Canadian National Railway Company (NYSE:CNI) reported stronger-than-expected second-quarter results on Friday, surpassing analyst forecasts for both earnings and revenue while raising its financial outlook for the remainder of 2026.
Shares of the railway operator rose 0.97% in premarket trading following the release as investors welcomed the improved guidance and continued operational momentum.
Earnings and revenue exceed forecasts
CN Railway posted adjusted earnings of C$2.08 per share for the second quarter, ahead of analysts’ consensus estimate of C$1.93 per share.
Quarterly revenue reached C$4.75 billion, exceeding market expectations of C$4.56 billion and increasing 11% from C$4.27 billion in the corresponding period last year.
The company attributed the stronger performance to higher freight volumes, particularly in grain and energy products.
Improved outlook for fiscal 2026
Following the solid quarterly performance, CN revised its full-year guidance higher.
The company now expects revenue ton miles to grow at a low single-digit rate during 2026, compared with its previous forecast for flat growth.
Management also continues to project adjusted diluted earnings per share growth in the mid-to-high single-digit range, with the updated outlook reflecting stronger business momentum than previously anticipated.
Revenue ton miles increased 5% year-on-year to 62,250 million during the quarter.
“I want to thank the CN team for the strong results this quarter, which reflect their discipline, focus, and execution,” said Tracy Robinson, President and Chief Executive Officer. “We delivered on our key commitments, with solid operational and commercial performance, improved productivity, strong cash flow generation, and continued financial discipline.”
Profit and cash flow continue to strengthen
Diluted earnings per share rose 10% year-on-year to C$2.06, while adjusted diluted EPS increased 11% to C$2.08, or 12% on a constant currency basis.
Operating income advanced 9% to C$1.78 billion during the quarter.
The operating ratio, however, increased by 80 basis points to 62.5%, indicating slightly higher operating costs relative to revenue.
Record fuel efficiency and shareholder returns
CN generated free cash flow of C$1.84 billion during the first half of 2026, representing a 19% increase from the same period last year.
The company also repurchased approximately 2.9 million shares during the quarter for C$454 million and declared a third-quarter dividend of C$0.9150 per share.
Operationally, the railway achieved record fuel efficiency during both the second quarter and the first half of the year, while gross ton miles increased 3% to 121,082 million.