CN ends 2025 with C$1.28 billion adjusted profit, up 12 %, as record 60.1 % operating ratio shows cost cuts outweigh soft North American demand.
CN Q4 Revenue Reaches C$4.46 Billion on Higher Freight Yields
Quarterly sales for the period ended 31 December 2025 climbed 2 % to C$4.46 billion, driven by richer revenue per carload even as total carloads stayed flat. Operating income rose 6 % to C$1.73 billion on a reported basis and 9 % to C$1.78 billion after one-time items. Full-year adjusted diluted earnings hit C$7.63 per share, the 27th straight annual increase.
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Car Velocity and Train Length Push Operating Ratio to Record Low
Network velocity averaged 215 car-miles per day, 2 % faster than a year earlier, while average train length grew 3 % to 7,868 ft. The combination let CN haul 5 % more gross ton-miles without extra crews. Terminal dwell slipped 1 % to 7.0 hours, helping drive the adjusted operating ratio down 2.5 points to 60.1 %, an all-time low for the company. Output per employee, measured in thousand gross ton-miles, jumped 8 % to 4,957, confirming most margin gains came from tighter operations, not higher pricing.
2026 Capital Budget Cut by C$500 Million on Economic Caution
The railway sliced next year’s capital plan to C$2.8 billion, 15 % below 2025 outlays, citing uncertain demand and a priority on free cash flow. Core track and bridge renewals remain funded, yet several Midwest siding extensions and automated gate projects are postponed. CEO Tracy Robinson told analysts CN can “grow into its footprint” should North American industrial output recover only modestly.
Shippers Favor Velocity Guarantees Over Pure Rate Cuts
Forwarders drafting 2026-2027 contracts are adding on-time arrival and dwell-cap clauses alongside traditional rate terms, say people familiar with recent tenders. CN now posts weekly velocity scores for every intermodal lane, data rarely shared five years ago. The change favors railroads with tight cost control—CN’s 60.1 % ratio again—because shippers value schedule savings that can top the worth of a small rate discount.
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Border Route Paperwork Raises Shipper Costs
U.S.-Canada traffic, about 28 % of CN’s volume, faces added filings under the 2026 Customs Rail Data Exchange pilot. Grain and auto-parts shippers could face new inspection fees that chip away at last year’s 4 % unit-cost improvement. CN says it is working with the Canada Border Services Agency to fold electronic manifest checks into existing yard work rather than create extra stops.
Useful Resources
- Association of American Railroads Weekly Traffic Report – Public database updating carload and intermodal traffic every Wednesday
- Railway Age Capital Spending Survey 2026 – Annual white paper benchmarking North American railroad capex
- FreightWaves SONAR Rate Index – Dashboard comparing rail contract rates to truck spot prices on 55 major lanes
- Transport Canada Rail Safety Directorate – Portal posting new rules on train length, crew size, and border data
Source: CN quarterly earnings release and investor call, 28 January 2026
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