Canadian Pacific Kansas City (NYSE:CP) Releases Earnings Results, Beats Estimates By $0.33 EPS

Key Points

• Canadian Pacific Kansas City beat earnings estimates: Adjusted EPS was $1.28 versus the $0.95 consensus, while quarterly revenue rose 15.2% year over year to approximately CAD 4.2 billion.
• Operational momentum remained strong, with 6% volume growth, improved train speed and dwell times, and management expecting a sub-60% operating ratio in the fourth quarter. A new five-year Elk Valley Resources agreement also provides additional coal-shipping visibility.
• Key risks include rising costs and safety concerns: Fuel expense increased 56%, adding pressure to margins, while personal injury frequency rose 20%. Shares fell 1.6% after the results, despite a “Moderate Buy” analyst consensus and an average price target of $111.83.

Canadian Pacific Kansas City (NYSE:CP - Get Free Report) TSE: CP issued its quarterly earnings data on Wednesday. The transportation company reported $1.28 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.95 by $0.33, Briefing.com reports. Canadian Pacific Kansas City had a return on equity of 9.02% and a net margin of 25.02%. The firm's quarterly revenue was up 15.2% compared to the same quarter last year. During the same quarter in the prior year, the business posted $1.10 earnings per share.

Here are the key takeaways from Canadian Pacific Kansas City's conference call:

• CPKC reported 6% volume growth, CAD 4.2 billion in revenue, a 61.9% core adjusted operating ratio, and 16% growth in adjusted EPS. Management said the company remains on track for mid-single-digit volume growth and a strong finish to the year.
• Operating performance improved across key metrics, including an 8% increase in train speed, 7% lower dwell, 10% higher car miles per car day, and 3% better fuel efficiency. CPKC also expects a sub-60% operating ratio in the fourth quarter.
• Commercial momentum remained broad-based, with record grain and intermodal performance, continued growth in the Canada-Mexico land bridge, and a new five-year Elk Valley Resources agreement that will return roughly half of certain coal traffic to CPKC’s network. Management highlighted additional opportunities in domestic intermodal, Mexico, Saint John, and port-related traffic.
• Higher fuel prices were a significant headwind, driving a 56% increase in fuel expense and adding 190 basis points to the quarterly adjusted operating ratio. Executives also acknowledged that elevated fuel surcharges are creating price sensitivity and may push some customers toward alternative transportation modes.
• Personal injury frequency rose 20% year over year to 1.12, despite a 60% improvement in train accidents. Management said the increase in employee injuries did not meet its safety standards and that corrective efforts would remain a priority.

Canadian Pacific Kansas City Stock Down 1.6%

Shares of CP stock traded down $1.48 on Wednesday, reaching $89.65. 3,569,142 shares of the stock were exchanged, compared to its average volume of 2,644,408. The company has a market capitalization of $78.45 billion, a price-to-earnings ratio of 28.83, a PEG ratio of 1.88 and a beta of 1.13. The business's 50 day moving average price is $88.98 and its 200 day moving average price is $85.73. The company has a current ratio of 0.59, a quick ratio of 0.50 and a debt-to-equity ratio of 0.47. Canadian Pacific Kansas City has a twelve month low of $68.42 and a twelve month high of $96.90.

Analysts Set New Price Targets

Several research analysts have weighed in on CP shares. Citizens Jmp assumed coverage on shares of Canadian Pacific Kansas City in a research note on Wednesday, July 15th. They set a "market perform" rating for the company. Wells Fargo & Company boosted their price target on shares of Canadian Pacific Kansas City from $90.00 to $100.00 and gave the company an "overweight" rating in a research note on Wednesday, July 8th. Zacks Research lowered shares of Canadian Pacific Kansas City from a "strong-buy" rating to a "hold" rating in a report on Monday. Scotiabank reaffirmed an "outperform" rating on shares of Canadian Pacific Kansas City in a research report on Thursday, July 16th. Finally, Royal Bank Of Canada reiterated an "outperform" rating on shares of Canadian Pacific Kansas City in a report on Thursday, September 24th. One equities research analyst has rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and four have issued a Hold rating to the company's stock. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $111.83.

Canadian Pacific Kansas City News Summary

Here are the key news stories impacting Canadian Pacific Kansas City this week:

• Positive Sentiment: CPKC reported third-quarter revenue of approximately $4.2 billion, while core adjusted diluted EPS rose to $1.28 from $1.10 a year earlier and exceeded the widely cited $0.95 consensus estimate by $0.33. Management said the company remains on track for a strong 2026 despite macroeconomic headwinds. CPKC reports solid third quarter results
• Positive Sentiment: CPKC signed a new five-year agreement with Elk Valley Resources, expanding its share of steelmaking-coal shipments from four British Columbia mines to Vancouver-area terminals. The deal provides longer-term freight volume visibility. CPKC and EVR renew and expand rail service agreement
• Positive Sentiment: The board declared a quarterly dividend of $0.268 per share, payable January 25, 2027, supporting the stock’s income appeal. CPKC declares dividend
• Neutral Sentiment: BlackRock disclosed a 5.02% ownership stake in Canadian Pacific Kansas City, indicating significant institutional participation but not necessarily a change in the company’s fundamentals. BlackRock ownership disclosure
• Negative Sentiment: Reported earnings were difficult to interpret: CPKC cited diluted EPS of $1.04 and adjusted EPS of $1.28, while a Zacks measure showed $0.91 per share versus a $0.94 estimate. The conflicting figures may have reduced the market’s enthusiasm. CPKC earnings estimate comparison
• Negative Sentiment: Zacks Research downgraded CP from “strong-buy” to “hold,” adding analyst-related pressure despite the company’s year-over-year revenue growth and adjusted earnings beat.

Canadian Pacific Kansas City Company Profile

Canadian Pacific Kansas City Limited NYSE: CP is a North American transportation company that operates Canadian Pacific Kansas City (CPKC), a Class I freight railway. The company was created in 2023 through the combination of Canadian Pacific and Kansas City Southern, forming the first single-line railroad connecting Canada, the United States and Mexico.

CPKC transports a broad range of freight, including grain and fertilizers, coal, forest products, automotive goods, energy and chemicals, industrial and consumer products, and intermodal shipments.

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