Canadian National Railway Company (CN) lifted net income 6% to C$1.209 billion in the third quarter of 2026, ended Sept. 30, but faster-growing operating expenses left its reported operating ratio higher despite stronger freight activity.
Revenue reached C$4.771 billion, up 15% from a year earlier. Operating expenses rose 19% to C$3.041 billion from C$2.559 billion.
CN’s unaudited operating estimates showed revenue ton-miles and gross ton-miles each increased 4%, to 59,383 million and 116,264 million, respectively. The company said higher grain exports in Canada and the United States, refined petroleum shipments and metals volumes supported activity. Lower Canadian metallurgical coal exports and international intermodal shipments partly offset those gains. Higher freight rates, fuel-surcharge rates and the effect of a weaker Canadian dollar also lifted revenue per ton-mile, CN said.
The company cited higher fuel prices, wage increases, purchased services and material costs among the reasons for the increase in expenses. A C$118 million impairment followed CN’s decision to discontinue development of certain dispatching and back-office IT components before completion. Lower average headcount partly offset the cost pressures.
CN’s reported operating ratio rose 230 basis points to 63.7%. Its adjusted ratio was 61.0%, an improvement of 40 basis points. Diluted earnings per share rose 9% to C$2.00; adjusted diluted EPS, a non-GAAP measure, increased 18% to C$2.16, or 17% to C$2.14 on a constant-currency basis. CN cautions that its adjusted measures lack standardized GAAP definitions, which can limit comparisons with other companies.
For the first nine months of 2026, free cash flow increased 25% to C$2.918 billion. CN left its 2026 guidance unchanged. It expects revenue ton-miles to rise by a low single-digit percentage and adjusted diluted EPS to grow by a mid-to-high single-digit percentage, with EPS growth tracking toward the upper end of that range. It expects capital spending of about C$2.8 billion, net of customer reimbursements.
CN repurchased about 3.9 million shares for C$676 million during the quarter. Its board also approved a C$0.9150-per-share fourth-quarter dividend payment, scheduled for Dec. 30, with shareholders of record at the close of business Dec. 9.
