Q3 2025 Canadian National Railway Co Earnings Call Transcript
Key Points
- Canadian National Railway Co (CNI) achieved a 6% growth in EPS and an operating ratio improvement of 170 basis points to 61.4% in Q3.
- The company has announced a reduction in capital spend for 2026 to $2.8 billion, down nearly $600 million from this year's level, which is expected to enhance free cash flow.
- CNI has been successful in increasing productivity, with training engine labor productivity improving by 20% year over year.
- The company has accelerated its share buyback program, taking close to 8 million shares out of circulation for just over a billion dollars.
- CNI's network continues to perform well, with car velocity at 211 miles per day and local service commitment performance at 95%.
- CNI faced challenges in predicting the volume environment, with lower volumes preventing full earnings growth as forecasted.
- The company is experiencing macroeconomic headwinds, including the impact of tariffs and a weak outlook for North American industrial production and housing starts.
- Safety metrics have seen a year-to-date increase in reportable injury and accident ratios by 4% and 14% respectively.
- Forest products, especially lumber, saw a year-over-year decline due to weak demand and increased duties.
- CNI's guidance handling over the past two years has been a pain point for shareholders, with the company acknowledging the need for improvement.
Good morning. My name is Krista, and I will be your operator today. All participants are now in a listen-only mode. After the speaker's remarks, there will be a question-and-answer session during which we ask that you kindly limit yourself to one question. At this time, I would like to turn the call over to Stacey Alderson, CN's assistant Vice President of investor relations, ladies and gentlemen, Ms. Alderson.
Thank you, Krista.
Welcome everyone.
Thank you for joining us for CNN's 3rd quarter financial and operating results conference call. Joining us on the call today are Tracy Robinson, our President and CEO Pat Whitehead, our Chief Operations Officer, Janet Drysdale, our Chief Commercial Officer, and Gle W, our Chief Financial Officer.
As a note, we have forward-looking statements and non-GAAP definitions for your review on page 2 of our presentation.
These forward-looking statements include estimates, goals, and predictions
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