CN Railway profits rise on grain and fuel shipments as CEO cites positive investment climate

MONTREAL · Canadian National Railway Co. reported higher profits in the third quarter, driven by increased shipments of grain and petroleum products. The Montreal-based company said net income rose six per cent year-over-year to $1.21 billion. Revenue increased 14.5 per cent to $4.77 billion, though fuel costs also jumped 56 per cent. The company earned $2.16 per adjusted diluted share, beating analysts' expectations of $2.10 per share, according to LSEG Data & Analytics.

Chief executive Tracy Robinson said energy remains a key growth driver for the railway. Petroleum and chemical hauls brought in $1 billion in revenue, a 17 per cent increase from the same period last year. The tail end of a strong grain crop also propelled a 19 per cent increase in that category. Robinson expressed optimism about longer-term growth prospects, citing what she called a more business-friendly government under Prime Minister Mark Carney. "The Carney administration has leaned into creating a more positive environment for investment," she said on a call with analysts. She pointed to regulatory and tax changes, including a provision allowing businesses to immediately write off 100 per cent of some investments.

Robinson also highlighted growing investment in resource projects, including $2 billion from Ontario and Ottawa for road infrastructure in the province's mineral-rich Ring of Fire. "This is a very constructive environment and it's focused on getting Canada's natural resources, which are in high demand, to markets across the continent and around the world," she said. The CEO noted a soon-to-be-finalized deal with Union Pacific will give CN access to Mexico's manufacturing corridor. The agreement grants CN the right to run trains over UP tracks between Memphis and Eagle Pass, Texas. Trade between Canada and Mexico amounts to about US$45 billion each year, much of it tied to Eastern Canada where CN has an extensive network, Robinson said. On tariffs, executives said trade along CN tracks has stabilized for now, with some auto, steel and forest shipments rerouted beyond the United States. "There are some adjustments that have been made there around the kinds of markets that they're shipping into," Robinson said of the three sectors, which face U.S. duties of between 25 and 50 per cent. Chief commercial officer Janet Drysdale added, "We've overcome the $350 million of tariff headwinds from last year."

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Domestically, CN faced an emergency in July when crews had to be evacuated from several trains stopped by wildfires in northwestern Ontario. A widely shared video showed flames closing in on a locomotive near Armstrong, Ont. The railway temporarily suspended operations on a crucial stretch of main-line track on July 13, halting all freight traffic. "The wildfires did disrupt us a little bit and that impacted mainly domestic, but it also impacted a little bit on the overseas side. We're past that now," Drysdale said. Federal authorities are investigating whether the company broke the law.

Analyst Walter Spracklin of RBC Dominion Securities said CN delivered another earnings beat. He said growth potential next year lies in shipments of natural gas liquids such as propane out of Prince Rupert, B.C., where CN is the sole rail provider. The port also saw the Canxport container facility open in August, allowing 400,000 more steel boxes to flow out of British Columbia each year. The company made no changes to its 2026 financial forecast. CN also announced that chief financial officer Ghislain Houle will step down on Feb. 1 after more than 10 years in the role. He will stay on as a strategic adviser through the end of March. Jamie Lockwood, the vice-president of investor relations and special projects, will replace him.

With files from The Canadian Press, BNN Bloomberg and The Globe and Mail