Rail Giant Withdraws Multi-Year Guidance, Cites Tariff Disruption
Canadian National Railway has pulled its long-term financial guidance, citing persistent uncertainty around tariffs and international trade. The Montreal-based company reported modest profit growth in the second quarter but warned investors of weaker volumes ahead as supply chain decisions shift in response to global tensions.
“We are indeed in uncertain times,” said CEO Tracy Robinson during an earnings call. She emphasized that the company is focused on margin protection and operational efficiency as external conditions remain unpredictable.
Tariff Volatility Forces Customers to Rethink Logistics
Janet Drysdale, CN’s interim chief commercial officer, pointed to tariff instability as a major reason customers are re-evaluating their freight needs. As a result, CN has revised its full-year volume expectations, now forecasting only low single-digit growth in revenue ton miles (RTM), the industry-standard measure of freight volume. RTMs were down 1 percent in Q2 compared to the previous year.
The pullback in expected cargo movement has direct implications for the company’s financial targets. CN now projects adjusted diluted earnings per share growth in the mid to high single-digit range for 2025. This is a notable reduction from its earlier projection of 10 to 15 percent EPS growth.
Revenue Slips Slightly as Profit Rises
For the quarter, CN posted net income of $1.17 billion, up slightly from last year. However, revenue dropped about 1 percent to $4.27 billion, reflecting the challenges of managing freight flow in an increasingly volatile trade environment. Diluted earnings per share rose to $1.87, compared to $1.75 a year ago.
Despite the downward revisions, CN announced a third-quarter dividend of 88.75 cents per share, to be paid in late September. CFO Ghislain Houle confirmed that capital expenditures will be slightly reduced for the remainder of the year, further reflecting the company’s cautious stance.
CN’s Strategy: Caution Now, Growth Later
As CN navigates reduced demand and macroeconomic uncertainty, it continues to focus on cost discipline and customer engagement. Executives stressed that despite lower expectations, the company is positioning itself for long-term growth once the trade landscape stabilizes. Houle added that currency fluctuations, particularly a stronger Canadian dollar, are also weighing on projections for the year.
In contrast to its earlier optimism in May, when CN reaffirmed its guidance despite peer companies cutting theirs, this shift in tone underlines how quickly tariff dynamics can reshape logistics. For now, CN is playing defense while it waits for clearer signals from global trade policymakers.
