$CP earnings report

CPKC reported third-quarter total revenues of $4,219 million, up 15% from $3,661 million, with freight revenues of $4,139 million up 15%. The growth was broad across key markets highlighted by management. Grain revenue increased 29% to $904 million, intermodal revenue increased 22% to $815 million, and metals, minerals and consumer products revenue increased 16% to $532 million. Traffic also advanced, with total revenue ton-miles up 6% and total carloads up 5%. Coal was flat at $254 million despite an 11% decline in revenue ton-miles, while automotive traffic measures also declined.

Pricing and mix supported revenue growth. Total freight revenue per revenue ton-mile increased 9% to 7.20 cents and freight revenue per carload increased 10% to $3,475. However, operating expenses rose 18% to $2,732 million, exceeding total revenue growth. Fuel expense increased 61% to $667 million as the average fuel price increased 53% to 4.49 U.S. dollars per U.S. gallon. Reported operating income still increased 11% to $1,487 million, but reported operating ratio increased 130 basis points to 64.8 percent. Core adjusted operating ratio increased 120 basis points to 61.9 percent, and the company stated that higher fuel prices unfavourably impacted reported and core adjusted operating ratio by 170 basis points and 190 basis points, respectively.

GAAP net income was $916 million, essentially unchanged from $917 million, and diluted EPS increased 3% to $1.04. Core adjusted diluted EPS increased 16% to $1.28. The difference reflects items excluded from the non-GAAP measure, including $94 million of KCS purchase accounting, $17 million of advisory costs related to rail consolidation matters, $12 million of acquisition-related costs, a $94 million income tax expense related to a CRA reassessment, and a $17 million income tax expense related to the SAT settlement. The effective income tax rate was 32.79%, compared with 24.34% in the prior-year quarter.

Cash generation strengthened, with net cash provided by operating activities of $1,550 million compared with $1,274 million, while additions to properties were $(613) million compared with $(860) million. CPKC returned capital through $1,487 million of share repurchases and $236 million of dividends paid in the quarter. Cash and cash equivalents were $399 million at September 30, 2026, while long-term debt maturing within one year and long-term debt were $3,613 million and $22,233 million, respectively. Management gave no numerical forward guidance in the supplied release but stated it remains on track to meet its commitments for 2026.

CPKC reported Q2 2026 revenues of $4.2 billion, up 13 percent from $3.7 billion in Q2 2025. Volumes, measured in revenue ton-miles, increased 4 percent. Management attributed the performance to its three-nation network, Precision Scheduled Railroading execution, North American strategy implementation, synergy realization and improving freight fundamentals.

The earnings result was mixed across reported and adjusted measures. Reported diluted EPS decreased 14 percent to $1.15 from $1.33 in Q2 2025, while core adjusted diluted EPS increased 13 percent to $1.27 from $1.12. The divergence between these measures is central to the quarter’s read, although the provided release excerpt does not include the non-GAAP reconciliation or specify the items affecting reported EPS.

Operating ratios moved unfavorably year over year despite management’s reference to disciplined cost control. Reported OR increased by 90 basis points to 64.6 percent from 63.7 percent, and core adjusted OR increased 90 basis points to 61.6 percent from 60.7 percent. Investors should focus on whether revenue and volume growth can translate into improved operating efficiency in subsequent periods.

Management stated that CPKC is positioned to accelerate volume and earnings growth in the second half of 2026. The filing provides no quantitative revenue, margin, expense, tax-rate, EPS, capital-expenditure or cash-flow outlook. It also cites continued realization of CP-KCS combination synergies as a long-term value-creation driver, while identifying exposure to demand, pricing, economic, labour, trade, fuel, weather and cybersecurity risks.