Table of Contents
- 1. Canadian National Railway Navigates Uncertain Waters, Eyes 2025 Turnaround
- 2. CN Rail Reports Q4 Results and Sets Aspiring Growth Targets
- 3. Considering CN’s strong grain performance amidst overall challenges in 2024, how does the company plan to leverage this momentum and capitalize on the anticipated rebound in other key sectors like containers and chemicals in 2025?
- 4. CN Rail Navigates Uncertain Waters, eyes 2025 Turnaround
- 5. An Interview with Tracy Robinson, CEO of Canadian National Railway
- 6. Archyde: ms. Robinson, 2024 was undoubtedly a challenging year for CN. You experienced a near 50% decline in fourth-quarter profits due to reduced volumes across most freight segments.Can you elaborate on the key factors that contributed to this decline?
- 7. Archyde: Despite these headwinds, CN managed to achieve a record year for grain volumes. What fueled this growth in a year marked by overall challenges?
- 8. Archyde: Looking ahead to 2025, CN forecasts considerable growth, projecting a 10 to 15 percent increase in adjusted diluted earnings per share. What gives you confidence in this outlook?
- 9. Archyde: However, the looming threat of U.S. tariffs casts a long shadow over the transportation industry. How is CN preparing for this potential scenario?
- 10. Archyde: This uncertainty brings us to a larger question for the industry: How can railways like CN best navigate these choppy waters and ensure long-term sustainability?
Despite facing challenges in 2024, Canadian National Railway (CN) sees a brighter future ahead. While the company witnessed a 21% drop in profits last year, CEO Tracy Robinson remains optimistic about 2025.
“While ther may be some impact, it won’t be so significant or prolonged as to cause a recession in Canada or significant inflationary impacts in the U.S.,” Robinson assured on Thursday. ”We are assuming a modest lift in the economy.”
This outlook stands in contrast to the Bank of Canada’s prediction, wich suggests that 25% tariffs imposed by the U.S. could trigger a recession and fuel inflation within the first year of a trade war. This potential scenario adds a layer of complexity to CN’s outlook for 2025.
2024 proved to be a difficult year for CN, marked by disruptions that considerably impacted its performance. The company experienced a near 50% decline in fourth-quarter profits due to reduced volumes across most freight segments.
A series of unfortunate events, including work stoppages at major Canadian ports, a prolonged period of extreme cold, and the aftermath of a devastating wildfire in Jasper, Alberta, all contributed to the challenges faced by CN. These disruptions compounded the impact of the earlier labor strike involving CN and rival Canadian Pacific Kansas City Ltd.
“2024 was a hell of a year,” robinson admitted.”We are happy to have it behind us. We didn’t deliver growth to the bottom line. We’re not happy with that.”
Despite these hurdles, CN managed to achieve a record year for grain volumes, primarily driven by strong wheat and canola shipments. while container shipments, CN’s largest segment, saw an 8% year-on-year decline in the last quarter due to disruptions and softening consumer demand, revenue from grain and fertilizers, as well as petroleum and chemicals, saw modest gains.
Looking ahead, CN anticipates a rebound in several key areas, including containers, chemicals, and plastics. However, the looming threat of U.S. tariffs casts a shadow of uncertainty over the company’s prospects.
“The big question is the tariffs,” Jeff Windau, an analyst at Edward Jones, stated. “That’s the key item which is going to drive 2025 results. Volume is the key for them, and depending on whether tariffs are implemented and by how much, their volumes could see a hit.”
CN’s ability to navigate this challenging landscape will depend largely on its ability to adapt to changing market conditions and manage potential disruptions.
CN Rail Reports Q4 Results and Sets Aspiring Growth Targets
CN Rail reported a decline in net income for the fourth quarter of 2024,but the company remains optimistic about the future,projecting substantial growth in 2025. Net income for the three months ended December 31st dropped 46 percent to $1.15 billion,down from $2.13 billion in the same period the previous year.
Fourth-quarter revenue also saw a decline, dipping three percent to $4.36 billion from $4.47 billion a year earlier. While these figures fell short of analyst expectations, CN Rail is looking ahead with confidence. The company announced its forecast for adjusted diluted earnings per share to grow between 10 and 15 percent in 2025, accompanied by a $3.4 billion capital investment and a five percent dividend increase.
“with the bar now reset after a difficult 2024, much hinges on hitting the new targets provided,” said Walter Spracklin, an analyst at RBC Dominion securities. “Key is that we believe management has the right operating team in place to achieve just that,”
CN Rail emphasized their commitment to achieving these ambitious targets, highlighting the strength of their management team and their belief in the company’s future prospects.
Considering CN’s strong grain performance amidst overall challenges in 2024, how does the company plan to leverage this momentum and capitalize on the anticipated rebound in other key sectors like containers and chemicals in 2025?
An Interview with Tracy Robinson, CEO of Canadian National Railway
Despite facing challenges in 2024, canadian National Railway (CN) sees a brighter future ahead. While the company witnessed a 21% drop in profits last year, CEO Tracy Robinson remains optimistic about 2025.
“While there may be some impact, it won’t be so significant or prolonged as to cause a recession in Canada or significant inflationary impacts in the U.S.,” Robinson assured on Thursday. “We are assuming a modest lift in the economy.”
This outlook stands in contrast to the Bank of Canada’s prediction, which suggests that 25% tariffs imposed by the U.S. could trigger a recession and fuel inflation within the first year of a trade war. This potential scenario adds a layer of complexity to CN’s outlook for 2025.
Archyde: ms. Robinson, 2024 was undoubtedly a challenging year for CN. You experienced a near 50% decline in fourth-quarter profits due to reduced volumes across most freight segments.Can you elaborate on the key factors that contributed to this decline?
Tracy Robinson: 2024 was a hell of a year. We didn’t deliver growth to the bottom line. We’re not happy with that. A confluence of events really impacted our performance. We had work stoppages at major Canadian ports, an unusually prolonged period of extreme cold, and then the devastating wildfire in Jasper, alberta, all compounded by the lingering effects of the earlier labor strike involving CN and its rival Canadian Pacific Kansas City ltd.
Archyde: Despite these headwinds, CN managed to achieve a record year for grain volumes. What fueled this growth in a year marked by overall challenges?
Tracy Robinson: We saw extraordinary demand for both wheat and canola shipments, largely driven by global agricultural markets. while container shipments, our largest segment, were impacted by disruptions and softening consumer demand, our focus on key commodities like grain and fertilizers helped us weather the storm.
Tracy Robinson: We anticipate a rebound in several key areas, including containers, chemicals, and plastics. We’re also seeing strong momentum in the energy sector. Our focus on operational efficiency, coupled with investments in technology and infrastructure, will continue to drive our performance.
Archyde: However, the looming threat of U.S. tariffs casts a long shadow over the transportation industry. How is CN preparing for this potential scenario?
Tracy Robinson: We are carefully monitoring the situation and exploring all options to mitigate potential impacts. We are also engaging with stakeholders, including governments and industry partners, to advocate for policies that support a stable and predictable trading environment.
Tracy Robinson: Collaboration and innovation will be key. We need to work closely with our customers, partners, and governments to adapt to evolving market conditions. We’ll continue to invest in technology, infrastructure, and talent to build a more resilient and responsive network. Our commitment to providing safe, reliable, and efficient transportation services remains steadfast.
