CN Railway Q4 Net Income Up 9% on Efficiency Gains

Canadian National Railway’s Q4 net income surged 9% to C$1.2B, driven by operational efficiency gains despite a modest 2% revenue increase, signaling strong performance.

January 30, 2026 9:39 pm

🛑 Key Takeaways:

Canadian National Railway grew Q4 2025 net income by 9% on only a 2% revenue increase, signaling strong cost control.
The operating ratio improved by 1.4 points to 61.2%, driven by a 3% increase in train length and a 2% rise in car velocity.
Stronger freight volumes and operational discipline allowed CN to significantly outperform top-line growth, a positive signal for the Class I rail sector.

MONTREAL, CANADA – Canadian National Railway (TSX: CNR, NYSE: CNI) reported a 9% increase in fourth-quarter net income to C$1.2 billion, with revenues for the period rising 2% to C$4.5 billion. The results, which beat analyst expectations, were driven by higher freight volumes and measurable gains in operational efficiency, translating modest revenue growth into substantial bottom-line gains.

Metric (Q4 2025 vs Q4 2024)	Value / Change
Revenue	C$4.5 billion (+2%)
Net Income	C$1.2 billion (+9%)
Adjusted Diluted EPS	C$2.08 (+14%)
Operating Ratio	61.2% (from 62.6%, a 1.4-point improvement)
Revenue Ton Miles (RTMs)	+4%
Average Train Length	7,868 feet (+3%)

Operational & Technical Details

CN’s financial performance was underpinned by concrete improvements in network operations. Freight volume, measured in revenue ton miles (RTMs), increased by 4% year-over-year. Gross ton miles (GTMs) saw a more significant 5% rise. These volume increases were handled with greater efficiency. Car velocity increased by 2%, while through dwell time decreased by 1%, indicating faster asset turnover. Critically, average train length grew 3% to 7,868 feet, a key driver in reducing crew and fuel costs per ton-mile. These operational gains were the primary contributor to the 1.4 percentage point improvement in the company’s operating ratio.

Market Impact Analysis

CN’s results demonstrate a successful strategy of leveraging operational efficiency to drive profitability. The ability to convert a 2% revenue gain into a 9% net income increase highlights effective cost management and pricing power. This performance sets a high benchmark for the North American Class I rail industry, proving that disciplined operations can deliver significant shareholder value even in a moderate growth environment. The improved operating ratio will be closely watched by investors as a key indicator of CN’s sustained competitive advantage against other carriers.

FAQ: Quick Facts

What were CN’s key financial results for Q4 2025?

For Q4 2025, CN reported revenue of C$4.5 billion (a 2% increase) and net income of C$1.2 billion (a 9% increase) compared to the same period in 2024. Adjusted diluted EPS grew 14% to C$2.08.

How did CN improve its operational efficiency?

CN improved its key efficiency metrics by increasing average train length by 3% to 7,868 feet, boosting car velocity by 2%, and reducing terminal dwell time by 1%. This contributed directly to an improved operating ratio of 61.2%.