CPKC second quarter delivers strong growth, carries momentum into second half of 2025
Executive Summary
- CPKC reported Q2 2025 revenue of $3.7 billion, a 3% increase YoY, and diluted EPS of $1.33 versus $0.97 in Q2 2024.
- Operating ratio improved to 63.7% (down 110 bps) and core adjusted operating ratio fell to 60.7% (down 110 bps), indicating higher efficiency.
- Net income attributable to controlling shareholders rose 37% YoY to $1.234 billion, driven by a $333 million gain on the sale of an equity investment and lower fuel costs.
Key Details
- Revenue & Volume
- Total revenues: $3,699 M (Q2) vs $3,603 M (Q2 2024).
- Freight revenue up 3% to $3,629 M; non‑freight $70 M.
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Revenue ton‑miles increased 7% YoY.
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Profitability
- Reported diluted EPS: $1.33 (up from $0.97).
- Core adjusted diluted EPS: $1.12 (up 7%).
- Operating income: $1,343 M (+6%).
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Net income attributable to controlling shareholders: $1,234 M (+37%).
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Cost Structure
- Compensation & benefits rose 8% YoY to $659 M.
- Fuel expense fell 13% YoY to $405 M (price per gallon down to US$2.77).
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Materials cost up 28% YoY to $124 M.
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Safety
- FRA‑reportable personal injury frequency improved to 0.77 (down from 0.84).
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FRA‑reportable train accident frequency increased to 0.97 (up from 0.70).
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Cash Flow & Balance Sheet
- Operating cash provided: $1,355 M (Q2) vs $1,278 M (Q2 2024).
- Net cash used in financing activities: $(901) M, reflecting share repurchases ($210 M) and debt repayments.
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Total assets: $85,180 M; total liabilities: $38,033 M; shareholders’ equity: $47,147 M.
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Significant One‑Time Items
- Gain on sale of equity investment (Panama Canal Railway stake): pre‑tax $333 M (after‑tax $196 M).
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Acquisition‑related costs for KCS integration: $19 M in Q2, partially offset by the gain above.
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Guidance & Outlook
- Management reaffirmed confidence in meeting full‑year guidance and sustaining momentum into H2 2025.
Notable Quotes
“Our exceptional team of railroaders again delivered strong operating and financial results… we are focused on delivering the service that our customers expect as we carry growing momentum into the second half of 2025.” – Keith Creel, President & CEO, CPKC