Q2 FY2026
Filed Jul 29, 2026CPKC reports strong Q2 results, poised for accelerated growth in second half of 2026
Revenue increased 13 percent and core adjusted diluted EPS increased 13 percent, while reported diluted EPS decreased 14 percent and both reported and core adjusted operating ratios increased by 90 basis points.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenuesGAAP | $4.2 billion | – | increased by 13 percent |
| Reported operating ratio (OR)GAAP | 64.6 percent | – | increased by 90 basis points |
| Core adjusted ORnon-GAAP | 61.6 percent | – | increased 90 basis points |
| Reported diluted EPSGAAP | $1.15 | – | decreased 14 percent |
| Core adjusted diluted EPSnon-GAAP | $1.27 | – | increased 13 percent |
| Volumes, as measured in revenue ton-milesother | increased 4 percent | – | increased 4 percent |
What drove it
- Volumes, as measured in revenue ton-miles, increased 4 percent.
- Management cited successful implementation of its North American strategy and synergy realization.
- Management cited improving freight fundamentals and disciplined cost control.
- Management stated that disciplined execution of Precision Scheduled Railroading produced excellent operating performance in the quarter.
Concerns
- Reported operating ratio increased by 90 basis points to 64.6 percent from 63.7 percent in Q2 2025.
- Core adjusted OR increased 90 basis points to 61.6 percent from 60.7 percent in Q2 2025.
- Reported diluted EPS decreased 14 percent to $1.15 from $1.33 in Q2 2025.
- The release identifies risks including changes in economic conditions, commodity demand, competition and pricing pressures, inflation, fuel prices, labour disruptions, trade restrictions, severe weather and cybersecurity attacks.
What to watch
- Whether volume and earnings growth accelerate in the second half of 2026, as management expects.
- The progression of operating ratio following the 90-basis-point increases in both reported and core adjusted OR.
- Realization of anticipated benefits and synergies of the CP-KCS combination.
- Freight fundamentals and the company’s ability to sustain disciplined cost control.
Analysis
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.
Management, verbatim
This unrivalled three-nation network and CPKC’s exceptional team of railroaders delivered another quarter of strong revenue and earnings growth.
Keith Creel, CPKC President and Chief Executive Officer
Our disciplined execution of Precision Scheduled Railroading produced excellent operating performance in the quarter. We are well-positioned to accelerate volume and earnings growth in the second half of 2026.
Keith Creel, CPKC President and Chief Executive Officer
Successful implementation of our North American strategy and synergy realization, improving freight fundamentals, and disciplined cost control position CPKC to continue delivering differentiated earnings growth and value creation over the long term.
Keith Creel, CPKC President and Chief Executive Officer
Not in the filing
stated, not guessed- Period-end date
- Segment revenue, segment volume and segment operating metrics
- Gross profit and gross margin
- Operating income
- Net income
- Reported and adjusted EPS reconciliation
- Cash from operations
- Free cash flow
- Capital expenditures
- Cash and cash equivalents
- Debt and net debt
- Share repurchases
- Dividends
- Quantitative forward guidance
- Prior-quarter comparisons
- Revenue ton-mile absolute value and prior-year revenue ton-mile value
- Reasons for the difference between reported diluted EPS and core adjusted diluted EPS
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.