Canadian National Railway pany(US:CNI)2025-10-31 11:35Financial Performance - Revenues of $4,165 million, an increase of $55 million, or 1% compared to Q3 2024[12] - Operating income of $1,606 million, an increase of $91 million, or 6% compared to Q3 2024[12] - Net income for Q3 2025 was $1,139 million, a 5% increase from $1,085 million in Q3 2024, with diluted earnings per share rising by 6% to $1.83[28] - Free cash flow for Q3 2025 was $793 million, a significant increase of 36% from $584 million in Q3 2024[26] - Total revenues for Q3 2025 were $4,165 million, a 1% increase from $4,110 million in Q3 2024, while total revenues for the nine months ended September 30, 2025 were $12,840 million, also a 1% increase from $12,688 million in the same period of 2024[48] Operating Metrics - Operating ratio improved by 1.7 points to 61.4%[12] - The operating ratio improved to 61.4% in Q3 2025 from 63.1% in Q3 2024, reflecting better cost management[27] - The operating ratio for Q3 2025 improved to 61.4%, down from 63.1% in Q3 2024, and for the nine months ended September 30, 2025, it was 62.2%, compared to 63.6% in the same period of 2024[43] - The company expects continued improvements in operating metrics due to fewer network disruptions and a focus on scheduled operating plans[32] Revenue Breakdown - Revenues for Q3 2025 were $4,165 million, a 1% increase from $4,110 million in Q3 2024, driven by higher volumes and freight revenue per RTM[26] - Freight revenues for Q3 2025 were $3,991 million, a 2% increase from $3,922 million in Q3 2024, while for the nine months ended September 30, 2025, freight revenues were $12,369 million, up 1% from $12,212 million in the same period of 2024[48] - Petroleum and chemicals revenues increased by $15 million, or 2%, in Q3 2025, while revenues for the first nine months increased by $31 million, or 1%[54] - Metals and minerals revenues decreased by $25 million, or 5%, in Q3 2025, and by $64 million, or 4%, in the first nine months of 2025, primarily due to lower volumes[55][58] - Coal revenues increased by $8 million, or 3%, in Q3 2025, and by $34 million, or 5%, in the first nine months of 2025, mainly due to higher volumes[63] Expenses and Costs - Operating expenses for Q3 2025 were $2,559 million, a decrease of $36 million, or 1%, compared to Q3 2024, attributed to lower fuel prices[73] - Fuel expenses decreased by $101 million, or 19%, in Q3 2025, primarily due to lower fuel prices and the elimination of the Canadian federal carbon tax program[77] - The company reported a 20% decrease in fuel expenses for Q3 2025, amounting to $418 million, compared to $519 million in Q3 2024[47] Capital and Investments - The company expects to invest approximately $3.35 billion in its capital program in 2025[21] - Capital expenditures for Q3 2025 totaled $1,105 million, a decrease from $1,176 million in Q3 2024[111] Shareholder Returns - The company repurchased 7.7 million common shares for $1,041 million at a weighted-average price of $134.77 per share in Q3 2025, compared to 2.5 million shares for $427 million at $165.40 per share in Q3 2024[119] - Total dividends paid amounted to $550 million in Q3 2025, up from $532 million in Q3 2024, reflecting an increase in the quarterly dividend rate from $0.8450 to $0.8875 per share[122] Debt and Obligations - As of September 30, 2025, the company had total contractual obligations of $38,943 million, including $21,114 million in debt obligations[123] - The adjusted debt-to-adjusted EBITDA multiple was 2.54 times for the twelve months ended September 30, 2025, compared to 2.51 times for the same period in 2024[128] Risk Factors - The imposition of tariffs by the U.S. administration on imports and retaliatory tariffs by other countries presents significant risks to global trade, potentially impacting demand for rail services[170] Internal Controls and Compliance - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of September 30, 2025[172] - There were no changes in the Company's internal control over financial reporting that materially affected its effectiveness during the third quarter ended September 30, 2025[173]