CN Announces Solid Fourth Quarter and Year-End Results

Core Insights - CN reported strong financial and operational results for Q4 and the full year 2025, demonstrating disciplined execution and a focus on customer opportunities [2][3] - The company anticipates continued macroeconomic uncertainty and geopolitical risks in 2026, emphasizing disciplined capital allocation and cost management to enhance free cash flow [3] Quarterly Financial Results Highlights - Q4 2025 diluted EPS grew by 12%, or 14% on an adjusted basis, with an operating ratio of 61.2%, improving by 1.4 points [6][7] - Revenues for Q4 2025 reached C$4,464 million, a 2% increase from Q4 2024, while operating income rose by 6% to C$1,733 million [7] - Net income for Q4 2025 was C$1,248 million, a 9% increase compared to the previous year [7] Full-Year Financial Highlights - For the full year 2025, diluted EPS increased by 8%, or 7% on an adjusted basis, with an operating ratio of 61.9%, improving by 1.5 points [6][8] - Total revenues for 2025 were C$17,304 million, up 2% from 2024, with operating income increasing by 5% to C$6,587 million [7] - Net income for 2025 was C$4,720 million, a 6% increase from 2024 [7] Operating Performance Highlights - Gross ton miles (GTMs) increased by 5% to 118,923 million in Q4 2025, while revenue ton miles (RTMs) rose by 4% to 61,707 million [7] - The operating expenses per GTM decreased by 4% to 2.30 cents in Q4 2025 [7] - Full-year GTMs increased by 1% to 463,002 million, and RTMs also rose by 1% to 238,159 million [14] Shareholder Returns - The Board of Directors approved a 3% increase in the quarterly cash dividend for 2026, marking the 30th consecutive year of dividend increases [11] - CN plans to repurchase up to 24 million common shares over a 12-month period starting February 4, 2026 [11] 2026 Financial Guidance - CN expects volume growth in RTMs to be flat in 2026, with adjusted diluted EPS growth anticipated to slightly exceed volume growth [10] - The capital program spending for 2026 is set at C$2.8 billion, a decrease of C$500 million from 2025 [6][10]