Canadian National Railway Q3 2026: A $118M Writedown Behind the EPS Miss
As seen on the 24/7 Wall St. homepage on October 30, 2026.
A $118 million writedown on scrapped IT projects drove this quarter's 26% EPS miss. Management still expects adjusted EPS growth at the upper end of its mid-to-high single-digit range for 2026, making the charge a one-off rather than a trend.
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Canadian National Railway reported adjusted EPS of $1.55 for Q3 2026, missing expectations. Revenue also came in below expectations, though the top line was still up 60% year over year.
The culprit was a $118 million asset impairment tied to scrapped dispatching and back-office IT project components, a charge management has explicitly characterized as non-recurring. Strip it out along with advisory costs related to the Union Pacific and Norfolk Southern merger STB review, and GAAP diluted EPS rises to $2.00.
Underneath the headline miss, freight trends were broadly constructive, with automotive revenue climbing 31% and a record third-quarter fuel efficiency reading. Coal and international intermodal were drags, with forest products also softer as higher cross-border tariffs and duties weighed on lumber and panel volumes.
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The company had tracked close to or ahead of estimates for the five quarters leading into Q3 2026, making this quarter an outlier. It reiterated full-year guidance for mid-to-high single-digit adjusted EPS growth and said it is tracking toward the upper end of that range.
Risks worth monitoring include ongoing Canada-U.S. trade tensions, a Moody's negative outlook shift on the company's A2 rating, and labor negotiations with the TCRC and USW whose contracts expire December 31, 2026. A fourth-quarter dividend of $0.6551 per share is scheduled for payment on December 30, 2026.
Mentioned: CNI