Q2 2025 Canadian National Railway Co Earnings Call Transcript
Key Points
- Canadian National Railway Co (CNI) achieved a 2% adjusted EPS growth despite flat year-over-year car loads and a 1% reduction in RTMs.
- The company reported strong bulk volumes, particularly in the agricultural sector, showcasing the strength of its network.
- Operating metrics such as velocity, dwell, and customer service are performing well, contributing to a 50 basis points year-over-year improvement in margin.
- Efforts to manage costs and adjust resources proactively have been successful, with a focus on maintaining network fluidity and performance.
- The company has a strong origination network, with over 85% of its volume originating on its lines, providing resilience in its business model.
- Tariffs and a weaker industrial economy have negatively impacted merchandise and intermodal segments, creating a drag on revenues and margins.
- The uncertainty around tariffs and trade environment, particularly in Canada, poses challenges for predicting merchandise and intermodal volumes for the second half of the year.
- The company has reduced its volume outlook for the back half of the year due to ongoing US trade and tariff actions and uncertainty.
- Lower volumes in petroleum and chemicals were impacted by extended turnarounds at Western Canadian refineries and policy changes in the US and Canada.
- The Canadian carbon tax surcharge repeal impacted revenues by about $70 million in the quarter, and this will be a headwind for the next three quarters.
Good afternoon. My name is Christa and I will be your operator today. (Operator Instructions) At this time, I would like to turn the call over to Stacy Alderson, CN's Assistant Vice President of Investor Relations. Ladies and gentlemen, Ms. Alderson.
Thank you, Christa. Welcome everybody, and thank you for joining us for CN's second quarter 2025 financial and operating results conference call. Joining us on the call today are Tracy Robinson, our President and CEO; Derek Taylor, our Chief Field Operations Officer; Pat Whitehead, our Chief Network Operations Officer; Janet Drysdale, our Interim Chief Commercial Officer; and Ghislain Houle, our Chief Financial Officer.
As note, we have forward-looking statements and non-GAAP definitions for your reference on page 2 of our presentation. These forward-looking statements include estimates, goals, and predictions about the future based on our current information and educated assumptions.
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