Canadian National Earnings: Cold Weather and Canadian Port Headwinds a Headache

Management expects low-to-mid-single-digit consolidated volume growth in 2025.

Matthew Young, CFA 31 January, 2025 | 6:32PM
Facebook Twitter LinkedIn

Industrials Sector artwork

Key Morningstar Metrics for Canadian National Railway Company


What We Thought of Canadian National Railway Company’s Earnings

Canadian National Railway Company’s CNR fourth-quarter top line fell 2.5% year over year due to labor-related port disruption (strikes at Vancouver, Prince Rupert, and Montreal) and greater cold weather operating restrictions. These factors also pressured margins during the quarter.

Why it matters: Revenue came in slightly short of forecast, due to lower-than-expected total volumes (port and weather disruption). Profitability also missed our expected run rate for similar reasons.

  • Consolidated volume fell 5%, while all-in yield (revenue per carload) rose 2%, including core pricing above rail inflation. Note that despite healthy new business wins, intermodal activity fell 6% because of the port strikes, though Canadian National expects a rebound in 2025 as it recovers lost volume.
  • The firm’s operating ratio worsened by 330 basis points year over year to 62.6% on lost leverage from lower volumes and elevated weather-related costs.

The bottom line: We don’t expect to materially alter our fair value estimate for Canadian National. The shares trade in fairly valued territory relative to our long-term free cash flow forecasts.

Coming up: Management expects low-to-mid-single-digit consolidated volume growth in 2025, driven by new business wins, recovery of lost volumes, and modest economic growth (slightly higher industrial production). It expects 10%-15% adjusted earnings per share growth.

  • Volume guidance didn’t deviate materially from our previous forecasts.
  • We’ve been assuming OR improvement to 59.6% in 2025 (versus 62.9% in 2024), though we will likely temper that slightly, given that the midpoint of EPS guidance growth came in below our previous forecast.


The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar's editorial policies.

Facebook Twitter LinkedIn

About Author

Matthew Young, CFA  Matt Young, CFA, is an equity analyst with Morningstar.

© Copyright 2025 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy       Disclosures        Accessibility