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(Bloomberg) — Canadian National Railway Co. cut its earning outlook for 2023 because of weakening demand for consumer goods and other products, another clear signal that the economy is slowing.

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The railway expects earnings per share will be flat or slightly down this year compared with 2022. In April, it said expected to grow by mid-single digits, in percentage terms

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“We’re now assuming that the economic recovery is pushed into 2024,” Chief Executive Officer Tracy Robinson told analysts. The shares dipped in after-hours trading in New York. 

The Montreal-based company reported revenue of C$4.06 billion ($3.1 billion) in the second quarter, down 7% and missing analysts’ estimates. Earnings fell 9% on an adjusted basis to C$1.76 per share, or 4 cents below the consensus of analysts surveyed by Bloomberg. 

Revenue from intermodal shipments plunged 26% from a year earlier, more than offsetting gains in other categories such as grain, fertilizer and automotive. “The second quarter has been a tough one,” Chief Operating Officer Ed Harris said.

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Weather was another factor. Wildfires have raged across Canada this year, scorching an area larger than Ohio and disrupting shipments such as forest products. Heat waves also forced trains to run slower. 

“This team has dealt with a number of extreme weather related issues over this past few months, as well as a West Coast port strike over the last few weeks,” Robinson added. 

Canadian National’s operating ratio, a key gauge of efficiency that measures expenses as a percentage of revenues, increased to 60.6%, just above the company’s 60% target.

CN shares are trading at the “largest discount” ever to rival Canadian Pacific Kansas City Ltd. based on 2024 earnings estimates, RBC Capital Markets analyst Walter Spracklin said in a report before the earnings were released. 

(Updates with additional information beginning in the fifth paragraph)