CN Rallies in the Snow: How This Railroad Mastered the Winter Storms – And Why Investors Should Take Note

Investors, let me tell you about a company that didn’t just survive a brutal winter—it thrived. Canadian National Railway (CNR) just reported Q1 2025 earnings that prove resilience in the face of adversity. Even as the Arctic bit into its operations, CN delivered a 4% revenue boost and an 8% jump in earnings per share. This isn’t just about dodging bad weather; it’s about execution, discipline, and a management team that’s got its act together.

Let’s start with the numbers. Revenue hit C$4.4 billion, operating income climbed to C$1.61 billion, and the operating ratio tightened to 63.4%—all while battling the worst winter in years. CEO Tracy Robinson deserves credit for calling out the weather as a headwind but framing the results as a testament to “agility and customer collaboration.” Translation: They didn’t just hunker down; they adapted.

But here’s the kicker——this isn’t a one-quarter wonder. Despite global trade headwinds and recession fears, CN is sticking to its guidance: 10%-15% adjusted diluted EPS growth in 2025. That’s no small promise. They’re investing C$3.4 billion in capital projects, which means they’re doubling down on infrastructure even as they face fuel inefficiencies (0.917 gallons per 1,000 GTMs) and longer dwell times.

Now, critics might point to those operational metrics as red flags. Fuel use and dwell time did rise compared to last year, likely due to icy tracks and slower movements. But here’s the thing: The operating ratio still improved. That means cost-cutting elsewhere—maybe in labor, maintenance, or logistics—offset the weather-driven inefficiencies. This isn’t a company scrambling to survive; it’s refining its playbook.

And let’s not forget the big picture. CN isn’t just a winter story—it’s a North American trade story. With ports like Vancouver and Chicago humming (when they’re not frozen), railroads are the backbone of moving goods. Even if the economy slows, you can’t stop the flow of oil, grain, and autos. CN’s 1% RTM growth might seem modest, but in a winter that paralyzed others, that’s a win.

BUT—investors, don’t get complacent. The report mentions “heightened recessionary risks” from global trade conflicts. If trade wars heat up, CN could see volume pressures. And those fuel and dwell metrics? They need to stabilize. Still, the stock’s valuation looks reasonable here. At around 17x trailing EPS, it’s cheaper than its 10-year average.

So what’s the verdict? CN is a classic “buy the dip” candidate. The winter was a test, and they passed it. With a management team that’s both pragmatic and aggressive on capital spending, and a long-term rail network that’s hard to replace, this is a name to watch. If you’re building a portfolio for 2025, CN isn’t just surviving—it’s laying track toward the future.

Final Call: BULLISH
CNR’s ability to grow earnings despite the worst winter in years, coupled with its steadfast capital spending and disciplined cost control, makes it a standout in the rail sector. While risks remain, the stock’s fundamentals—backed by an 8% EPS beat and a 63.4% operating ratio—suggest this is a locomotive ready to chug higher.