“Our team delivered a strong performance this quarter through tight cost control and disciplined adherence to our plan, mitigating the impact of winter conditions,” CN President and CEO Tracy Robinson said in a first-quarter 2025 report. The railroad had 8% diluted EPS growth on a 1% increase in RTMs (revenue ton miles). While its full-year guidance and 2024-2026 financial outlook remain unchanged, the Canadian Class I noted that “there is a heightened recessionary risk related to tariffs and trade actions taken by various countries.”
“In the context of a volatile macroeconomic and geopolitical environment, we will remain focused on agility and customer collaboration,” Robinson said on May 1. “We are committed to continue driving operational and service excellence across our network in 2025 to deliver for our customers and shareholders.”
Among CN’s first-quarter 2025 highlights:
- RTMs rose 1% to 60.049 billion from first-quarter 2024’s 59.749 billion.
- Revenues of C$4.403 billion were up C$154 million, or 4%, from first-quarter 2024’s C$4.249 billion. The railroad reported “solid underlying demand.” For the three-months ending March 31, 2025, the “year-over-year fuel surcharge headwind [of C$0.05 was] mostly offset by exchange tailwind”; there were ‘no meaningful changes in flows related to tariffs”; there were “strong Bulk movements, apart from potash”; Merchandise and Intermodal shipments were “hampered by train length restrictions”; and there were “production issues and weak demand for iron ore.”
- Operating income of C$1.610 billion was up C$64 million, or 4%, from first-quarter 2024’s C$1.546 billion.
- Operating ratio, defined as operating expenses as a percentage of revenues, came in at 63.4%, an improvement of 0.2 points from the same point in 2024 (63.6%).
- Diluted earnings per share (EPS) of C$1.85 was up 8% from C$1.72 in 2024.
CN reported that its first-quarter 2025 operating metrics reflected a “more normal winter.” Train length restrictions due to “extreme cold constrained car velocity and network fluidity.” Car velocity came in at 189 car miles per day, down 8% from first-quarter 2024’s 205. Through dwell on the entire railroad was 7.8 hours, up 10% from first-quarter 2024’s 7.1 hours. CN’s local service commitment, defined as the percentage of cars that successfully completed their Daily Operating Plan, was 90% in first-quarter 2025, down 2% from the prior-year period’s 92%.
2025 Outlook
Looking ahead, CN said it continues to expect adjusted diluted EPS growth of 10%-15% in 2025 compared with 2024, with a volume assumption of “low to mid single-digit RTM growth, including slight economic growth.” The railroad plans to invest approximately C$3.4 billion in its capital program, net of the amounts reimbursed by customers. Additionally, over the 2024-2026 period, CN said it continues to target compounded annual adjusted diluted EPS growth in the “high single-digit range.”
For more on CN’s outlook, read Tracy Robinson’s special report on “Building for Growth: CN’s Commitment to a Stronger, More Resilient Supply Chain,” which she submitted as part of Railway Age’s annual CEO Perspective series.
For more financial details, visit the CN Investors website.
Further Reading:
- Officially Merged: CN and IANR
- The State of the Rails – CN Back from the Brink; PSR Recoverability
- For CN, ‘Good Momentum as 2025 Begins’
- CN Receives Arbitration Decision
- Port of Montreal Activities ‘Back to Normal’
- Canadian Minister of Labor Intervenes in Port Disputes
- CN, KLW Partner on Hybrid Locomotive
- STB Green-Lights CN IANR Acquisition
- CN, IBEW Reach Tentative Agreement
- CN, Unifor Ratify Collective Agreements
