Despite mounting uncertainty over tariffs, trade policy, and the economy, most major railroads held firm on their 2025 outlooks — contrasting with a wave of guidance cuts across other industries.
Among the five publicly traded Class I railroads, Canadian National, Norfolk Southern, and Union Pacific kept their guidance intact, while Canadian Pacific Kansas City and CSX made slight downward adjustments during their first-quarter earnings calls over the past three weeks.
The guidance serves as a key barometer of executives’ confidence in market conditions.
CPKC maintained its forecast for mid-single-digit volume growth but trimmed its earnings guidance slightly, citing the impact of a stronger-than-expected Canadian dollar. (The company reports in Canadian dollars.)
“We’re undoubtedly off to a strong start in 2025 and we’re experiencing a strong start to the second quarter as well,” CEO Keith Creel said. “That being said, there’s certainly an undeniable macro-environment uncertainty that exists, trade policy uncertainty, and currency uncertainty. As such, based on what we do know today, we do feel it’s prudent and responsible to adjust our guidance at this time.”
Despite tariff risks to its cross-border network, CPKC still expects merger-related volume growth this year. It also aims to develop new traffic linking Canada and Mexico as the U.S. raises trade barriers.
“We stepped into this trade storm that we’re facing to become market makers. We’re seeing opportunities with new trade flows between Canada and Mexico,” Creel said. They include southbound shipments of refined fuels, LPGs, plastics, and grain and northbound moves of appliances, furniture, food products, finished vehicles, and auto parts.
Similarly, CSX still expects to see full-year volume growth, but withdrew prior guidance that put traffic gains in a range of 2% to 5%. Chief Commercial Officer Kevin Boone said freight demand remains strong despite the trade war that is creating economic uncertainty. The railroad also is banking on carload growth as new customer facilities open and ramp up production this year.
CPKC and CSX were far from alone as many major companies reduced their financial guidance or pulled it outright when announcing first-quarter earnings. Among the companies to suspend or reduce their outlooks: GM, Stellantis, UPS, JetBlue, Delta Air Lines, and Harley-Davidson.
CN projects that its revenue ton-miles will increase by 2% to 5% this year. Its forecast depends largely on support from new customer facilities coming online this year, as well as easy comparisons to last year, when labor unrest at the railway and Canadian ports dented volumes.
“There’s no question that uncertainty has increased over the last few months and we’re seeing a heightened risk of recession in both Canada and the U.S.,” CN CEO Tracy Robinson said. “Now it’s difficult to say what will happen from here. While we remain optimistic that the U.S. will ultimately reach trade agreements with Canada, China, and other countries, we don’t know what those deals will look like nor when they will happen. What we do know is that CN is well-positioned to enable global trade regardless of potential changes in trade patterns.”
NS is sticking with its forecast of 3% revenue growth for the year, along with 1.5 points of improvement to its operating ratio. “At this time, there’s no clear information on how tariffs may impact our end markets and revenues,” CEO Mark George said.
About 75% of Norfolk Southern’s traffic is domestic business. “How tariffs play out is going to be hard to say, but I don’t think it’s going to be as meaningful as the risk we have on the broader economy,” George said.
NS, which stumbled operationally for more than a year after the February 2023 hazardous materials derailment in East Palestine, Ohio, is now operating smoothly and regaining traffic lost to the highway and rival CSX.
“Our intense focus on recapturing market share gives us confidence that we are well-positioned to mitigate some of the uncertain market conditions that we see,” Chief Commercial Officer Ed Elkins said.
In affirming Union Pacific’s outlook for the year, Chief Financial Officer Jennifer Hamann said “it is likely going to be a bumpy ride.”
But CEO Jim Vena said that was no reason for UP to walk back its forecast, particularly since the railroad is operating well and handles products that consumers and industries use every day. “The easy thing would’ve been to come in this morning and just say, listen, there’s so much noise we’re pulling our guidance,” Vena said. “But we have a job to do and our job is to react to whatever’s thrown at us at Union Pacific.”
Traffic volume has continued to hold up so far in the second quarter, and Vena says trade policy will be sorted out sooner or later. “I’ve never bet against the United States economy or the United States in general,” he said. “So at the end of the day, I think we end up in a good place, whether that’s in a few weeks or whether that’s in six months.”
BNSF Railway, which is owned by conglomerate Berkshire Hathaway, will report its first quarter earnings over the weekend alongside its parent company.
Trump is over reaching with his executive orders. The courts will almost certainly end his tariff fiasco because there’s nothing in the Constitution or existing law that permits his total takeover of tariffs.
If the Republicans in Congress stood up to Trump’s destruction of the economy, maybe the Republicans would have half a chance of winning another election. As of now, they don’t. BTW I’m a Republican. I can’t stand Donald Trump.
As for what you say about the Constitution, it seems there aren’t many in Congress (either party) who have read it.
Robert I agree with you. But you’re assuming that the orange idiot king will abide by any court’s ruling whether it’s on trade, immigration, elections, etc. He’s testing the waters and believes that as with every other time in his life consequences don’t apply to him and so far he’s been correct. He’s never been held accountable for anything in his miserable life. As a matter of fact he’s been rewarded twice by a misinformed and gullible American public, many on this site, and elected as a dictator of America. tRump is doing exactly what he said he was going to do if elected and anyone that says they are surprised by his actions definitely had their heads stuck in the same place every publican in congress has theirs now.
The executives will always put lipstick on a pig… they want those $30M in stock options to be in the money and will lie to do so. They are dishonest with their shareholders, workers and the public. All the class 1s had a surge in Q4 and Q1 traffic as industry and retail built inventory in anticipation of our dear leader’s Liberation Day. That surge evaporates now. Revenue goes up because class 1s charge above inflation, with monopoly pricing power.
Starting next week, ship arrivals at LA/LB are down by a third. The cancellations work their way to the Gulf of MEXICO and east coast towards the end of the month. Then they’ll fire thousands of operating employees that will never return.
The knock-on effects to the whole economy then follow. At best, a recession at worst a very deep, long lasting recession.
As our dear leader advised parents that kids won’t got 30 dolls for Christmas and get 2 which cost a couple dollars more. An economic genius, like the class 1 executives!