Canadian National Railway Company (CNR) Q3 2025 earnings summary

Executive summary

• Achieved 6% EPS growth and improved operating ratio to 61.4% year-over-year, driven by disciplined service, cost control, and productivity gains, despite macroeconomic and tariff headwinds.

• Revenues rose 1% to $4.2 billion, with net income up 5% to $1,139 million and operating income up 6% to $1.6 billion.

• Free cash flow for the first nine months increased 14% to $2.34 billion, with operating cash flow up 3% year-over-year.

• Repurchased nearly 8 million shares for over $1 billion in Q3, with a continued commitment to return excess capital to shareholders.

• Productivity initiatives included $75 million in labor cost reductions and improved fuel efficiency by 2%.

Financial highlights

• Q3 EPS of $1.83, up 6% from last year; revenues up 1% year-over-year on 1% higher RTMs and 5% higher carloads.

• Operating ratio improved to 61.4% from 63.1% year-over-year; operating income grew 6% to $1.6 billion.

• Free cash flow up 14% year-to-date, exceeding $2.3 billion through September.

• Labor expense up 2% due to higher incentive compensation and wage inflation, offset by a 5% reduction in headcount.

• Fuel expense down 20% year-over-year, driven by elimination of the Canadian Federal Carbon Tax and improved fuel efficiency.

Outlook and guidance

• Maintains 2025 guidance for mid- to high-single-digit adjusted diluted EPS growth, with 2026 capital expenditures set at $2.8 billion, down nearly $600 million from 2025.

• Expects low single-digit RTM growth and slightly positive North American industrial production in 2025.

• Full-year 2026 guidance to be provided with Q4 results.

• Focus remains on cost discipline, productivity, and maximizing free cash flow.