CN Rail lowers earnings expectations, cuts outlook amid trade volatility

Steve Hansen, Managing Director and Equity Analyst at Raymond James, joins BNN Bloomberg to discuss CN Rail's decission to cut it's 2024-2026 outlook amid tariff uncertainty.

MONTREAL — Canadian National Railway Co. reported its profit ticked up during its second quarter compared with last year, as it said trade uncertainty is making it difficult for it to provide investors with an outlook.

The Montreal-based company said in a release Tuesday that it is removing its previously issued 2024-26 financial outlook given continued uncertainty surrounding trade and tariffs.

“We are indeed in uncertain times and while we can’t predict exactly where tariffs and trade and the economy will go, we are very intensely focused on doing the things that we can do both with our customers and in controlling our costs to make sure that we protect our margins and are well positioned to execute our growth strategy as we go forward,” Tracy Robinson, CN’s president and CEO, told analysts on a conference call.

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Janet Drysdale, the interim chief commercial officer for CN, said the on-again, off-again tariffs were causing customers to re-evaluate their supply chains.

“Based on what we saw in Q2 and what we’re hearing from customers, we have reduced our volume outlook for the back half of the year, and consequently updated our full year volume assumption to low single-digit RTM (revenue ton miles) growth versus 2024,” she said on the same call.

Cargo volumes as measured in revenue ton miles -- a key metric gauging how many tons of freight are hauled in a mile -- decreased by one per cent during the quarter compared with the previous year.

CN also lowered its 2025 forecast for adjusted diluted earnings per share growth, saying it now expects growth in the mid to high single-digit range. A previous estimate from CN expected adjusted diluted earnings per share to increase between 10 and 15 per cent for 2025.

“With a revised volume assumption and corresponding mixed impact, as well as a higher Canadian dollar assumption for the balance of year, we are revising our guidance to mid to high single-digit EPS growth in 2025,” Ghislain Houle, chief financial officer of CN, said on the earnings call.

He also said the company is looking at slightly reducing its capex for the year.

“Tariff policies have had a meaningful impact on traffic volumes and mix. We are staying close to our customers and continue to manage our costs and resources tightly,” Houle said.

CN reported its net income inched up to $1.17 billion during its second quarter compared with last year. The Montreal-based company says revenue fell about one per cent, to $4.27 billion compared with $4.33 billion a year earlier.

Diluted earnings per share for the quarter came in at $1.87, up from $1.75 a year earlier.

CN also announced it declared a third quarter dividend of 88.75 cents per common share, which will be paid on Sept. 29.

Changes to CN’s 2025 forecast come after the rail company stood by its financial forecast for the year when it reported first-quarter earnings in May. This occurred even as other companies lowered their targets around the same time, including rival Canadian Pacific Kansas City Ltd.

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This report by The Canadian Press was first published July 22, 2025.

Daniel Johnson, The Canadian Press