CN Predicts Strong Recovery in 2025 Despite Trade Uncertainty

CN expects a strong recovery in 2025 despite economic turbulence and potential U.S. tariff hikes. CEO Tracy Robinson remains confident that operational improvements and rising freight volumes will drive success. This was reported by the railway transport news portal Railway Supply.

CN Faces Market Challenges After a Tough Year

The Bank of Canada warns that new U.S. tariffs could trigger inflation and economic downturns. Trade disruptions may also slow growth, creating uncertainty in freight transportation and logistics markets.

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CN encountered major setbacks in 2024, significantly impacting revenue and operational efficiency. Work stoppages at key ports disrupted freight movement, while extreme cold delayed shipments nationwide.

A wildfire in Jasper, Alberta, further affected CN’s busiest rail corridor last summer. These disruptions resulted in a decline in earnings, forcing the company to reevaluate strategic priorities.

CN’s Strategy for a Stronger 2025

Despite setbacks, CN remains optimistic about 2025 financial performance across freight categories. The company expects volume growth in container shipments, petroleum, chemicals, and agricultural commodities.

Container shipping, CN’s largest revenue stream, declined due to weak consumer demand last quarter. However, grain and fertilizer transportation recorded slight increases, stabilizing overall revenue.

CN reported record-high grain shipments, driven by a strong wheat and canola harvest. Increased petroleum and chemical transport also contributed positively to earnings in challenging market conditions.

Analysts emphasize the importance of tariffs in shaping CN’s 2025 revenue outlook. Trade restrictions could reduce freight demand, affecting revenue potential and profitability this fiscal year.

Jeff Windau of Edward Jones highlighted that volume stability will determine CN’s growth trajectory. He noted that tariff enforcement levels will play a decisive role in market performance.

Despite market volatility, CN projects 10–15% earnings growth in 2025 with strong investments. The company announced a $3.4 billion capital investment plan to enhance operational efficiency.

Additionally, CN increased its dividend by 5%, reinforcing investor confidence and future stability. Analysts stress that success hinges on meeting financial targets and operational milestones.

RBC Dominion Securities analyst Walter Spracklin believes CN’s leadership team has a solid strategy. He emphasized that effective execution will be critical for maintaining the company’s market position.

CN’s financial report shows a 46% net income drop in Q4, totaling $1.15 billion. Revenue also fell 3% year-over-year, declining from $4.47 billion to $4.36 billion.

Diluted earnings per share dropped 10%, missing analyst expectations for the fourth quarter. Market forecasts predicted stronger performance, raising concerns about future financial stability.

Despite recent losses, CN remains confident in regaining momentum through strategic investments. Infrastructure expansion, technology upgrades, and operational improvements should help sustain growth.

With a focus on efficiency, CN aims to strengthen financial performance in 2025. Achieving revenue targets will be crucial for maintaining investor trust and market leadership.

Source, photo: halifax.citynews.ca

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