions will last, Poirier is forecasting that intermodal volumes for Canadian National will grow 5% in 2024.

“Canadian National’s initial adjusted EPS guidance for a 10% gain in 2024 appears conservative, assuming North American economies can avoid a recession and its network doesn’t contend with any prolonged severe weather,” Bloomberg Intelligence analysts and Aanchal Aich said. “To reach its goal, management expects volume to expand by mid-single digits, offset inflation with pricing and improve its operating ratio from 60.8% in 2023. The company will likely generate strong incremental margin, particularly in its merchandise network, where there’s available capacity.”

Canadian National Railway ranks No. 31 on the Transport Topics Top 50 list of the largest global freight companies.