Canadian National Railway (NYSE:CNI) executives highlighted improved operating performance, solid earnings growth, and a more cautious, volume-linked approach to 2026 guidance as the company reported fourth-quarter and full-year 2025 results against what management repeatedly described as a volatile macro environment marked by tariff and trade uncertainty.
Fourth-quarter results: EPS growth and improved operating ratio
CEO Tracy Robinson said CN closed 2025 with “solid momentum,” citing strong execution, reliable service, and ongoing cost and asset discipline. CN reported 14% EPS growth in the fourth quarter and 7% for the full year, which Robinson said was in line with the company’s mid- to high-single-digit guidance.
CFO Ghislain Houle said reported diluted EPS grew 12% year-over-year in Q4, while adjusted EPS rose 14%. He attributed the adjusted results to two notable items: a CAD 34 million pre-tax charge related to a workforce reduction program discussed on the prior quarter’s call and CAD 15 million in advisory fees tied to industry consolidation matters.
Operating performance: records in safety, grain, and fuel efficiency
Chief Operating Officer Pat Whitehead said CN delivered its best Injury Frequency Ratio in company history in both Q4 and the full year. He described safety as foundational to performance, enabling CN to “take on more work and deliver for our customers.”
Whitehead said workload increased 5% year-over-year in the quarter, supported in part by grain demand. CN carried record grain tonnage from Western Canada for four consecutive months while maintaining merchandise service, with local service commitment performance “well above 90%.” He noted that winter conditions in December required shorter train lengths for the full month, yet car velocity improved 2% and dwell declined 1% year-over-year in the quarter.
CN also cited productivity improvements across labor and assets. Whitehead said train and engine (T&E) productivity improved 14% in Q4 year-over-year. CN entered the quarter with about 800 furloughs and exited with roughly 650, selectively adding resources for grain and winter readiness. Locomotive productivity improved 5% year-over-year in Q4, with about 10% of the fleet stored on average, while locomotive availability reached an all-time high of 92.5%. He said those changes helped reduce mechanical inventory by CAD 20 million, or 14%, year-over-year for the full year. CN also posted a fourth-quarter record in fuel efficiency, improving nearly 1% year-over-year.
Commercial trends: intermodal and grain strength offset by tariff-pressured markets
Chief Commercial Officer Janet Drysdale said CN delivered 4% more revenue ton miles (RTMs) and 3% more carloads in Q4, producing 2% revenue growth in what she called a challenging market. She said growth was supported by share gains and customer execution, though comparisons were helped by lapping prior-year disruptions.
Drysdale detailed segment trends in the quarter:
- Intermodal: International and domestic revenues rose 13% and 6%, respectively. International strength at Vancouver and Prince Rupert was aided by a favorable comparison against last year’s port labor disruption. Prince Rupert also benefited from volume gains related to the “Gemini” service. Drysdale said domestic intermodal continued to see service-related gains.
- Grain: CN set an all-time annual record in 2025 for Western Canadian grain shipments, with monthly records in October, November, and December.
- Petroleum and Chemicals: Growth occurred across segments, led by a 9% increase in natural gas liquids volumes, driven by strong domestic demand and export strength through Prince Rupert.
- Forest Products: Drysdale said the segment remained under pressure due to weak demand and increased tariffs and duties.
- Metals and Minerals: Lower iron ore shipments reflected weak fundamentals, a mine closure in late Q1 2024, and unplanned outages. Frac sand volumes were also impacted by slower drilling activity amid high Canadian natural gas inventories.
Drysdale said CN continued to generate “same-store price ahead of our rail cost inflation,” but also flagged headwinds including negative mix and a roughly CAD 70 million impact tied to the repeal of the Canadian carbon tax. She added that tariffs, trade uncertainty, and volatility reduced full-year 2025 revenues by more than CAD 350 million.
Capital allocation and 2026 outlook: flattish volumes, EPS slightly ahead of volumes
Management framed 2026 guidance as directional and tied closely to volume trends, citing elevated uncertainty around the macro outlook, tariffs, and the upcoming U.S.-Mexico-Canada Agreement (USMCA) review. Robinson said CN’s base case assumes current tariff levels remain in place and that volumes will be “flattish with 2025.” On that basis, CN expects EPS growth to “slightly exceed volume growth,” with free cash flow continuing to grow.
Houle said CN’s 2026 plan assumes RTMs are roughly flat year-over-year, with foreign exchange neutralized at the 2025 average rate of 71.5 cents. He reiterated CN’s FX sensitivity of about 5 cents of EPS per one-cent move and noted that at current spot levels, FX would represent about a 10-cent EPS headwind.
CN set 2026 capital spending at CAD 2.8 billion, down CAD 500 million from 2025, which Houle said should improve cash conversion. He also outlined margin headwinds for 2026, including continued unfavorable mix (less forest products and metals), lower capital credits due to a smaller capital program, a higher effective tax rate (25%–26%), and the absence of certain “other income” gains realized in 2025.
On shareholder returns, Houle said CN repurchased nearly 15 million shares in 2025 for around CAD 2 billion and noted the board approved a 3% dividend increase, marking the 30th consecutive year of dividend growth. The board also authorized a new buyback program for up to 24 million common shares from February 4, 2026 to February 3, 2027. Management said CN will temporarily step up leverage to about 2.7x to support share repurchases, with plans to return to 2.5x in 2027.
In closing remarks, Robinson announced that Stacy Alderson, head of investor relations, will retire on May 1 and that Jamie Lockwood will become Vice President of Investor Relations and Special Projects. Robinson also reiterated CN’s focus on disciplined execution and productivity gains, while acknowledging that tariff-driven pressure in forest products and metals, along with broader uncertainty, continues to weigh on near-term visibility.
About Canadian National Railway (NYSE:CNI)
Canadian National Railway Company (NYSE: CNI) is a Class I freight railway that operates an integrated rail network across Canada and the United States. Headquartered in Montreal, Quebec, CN provides long-haul freight transportation and related logistics services that connect major ports, industrial centers and inland markets throughout North America. Its transcontinental system enables cross-border movement of goods and supports supply chains that span coast-to-coast in Canada and into the central and eastern United States.
CN’s core business is the railborne transportation of a broad mix of commodities, including intermodal container traffic, forest and paper products, grain and other agricultural products, metallurgical and industrial products, petroleum and chemical products, coal and automotive shipments.
