CPKC reports solid third quarter results: focused on growth for remainder of 2025

Executive Summary

• Canadian Pacific Kansas City (CPKC) reported solid third-quarter 2025 financial results, driven by a 5% increase in volumes and a 3% increase in revenues, while maintaining strong operational efficiency.
• The company reported diluted earnings per share (EPS) of $1.01 and core adjusted diluted EPS of $1.10, reflecting improved profitability despite challenging macroeconomic conditions.
• CPKC continues to execute on its strategy, with significant improvements in safety metrics and operating ratios, while maintaining full-year 2025 guidance.

Key Details

• Financial Performance (Q3 2025):
  • Total Revenues: $3.7 billion (up 3% from $3.5 billion in Q3 2024).
  • Freight Revenues: $3.589 billion (up 4% from $3.461 billion).
  • Net Income: $917 million.
  • Diluted EPS: $1.01 (up from $0.90 in Q3 2024).
  • Core Adjusted Diluted EPS: $1.10 (up 11% from $0.99 in Q3 2024).
  • Reported Operating Ratio (OR): 63.5% (decreased 260 basis points from 66.1% in Q3 2024).
  • Core Adjusted OR: 60.7% (decreased 220 basis points from 62.9% in Q3 2024).
• Operational Metrics:
  • Volumes (Revenue Ton-Miles): Increased 5% year-over-year.
  • Total RTMs: 54,200 million (up from 51,520 million).
  • Total Carloads: 1,132.2 thousand (up 4% from 1,092.1 thousand).
  • Gross Ton-Miles (GTMs): 100,310 million (up 6%).
  • Average Train Weight: 9,298 tons (up 2%).
  • Average Train Speed: 19.0 mph (up 1%).
• Safety Indicators:
  • FRA-reportable personal injury frequency: 0.92 (decreased from 0.95).
  • FRA-reportable train accident frequency: 1.15 (decreased from 1.43).
• Capital Allocation & Balance Sheet:
  • Share Repurchases: $1.8 billion in Q3 2025; $3.5 billion year-to-date.
  • Dividends Declared: $0.228 per share in Q3 2025.
  • Debt Issuance (YTD): Issued $500M 7-year notes, $600M 10.5-year notes, $300M 30-year notes, $600M 5-year notes, and $600M 10-year notes.
  • Debt Repayment (YTD): Repaid $642M (U.S.) of 10-year notes; repaid $500M term credit facility.
  • Commercial Paper: $1.138 billion outstanding at end of Q3.
• Significant Items & Adjustments:
  • Gain on Sale of Equity Investment: $333 million pre-tax gain recognized in Q2 2025 from the sale of the 50% interest in the Panama Canal Railway Company to APM Terminals for U.S. $344 million cash consideration.
  • Acquisition-Related Costs: $13 million in Q3 2025 (primarily synergy incentive compensation and system migration costs).
  • Casualty Expense: $39 million sequential increase in Q3 2025 vs Q2 2025, impacting EPS by $0.03.
• Commodity Performance (Q3 2025 vs Q3 2024):
  • Grain: $702M (+5%), 13,950M RTMs (+6%).
  • Coal: $255M (+3%), 6,081M RTMs (+2%).
  • Potash: $167M (+16%), 5,158M RTMs (+15%).
  • Intermodal: $668M (+7%), 9,679M RTMs (+11%).
  • Automotive: $343M (+3%), 1,514M RTMs (+9%).
  • Energy, Chemicals & Plastics: $701M (-2%), 9,400M RTMs (-2%).

Notable Quotes

• "CPKC once again created profitable, sustainable growth in the third quarter, while navigating challenging macroeconomic conditions," said Keith Creel, CPKC President and Chief Executive Officer. "Through our powerful network and unique partnerships, we are providing strong service and bringing innovative solutions to the market for our customers. I remain confident in our ability to continue delivering on our long-term value proposition."
• "Our team of dedicated railroaders across CPKC's unrivalled network continues to do what we said we would do, safely driving growth and opening new markets as we keep our commitments to our stakeholders. Through strong execution of our strategy, focused on leveraging our North American footprint, we continue to expect to deliver on our full-year 2025 guidance," Creel added.