The Canadian National Railway Co (CN) has released its financial and operating results for the fourth quarter and full year ended December 31, 2025. Despite a challenging economic environment, CN has demonstrated solid financial performance, driven by rigorous cost management, disciplined capital allocation, and a focus on operational efficiency. This report delves into the company's key financial metrics, revenue performance across segments, significant developments, and future stock prospects based on recent earnings.
Canadian National Railway Co Earnings Summary
In the fourth quarter of 2025, CN reported a notable increase in earnings thanks to improved operational efficiency and strategic cost management in the face of global uncertainties. The company achieved a 12% growth in diluted earnings per share (EPS), or 14% on an adjusted basis, demonstrating robust financial health despite a complex market environment characterized by geopolitical tensions and fluctuating demand.
Financial Results Overview
Key Financial Metrics
Here’s a snapshot of CN’s key financial performance indicators for the fourth quarter and full year of 2025:
| Financial Metric | Q4 2025 | Q4 2024 | % Change (YoY) | Full Year 2025 | Full Year 2024 | % Change (YoY) |
|---|---|---|---|---|---|---|
| Total Revenues (C$ million) | 4,464 | 4,358 | 2% | 17,304 | 17,046 | 2% |
| Operating Income (C$ million) | 1,733 | 1,628 | 6% | 6,587 | 6,247 | 5% |
| Net Income (C$ million) | 1,248 | 1,146 | 9% | 4,720 | 4,448 | 6% |
| Diluted EPS (C$) | 2.03 | 1.82 | 12% | 7.57 | 7.02 | 8% |
| Operating Ratio (%) | 61.2 | 62.6 | -1.4 pts | 61.9 | 63.4 | -1.5 pts |
CN’s operating ratio—a key measure of efficiency reflecting the proportion of revenues used to cover operating costs—improved by 1.4 points in Q4 2025, reaching 61.2%. A lower operating ratio indicates better efficiency in covering operational costs relative to revenue.
Revenue Breakdown
To comprehend CN's revenue dynamics across different business segments, let’s examine the segment-wise revenue performance:
| Revenue Segment | Fourth Quarter 2025 (C$ million) | Year-Over-Year Growth (%) |
|---|---|---|
| Grain and Fertilizers | 560 | -3% |
| Metals and Minerals | 470 | 8% |
| Forest Products | 615 | 2% |
| Coal | 250 | 6% |
| Petroleum and Chemicals | 756 | 5% |
| Automotive | 491 | 4% |
| Intermodal | 1,022 | 2% |
| Total | 4,464 | 2% |
Segment Analysis : The company's Petroleum and Chemicals segment saw significant growth due to increased demand for energy transport, while Metals and Minerals benefited from higher industrial activity. The Grain and Fertilizers segment faced slight declines caused by variable crop yields and market prices. Intermodal operations, crucial for integrating multiple transportation modes, remained an essential revenue driver with a steady 2% increase.
Key Developments in Q4
The quarter saw CN making strategic enhancements to its operations, including: - Share Repurchases : CN repurchased approximately 4.4 million shares in Q4, amounting to C$600 million, as part of a broader repurchase plan totaling over C$2 billion for the year. - Operational Efficiency : Through dwell time (the time cargo spends in rail terminals) decreased by 1%, aligning with the broader improvements in car velocity and train length, which rose by 2% and 3% respectively. - Fuel Efficiency Improvements : Fuel efficiency in terms of locomotive fuel consumption per 1,000 gross ton-miles improved by 1%, showcasing CN's commitment to sustainability.
Executives' Remarks
Tracy Robinson, CN’s President and CEO, praised the team’s commitment amid challenging market conditions, emphasizing the company's ongoing focus on cost control, productivity, and disciplined capital allocation. Robinson noted, “In this challenging demand environment, their focus on service, cost control, and productivity drove solid performance. As we enter 2026, we expect continued macroeconomic uncertainty and elevated geopolitical risk. This approach positions CN to respond quickly as volumes shift and to deliver sustainable long-term value for shareholders.”
Dividends and Share Repurchase Strategy
CN has maintained a robust shareholder return strategy, announcing a 3% increase in its 2026 quarterly cash dividend—the 30th consecutive year of dividend increments. Furthermore, the board has approved a new Normal Course Issuer Bid (NCIB) allowing for the repurchase of up to 24 million shares over the next year, underlining confidence in long-term financial health and commitment to shareholder value.
Stock Forecast
Given CN’s strong performance trajectory, resilient operational metrics, and disciplined financial strategies, the outlook for its stock remains optimistic. With a current market cap of nearly C$75 billion and a last price adjustment indicative of solid market confidence, projections suggest a stock price range between C$2.70 - C$2.80 in upcoming quarters, factoring in macroeconomic conditions and operational headwinds.
In summary, CN’s focused operational approach, alongside strategic shareholder return initiatives, poises it well amidst economic uncertainties. The company's ongoing efforts in refining operational efficiency and firm capital management strategies are likely to continue driving shareholder value throughout 2026 and beyond.
