Omaha, Nebraska-based Union Pacific Corporation (UNP) provides rail transportation services across 23 states in the U.S. through its principal operating company, Union Pacific Railroad Company. Valued at a market capitalization of $156.8 billion, the company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, coal and renewables, among others. Companies with a market cap of $10 billion or more are typically referred to as “large-cap stocks.” Union Pac ...

Summary of Canadian National Railway Company (CNI) 2026 Conference Call Company Overview - **Company**: Canadian National Railway Company (NYSE:CNI) - **Date of Conference**: February 18, 2026 - **Key Speakers**: Ghislain Houle (CFO), Jamie Lockwood (VP of IR) Key Points Financial Performance - **Q4 2025 Performance**: - EPS growth of 14%, the best in the industry [5] - Operating Ratio (OR) improved by 250 basis points [5] - Revenue Ton Miles (RTMs) increased by 3% [5] - **Full Year 2025 Performance**: - EPS growth of 7% despite only 1% volume growth [6] - OR improved by 120 basis points [6] - **2026 Guidance**: - Expecting flattish volume growth and EPS to slightly exceed volume growth [7] - Anticipated effective tax rate of 25%-26% [9] Industry Challenges - **Macroeconomic Environment**: - Described as weak with industrial production being slightly positive to flat [6] - Uncertainty regarding tariffs and USMCA impacts [7] - **Sector-Specific Headwinds**: - Forest products and metals/minerals sectors facing significant challenges due to high tariffs (45% for forest products, 50% for aluminum and steel) [8] - Capital envelope reduced by CAD 500 million, impacting capital credits [8] - Other income expected to decline compared to 2025 [10] Operational Strategies - **Cost Management**: - Focus on solid cost management to offset headwinds [5] - Initiatives to improve efficiency and productivity, including automation and consolidation of treasury and accounting [10][11] - **Volume Management**: - Positive outlook for grain movement due to a strong Canadian grain crop [24] - Domestic intermodal services performing well [24] - Challenges in forest products and metals/minerals sectors [25] Market Position and Growth Opportunities - **Network Strength**: - CN's diversified network provides a competitive advantage, particularly in accessing natural resources [76] - Rupert port's capacity for expansion is highlighted as a strategic asset [76] - **Partnerships and Expansion**: - Emphasis on growing volumes through customer partnerships and facility developments along rail lines [90] - Potential for growth in the BC Northeast due to natural gas opportunities [39] Future Outlook - **Earnings Growth Potential**: - Confidence in achieving low double-digit EPS growth under a supportive economy [62] - Current stock price viewed as undervalued, presenting a buying opportunity for investors [63] - **Merger and Acquisition Landscape**: - Concerns about potential mergers in the industry and their impact on CN's competitive position [78] - Commitment to protecting CN's franchise and shareholder value amidst industry changes [80] Conclusion - Canadian National Railway Company is navigating a challenging macroeconomic environment while focusing on cost management and operational efficiency. The company remains optimistic about its growth potential, particularly in the grain sector and through strategic partnerships, while also preparing to address potential industry disruptions from mergers.

Core Insights - CN achieved its second-best January for grain movement, shipping over 2.72 million metric tonnes from Western Canada, following a record of 2.85 million metric tonnes in January 2020 [1] - The company adapted its operations to ensure safe and efficient grain transportation despite extreme cold weather conditions [1] Group 1: Company Performance - CN's grain movement in January 2026 was significant, marking a strong performance in the agricultural sector [1] - The company has a history of supporting farmers and supply chain partners through effective operational adjustments [1] Group 2: Operational Strategy - CN is actively executing its winter operations plan to maintain service levels during challenging weather conditions [2] - Proactive solutions have been implemented as part of the 2025-2026 Winter Plan to enhance operational efficiency [2] Group 3: Company Overview - CN plays a crucial role in the economy by transporting over 300 million tons of various goods across North America annually [3] - The company operates a nearly 20,000-mile rail network, connecting key regions in Canada and the U.S., contributing to sustainable trade [3]

Core Viewpoint - CN has filed its 2025 Annual Financial Statements and related documents with Canadian and U.S. securities regulators, making them available on its website [1] Group 1: Financial Reporting - The 2025 Annual Financial Statements, Notes, and Management's Discussion and Analysis are now accessible in the "Investors" section of CN's website [1] - Printed copies of these financial documents will be provided to shareholders free of charge upon request [2] Group 2: Company Overview - CN plays a crucial role in the economy by transporting over 300 million tons of natural resources, manufactured products, and finished goods across North America annually [3] - The company operates a nearly 20,000-mile rail network that connects Canada's Eastern and Western coasts with the U.S. Midwest and Gulf Coast, contributing to sustainable trade and community prosperity since 1919 [3]

Core Insights - CN has filed its 2025 Annual Financial Statements and related documents with Canadian and U.S. securities regulators, now accessible on its website [1] - Printed copies of the financial statements will be available to shareholders free of charge upon request [2] Company Overview - CN plays a crucial role in the economy by transporting over 300 million tons of natural resources, manufactured products, and finished goods across North America annually [3] - The company operates a nearly 20,000-mile rail network, connecting Canada's Eastern and Western coasts with the U.S. Midwest and Gulf Coast, contributing to sustainable trade and community prosperity since 1919 [3]

Group 1 - The President and CEO of CN, Tracy Robinson, will speak at the Barclays 43rd Industrial Select Conference on February 17, 2026, at 8:05 a.m. Eastern Time [1] - CN will provide a live webcast of the conference on its investor relations website, with a replay available after the event [1] Group 2 - CN transports over 300 million tons of natural resources, manufactured products, and finished goods across North America annually [2] - The company operates a nearly 20,000-mile rail network that connects Canada's Eastern and Western coasts with the U.S. Midwest and Gulf Coast [2] - CN has been contributing to sustainable trade and community prosperity since its establishment in 1919 [2]

Financial Data and Key Metrics Changes - In Q4 2025, the company achieved a 14% growth in EPS and a 7% growth for the full year, aligning with mid to high single-digit guidance [7] - The operating ratio improved to 60.1% in Q4, a 250 basis point improvement year-over-year, and 61.7% for the full year, improving 120 basis points compared to 2024 [7][32] - Free cash flow reached $3.3 billion, up 8% driven by cash from operations, with disciplined capital spending [7][35] Business Line Data and Key Metrics Changes - The company saw a 5% year-over-year increase in workload, supported by strong grain demand, achieving record-setting grain tonnage for four consecutive months [17] - Intermodal revenues increased by 13% internationally and 6% domestically, benefiting from a favorable comparison against last year's port labor disruption [25] - Petroleum and Chemicals segments experienced growth, particularly a 9% increase in natural gas liquids volumes driven by strong domestic demand [25] Market Data and Key Metrics Changes - The company faced challenges in the forest products and metals markets due to weak fundamentals and tariffs, impacting overall revenue by over $350 million in 2025 [26] - The outlook for 2026 indicates flat volumes compared to 2025, with expectations of continued pressure in forest products and metals [30][37] Company Strategy and Development Direction - The company is focused on disciplined execution, prioritizing areas it can control, and maintaining strong cash flow while returning excess capital to shareholders [6][12] - The management emphasized the importance of operational efficiency and cost control, with plans to leverage productivity gains as volumes improve [12][20] - The company is positioned to benefit from its access to North American markets and a strong natural resource base, with a focus on diversifying trade [15][58] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant macroeconomic volatility and uncertainty, particularly regarding tariffs and trade flows, which could impact future performance [10][11] - The company expects a challenging environment in 2026, with a focus on maintaining pricing discipline and productivity despite headwinds [37] - Management expressed confidence in the underlying earnings power of the business and the potential for growth as market conditions normalize [75] Other Important Information - The board approved a 3% increase in dividends, marking the 30th consecutive year of dividend growth, reflecting confidence in cash generation [36] - A new share buyback program was authorized, allowing the repurchase of up to 24 million common shares [36] Q&A Session Summary Question: Update on incremental revenue target - The company closed Q4 with $100 million in incremental revenue, with an additional $100 million in the pipeline for January [44] Question: Clarification on depreciation - The variance in depreciation is due to a favorable study and corrections from over-depreciation in past acquisitions [49] Question: Long-term earnings power and CapEx - The company is focused on structural cost reduction and has invested in network capacity, positioning itself for future growth despite current headwinds [73][75] Question: Volume outlook for 2026 - The company expects strength in agriculture and energy sectors, while forest products and metals may face challenges [66]

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]

Financial Results Announcement - CN will issue its fourth-quarter and full-year 2025 financial and operating results on January 30, 2026, at 7:30 a.m. Eastern Time [1] - A conference call to review the results and the railway's outlook will start at 8:30 a.m. Eastern Time, led by Tracy Robinson, CN President and CEO [1] Participation Details - Interested parties can participate via telephone by dialing 1-800-715-9871 (Canada/U.S.) or 1-647-932-3411 (International), using passcode 4883669 [2] - Participants are advised to join the call 10 minutes early, and a live webcast will be available on CN's investor website [2] Company Overview - CN transports over 300 million tons of natural resources, manufactured products, and finished goods across North America annually [3] - The company operates a nearly 20,000-mile rail network, connecting Canada's Eastern and Western coasts with the U.S. Midwest and Gulf Coast, contributing to sustainable trade since 1919 [3]

Core Insights - Canadian Pacific Kansas City (CP) reported revenue of $2.81 billion for the quarter ended December 2025, reflecting a year-over-year increase of 1.6% but a surprise of -1.79% compared to the Zacks Consensus Estimate of $2.87 billion [1] - The earnings per share (EPS) for the same period was $0.95, which is an increase from $0.92 a year ago, but fell short of the consensus estimate of $0.99, resulting in an EPS surprise of -4.04% [1] Financial Performance Metrics - Revenue ton-miles (RTMs) for Intermodal was reported at 9.34 billion, below the average estimate of 9.64 billion from four analysts [4] - Total carloads were 1.13 million, slightly below the average estimate of 1.14 million [4] - The core adjusted operating ratio was 55.9%, better than the estimated 56.4% by four analysts [4] Segment Performance - Carloads in the Energy, chemicals, and plastics segment were 139.1 thousand, compared to the average estimate of 140.84 thousand [4] - Carloads for Grain were reported at 162.2 thousand, below the average estimate of 164.46 thousand [4] - Carloads for Coal were 127.6 thousand, exceeding the average estimate of 124.24 thousand [4]