Canadian National Railway Company (CNR) Q4 2024 earnings summary

Executive summary

• 2024 was marked by significant external disruptions, including labor disputes, port strikes, and severe winter weather, leading to lower-than-expected volumes and financial results, but operational resilience enabled rapid recovery and improved service metrics.

• Volume growth was achieved despite a weak macro environment, supported by company-specific initiatives and resource alignment for low-cost growth in 2025.

• Record Canadian grain shipments and over 1% RTM growth were achieved, with strong Q4 performance in both Canada and the U.S.

• Labor stability has been restored with new agreements, and the Iowa Northern acquisition extends network reach and growth opportunities.

• The company expects strong momentum into 2025 following a swift recovery from 2024 supply chain shocks.

Financial highlights

• Q4 2024 adjusted EPS was $1.82, down 10% year-over-year; full-year adjusted EPS was $7.10, down 2%.

• Q4 operating ratio rose to 62.6% (up 330 bps); full-year adjusted OR was 62.9%.

• Q4 revenues declined 3% year-over-year to C$4,358 million; full-year revenues increased 1% to C$17,046 million.

• Free cash flow for 2024 was C$3,092 million, down from C$3,887 million in 2023.

• Adjusted ROIC for 2024 was 13.1%, up 140 bps.

Outlook and guidance

• 2025 adjusted EPS growth expected at 10-15%, reaffirming high single-digit EPS CAGR for 2024-2026.

• RTM volume growth forecasted in the low- to mid-single digits, with more than half from company-specific initiatives.

• CapEx for 2025 set at C$3.4 billion, net of customer reimbursements, to support safety, efficiency, and growth.

• Guidance assumes ~1% North American industrial production growth and stable grain crops.

• Dividend increased by 5% for 2025, marking the 29th consecutive annual increase.