Canadian National Railway Company (CNI) reported first‑quarter 2026 earnings on April 29 2026, delivering diluted earnings per share of C$1.87 and adjusted diluted EPS of C$1.80. Revenue totaled C$4.38 billion, a 1 % decline from C$4.40 billion in the same quarter last year, while gross ton‑miles rose 3 % to 118,389 million and revenue ton‑miles increased 3 % to 61,834 million, setting new quarterly records for both metrics.
Operating margin contracted to 60.1 % from 58.9 % a year earlier, and the operating ratio worsened to 64.6 % from 63.4 % in Q1 2025. The deterioration reflects higher operating expenses driven by winter‑related incidents, increased labor and material costs, and a higher effective tax rate, all of which offset the gains from improved fuel efficiency and network productivity.
Segment performance varied: grain and intermodal volumes grew, supporting the record revenue ton‑miles, while forest products, metals, and coal segments lagged behind, contributing to the overall revenue decline. Energy‑related freight remained stable, and the company’s diversified commodity mix helped cushion the impact of weaker legacy segments.
Management guided that volume growth will remain flat in 2026 and that adjusted diluted EPS growth will slightly exceed that pace, maintaining a capital expenditure program of approximately C$2.8 billion. The guidance signals confidence that the productivity gains achieved over the past 18 months will translate into margin expansion even without significant volume tailwinds.
Tracy Robinson, CN President and CEO, said, "Our focus is on strong execution. That means getting the fundamentals right every day and delivering consistently for our customers. The discipline the team is bringing to how we run the network and deploy our assets drove productivity gains and a new first‑quarter record for fuel efficiency. It’s helping us build a more efficient operation that better supports our customers’ needs." She added, "I want to thank the entire CN team for delivering on our plan, despite ongoing uncertainty in the macro environment. Our strong commercial and operating performance allows us to fully leverage the strength of our network, enabling us to capture incremental volume. We remain firmly focused on safety, tight execution, cost control and capital discipline."
Analysts responded to the results with a mix of caution and optimism. Bank of America upgraded CNI to "Buy" and raised its price target, citing strong volume momentum, record Canadian grain crop volumes, above‑target intermodal volumes, and improved service metrics. RBC Capital also noted the 3 % year‑over‑year increase in revenue ton‑miles. The mixed reaction reflects investor focus on the margin compression and operating ratio deterioration, while acknowledging the company’s operational strengths and guidance confidence.
The earnings release highlights a clear headwind: margin compression driven by higher operating costs and a worsening operating ratio, which signals pricing pressure and cost inflation. The tailwind is the continued strength in grain and intermodal freight, which supports record revenue ton‑miles and underpins the company’s confidence in flat volume growth and modest EPS expansion for 2026. Together, these dynamics illustrate CN’s ability to navigate short‑term cost pressures while leveraging its diversified freight network for long‑term resilience.
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