CN profit up 6% as grain and automotive freight lift revenue 15%

Canadian National Railway posted a 6% rise in third-quarter profit to C$1.209 billion ($866 million), or $1.43 per diluted share, as freight revenue climbed 15% on a surge in grain, energy and automotive traffic — and the Montreal-based carrier says full-year earnings are tracking toward the upper end of its forecast range.

Revenue reached $3.42 billion in the three months ended Sept. 30, up from $2.98 billion a year earlier and ahead of the roughly $3.34 billion analysts had expected. Adjusted diluted earnings rose 18% to about $1.55 a share, excluding a software impairment and rail-merger advisory costs, beating the FactSet consensus of around $1.50.

What drove the top line?

Freight revenue grew 15% to approximately $3.28 billion, with three commodity groups doing most of the work:

• Grain and fertilizer: up 19% to $661 million
• Petroleum and chemicals: up 17% to $716 million
• Automotive: up 31% to $203 million

Volume tells a more modest story. Revenue ton-miles increased just 4% — grain and fertilizer traffic rose 12% on that basis and automotive jumped 20%, but coal, forest products and intermodal all declined. Total carloads were essentially flat.

That gap between 15% revenue growth and 4% volume growth means pricing did the heavy lifting: freight revenue per revenue ton-mile rose 10%. What does this change for shippers? Essentially, CN is extracting more revenue per unit of freight moved, not simply moving more freight — a margin story more than a demand story.

Margins: two numbers, two stories

The reported operating ratio deteriorated to 63.7% from 61.4%, because operating expenses climbed 19% to about $2.18 billion — faster than revenue.

Fuel was the biggest culprit. Fuel expense jumped to $474 million from $299 million, even though CN improved fuel efficiency by 2% and posted record third-quarter fuel-efficiency performance. The railway burned less fuel per ton-mile; it just paid far more for each gallon.

The quarter also carried two one-off charges: an approximately $84 million impairment after CN discontinued development of certain components of its dispatching and back-office technology projects, and $10 million in advisory costs tied to regulatory proceedings around the proposed Union Pacific–Norfolk Southern merger.

Strip those out, and the picture flips. The adjusted operating ratio improved to 61.0%, and adjusted operating income rose 16% to $1.33 billion, versus 8% growth to about $1.24 billion on a reported basis. The adjusted figures are non-GAAP measures.

What management said

Chief Executive Tracy Robinson credited service execution and productivity for the results.

"Their relentless focus on safely executing the plan across our unique network continues to strengthen service, enhance productivity, and support our customers' success," Robinson said of CN employees in the earnings release.

Guidance and cash

CN maintained its full-year outlook. For 2026, it still forecasts low-single-digit growth in revenue ton-miles and mid-to-high-single-digit growth in adjusted diluted EPS, with earnings trending toward the top of that band. The capital investment plan stays at roughly $2.00 billion, net of customer reimbursements.

Cash generation strengthened. Free cash flow for the first nine months rose 25% to approximately $2.09 billion. Operating cash flow was slightly lower over that period, but cash used in investing activities fell to $1.33 billion from $1.78 billion. CN also repurchased about 3.9 million shares for $484 million during the quarter.

The railway flagged the usual caveats — volatile economic conditions, geopolitical conflicts and global trade tensions continue to pose risks to demand.

The underlying takeaway: CN is generating more revenue from modest freight growth while improving operating efficiency underneath the noise of fuel costs and write-downs. If grain and automotive momentum holds and fuel expense eases, the upper end of that 2026 earnings range looks well within reach.