Canadian National Railway Company Stock Earnings Reports

CN reported a solid start to 2026 with operational improvements, selective volume growth and materially stronger free cash flow. Key operating metrics improved year-over-year: RTMs +3%, carloads +2%, car velocity +6%, dwell -4%, train speed +6% and GTMs +3%. Grain set a first-quarter record; growth also came from potash, NGLs and intermodal. Productivity gains (T&E productivity +12%, locomotive productivity +8%) and the fast-track terminal initiative (already capturing ~$40M run-rate savings; ~1/3 complete) are allowing CN to handle more volume without proportional cost increases. Free cash flow was ~ $900M in Q1, up roughly $275M vs. prior year, enabling the repurchase of ~6M shares (~$870M) and a leverage ratio of ~2.7x (expected to remain at ~2.7x through 2026, return to ~2.5x in 2027). Management maintained directional 2026 guidance: flattish volumes with earnings growing slightly faster than volumes, but cautioned limited visibility and noted headwinds from safety (Q1 slip) and short-term fuel and FX, which together reduced EPS by about $0.07 in the quarter. Fuel volatility is a near-term risk (Ghoslain updated WTI range and said Q2 could see meaningful OR pressure if oil stays high), although higher fuel could be a second-half EPS tailwind. Capex posture: major Western capacity projects largely complete with remaining projects (Prince Rupert, Vancouver) finishing in 2027; no expectation of dramatic CapEx step-change beyond some tech and targeted investments. Overall: better network fluidity and commercial intensity are creating opportunities to convert incremental volume into improved margins, but near-term outcomes remain sensitive to fuel, FX, safety-related incident costs and geopolitical trade/tariff developments.