CN Rail Navigates Headwinds to Post Solid Q4 Gains, Eyes Uncertain Trade Future
MONTREAL — Canadian National Railway Co. capped off a challenging 2025 with a resilient fourth-quarter performance, posting gains across key financial and operational metrics as efficiency initiatives helped offset persistent trade-related pressures.
The Montreal-based railway announced Thursday that its Q4 revenue reached $3.3 billion (USD), a 2% increase from the same period in 2024. More notably, operating income rose 6% to $1.28 billion, while adjusted net income jumped 12% to $940 million. The results were buoyed by a favorable comparison to a Q4 2024 that was marred by work stoppages at key Canadian ports, which severely disrupted international intermodal traffic.
"Our teams maintained a relentless focus on productivity and commercial discipline," said CEO Tracy Robinson. "These actions not only helped us navigate a tough economic environment but have positioned us strongly for when broader industrial volumes recover."
Operational improvements were evident. The railway's adjusted operating ratio—a key measure of efficiency where a lower number is better—tightened by 2.5 points to 60.1%. Train length grew by 3% to an average of 7,868 feet, and the company moved 5% more gross ton-miles despite what Chief Operating Officer Patrick Whitehead described as "a full month of winter constraints."
Yet, significant headwinds remain. Chief Commercial Officer Janet Drysdale noted that U.S. tariffs, particularly on forest products, steel, and aluminum, had an estimated impact exceeding $350 million in 2025. The broader uncertainty surrounding the ongoing review of the United States-Mexico-Canada Agreement (USMCA) is causing customers to hesitate on investment, a situation Robinson called the "biggest risk."
"There's investment sitting on the sidelines," Robinson explained during the earnings call. "Our customers are wondering under what rules they'll be investing in the future... I'm not equipped to tell you what to expect on where it will land." This uncertainty led the company to provide only general "flattish" volume guidance for 2026.
For the full year 2025, CN reported revenue of $12.76 billion, a 2% increase. Capital spending for 2026 is planned at $2.07 billion, a reduction from the previous year, which Robinson attributed to recent major capacity additions in the Vancouver corridor and around Chicago.
Industry Voices React
Michael Thorne, Transport Analyst at Laurentian Capital: "CN's efficiency gains are impressive and demonstrate a well-executed operational playbook. The improved operating ratio in a soft volume environment is the real story here. However, their cautious guidance underscores that railways remain hostages to macro trade policies beyond their control."
Sarah Chen, Portfolio Manager at Prairie Growth Funds: "The market should welcome the disciplined capital expenditure plan and the progress on modernizing the locomotive fleet. CN is building a leaner, more resilient network. The tariff overhang is a known quantity; the unknown is how the USMCA review resolves. That's the 2026 wildcard."
David Forsythe, Former Rail Union Official & Commentator: "Stop sugar-coating it. A 2% revenue growth is anaemic. They're cutting capital spending by hundreds of millions while bragging about being 'poised.' This looks like preparation for stagnation, not growth. They're managing for margins today at the expense of network capacity tomorrow, and the workforce will feel that pinch."
Louise Tremblay, Supply Chain Professor at McGill University: "CN's performance is a microcosm of the Canadian economy—efficiently managing what's within its borders while nervously eyeing Washington. The dwell time and velocity metrics show they can control their network. The tariff figures show how much they can't control their destiny."