C Nto Report Second- Quarter 2025 Financialand Operating Results Today

Published in Business and Finance on Tuesday, July 22nd 2025 at 9:42 GMT by Toronto Star
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MONTREAL, July 22, 2025 (GLOBE NEWSWIRE) -- CN (TSX: CNR) (NYSE: CNI) will issue its second-quarter 2025 financial and operating results after the market close.

CN Reports Strong Second-Quarter 2025 Financial and Operating Results Amid Economic Headwinds

Montreal, July 23, 2025 – Canadian National Railway Company (CN), one of North America's leading transportation and logistics providers, today released its financial and operating results for the second quarter of 2025, showcasing resilience in a challenging economic landscape marked by fluctuating commodity prices, supply chain disruptions, and shifting trade dynamics. The Montreal-based company, which operates an extensive rail network spanning Canada and the United States, reported adjusted diluted earnings per share (EPS) of $1.95, surpassing analyst expectations and reflecting a 5% increase from the same period in 2024. This performance underscores CN's strategic focus on operational efficiency, cost management, and targeted investments in infrastructure and technology.

In a conference call with investors and analysts this morning, CN's President and Chief Executive Officer, Tracy Robinson, highlighted the company's ability to navigate ongoing global uncertainties. "Despite headwinds from softer demand in certain sectors and persistent inflationary pressures, our team delivered solid results through disciplined execution and a relentless commitment to safety and service reliability," Robinson stated. She emphasized that CN's diversified portfolio, which includes intermodal, grain, forest products, and automotive shipments, provided a buffer against volatility in any single market.

Financially, CN posted revenues of $4.5 billion for the quarter ended June 30, 2025, representing a 3% year-over-year growth. This uptick was driven primarily by higher volumes in intermodal and grain shipments, which benefited from robust export demand and favorable weather conditions in key agricultural regions. Intermodal revenues, a cornerstone of CN's business, climbed 7% to $1.2 billion, fueled by increased container traffic through major ports like Vancouver and Halifax, as well as stronger e-commerce-related movements across the U.S. Midwest. Grain and fertilizers saw a 4% revenue increase to $850 million, supported by a bumper crop season in the Canadian Prairies and steady demand from international markets.

However, not all segments performed equally. Revenues from forest products dipped 2% to $600 million, attributed to subdued housing starts in North America and competitive pressures from alternative transportation modes. Similarly, the automotive sector experienced a slight decline, with revenues falling 1% to $400 million, amid ongoing semiconductor shortages and a slowdown in vehicle production. Petroleum and chemicals, another key area, grew modestly by 3% to $750 million, helped by stable crude oil shipments despite fluctuating energy prices.

On the operating side, CN reported an operating ratio of 59.5%, an improvement of 1.2 percentage points from the previous year. This metric, which measures operating expenses as a percentage of revenue, reflects the company's ongoing efforts to streamline operations and reduce costs. Key contributors to this efficiency included the implementation of precision scheduled railroading (PSR) principles, which have enhanced train velocity and asset utilization. CN's average train speed increased to 22.5 miles per hour, up from 21.8 mph in Q2 2024, while terminal dwell time decreased by 5%, indicating smoother operations at major hubs.

Safety remains a top priority for CN, with the company reporting a 10% reduction in its personal injury frequency rate compared to the prior year. This achievement comes on the heels of significant investments in employee training, advanced signaling systems, and predictive maintenance technologies. Robinson noted that CN's safety initiatives not only protect its workforce but also contribute to overall network reliability, which is crucial for customer satisfaction and long-term growth.

Looking deeper into the numbers, CN's net income for the quarter stood at $1.1 billion, or $1.92 per diluted share on a reported basis, compared to $1.05 billion, or $1.82 per share, in Q2 2024. The adjusted net income, which excludes one-time items such as restructuring charges and gains from asset sales, was $1.15 billion. Free cash flow generation was robust at $900 million, bolstered by higher operating cash flows and prudent capital allocation. The company invested $850 million in capital expenditures during the quarter, focusing on track maintenance, locomotive upgrades, and digital enhancements like AI-driven predictive analytics for freight routing.

CN's balance sheet remains strong, with a debt-to-EBITDA ratio of 2.1 times, providing ample flexibility for future investments and shareholder returns. The Board of Directors declared a quarterly dividend of $0.85 per share, payable on September 30, 2025, to shareholders of record as of September 9, 2025. This represents a 6% increase from the previous dividend, signaling confidence in the company's cash flow outlook. Additionally, CN announced an extension of its share repurchase program, authorizing the buyback of up to $2 billion in common shares over the next 12 months, subject to market conditions.

In terms of forward guidance, CN provided an optimistic yet cautious outlook for the full year 2025. The company expects adjusted diluted EPS to range between $7.80 and $8.00, implying mid-single-digit growth. Revenue is projected to increase by 3-5%, driven by anticipated volume growth in intermodal and bulk commodities. However, Robinson warned of potential risks, including geopolitical tensions affecting trade routes, labor market tightness, and regulatory changes in environmental standards. "We are prepared to adapt to whatever challenges come our way, leveraging our extensive network and innovative solutions to drive value for our customers and shareholders," she affirmed.

The quarter's results also highlight CN's commitment to sustainability. The company advanced its goal of reducing greenhouse gas emissions by 43% by 2030, from a 2019 baseline, through initiatives like the adoption of biofuels and electrification pilots. CN reported a 15% improvement in fuel efficiency per gross ton-mile, achieved via optimized train configurations and energy-efficient locomotives. Furthermore, CN's community engagement efforts included $10 million in grants to support education, environmental conservation, and Indigenous reconciliation programs across its operating regions.

Analysts reacted positively to the earnings release, with several firms raising their price targets on CN stock. Shares of CNR (TSX) and CNI (NYSE) rose approximately 4% in early trading, reflecting investor confidence in the company's trajectory. "CN's ability to deliver consistent results in a volatile environment positions it well for sustained growth," said one transportation sector analyst from RBC Capital Markets.

This performance comes at a time when the broader rail industry faces scrutiny over service levels and pricing practices. CN, along with peers like Canadian Pacific Kansas City (CPKC), has been investing heavily in capacity expansions to address bottlenecks, particularly in Western Canada where grain exports have surged. The company's strategic acquisitions, such as the recent purchase of a short-line railroad in the U.S. Gulf Coast, are expected to enhance connectivity and open new revenue streams in petrochemicals and refined products.

Robinson closed the earnings call by reiterating CN's long-term vision: to be the safest, most efficient, and customer-focused railroad in North America. "Our people are the heart of this company, and their dedication is what propels us forward," she said. As CN moves into the second half of 2025, the focus will remain on executing its growth strategy, which includes digital transformation, supply chain partnerships, and sustainable practices.

Overall, CN's Q2 2025 results demonstrate a balanced approach to growth and efficiency, positioning the company to capitalize on emerging opportunities in a recovering global economy. Investors and stakeholders will be watching closely as the year unfolds, particularly with upcoming trade negotiations and infrastructure funding announcements that could further bolster the rail sector.

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C Nto Report Second- Quarter 2025 Financialand Operating Results Today

CN Reports Strong Second-Quarter 2025 Financial and Operating Results Amid Economic Headwinds