Core Viewpoint - Canadian Pacific Kansas City Limited (CPKC) operates the only single-line rail network connecting Canada, the U.S., and Mexico, with approximately 20,000 miles of track [1] Company Overview - CPKC is classified as a Class I railroad, indicating its significant size and operational capacity within the North American rail industry [1] Market Position - The company plays a crucial role in linking three major North American economies, which may provide unique competitive advantages in logistics and transportation [1]

Core Insights - Canadian Pacific Kansas City (CPKC) reported higher fourth-quarter profits driven by improved freight volumes, with operating income growing 3% to US$1.19 billion and revenue increasing 1% to US$2.89 billion [2][3] Financial Performance - Operating income for the quarter increased by 3% to US$1.19 billion, while revenue rose by 1% to US$2.89 billion [2] - Earnings per share, adjusted for one-time items, increased by 3% to 98 cents [2] - The operating ratio reached a record low of 58.9%, reflecting a 0.8-point improvement compared to the fourth quarter of 2024 [3] Volume and Segment Performance - Overall freight volume remained flat based on revenue ton-miles but increased by 1% when measured by carloads and intermodal containers [3] - Growth was observed in coal and intermodal segments, while grain and potash carloads were flat, and other segments experienced declines [3] Market Challenges and Opportunities - U.S. tariffs are impacting CPKC's Canadian forest products traffic and cross-border steel shipments [4] - The company anticipates that forecasted bumper grain crops in Canada and the U.S. will enhance volumes in the upcoming year [4] Service Expansion - CPKC's Mexico Midwest Express intermodal service saw a 40% year-over-year volume increase in the fourth quarter [4] - The company plans to launch dedicated intermodal trains connecting Mexico and Dallas with Atlanta, Charlotte, and Jacksonville, with a potential customer planning to utilize the service for up to 80,000 loads per year [5][6] Strategic Outlook - CPKC's franchise has outperformed the industry in both revenue and earnings growth over the past two years, positioning the company for continued strong performance in 2026 [6]

Core Insights - Canadian Pacific Kansas City Limited (CP) is recognized as one of the 20 most profitable stocks over the last 20 years, ranking ninth on the list [1] - Scotiabank has raised its price target for CP from C$119 to C$124 while maintaining an Outperform rating [1] Group 1: Company Developments - CP is set to receive 70 Tier 4 locomotives from Wabtec and 30 from Progress Rail as part of its ongoing fleet renewal [2] - The company is investing approximately $800 million in U.S. manufacturing for this multi-year locomotive fleet renewal [2] - CP has already completed the purchase of 100 Tier 4 locomotives from Wabtec, with additional deliveries expected in 2026 [2] Group 2: Industry Position - CP operates a leading North American rail network that connects Canada, the United States, and Mexico, providing efficient freight transportation services [3]

Core Insights - Canadian Pacific Kansas City (CP) reported revenue of $2.81 billion for the quarter ended December 2025, reflecting a year-over-year increase of 1.6% but a surprise of -1.79% compared to the Zacks Consensus Estimate of $2.87 billion [1] - The earnings per share (EPS) for the same period was $0.95, which is an increase from $0.92 a year ago, but fell short of the consensus estimate of $0.99, resulting in an EPS surprise of -4.04% [1] Financial Performance Metrics - Revenue ton-miles (RTMs) for Intermodal was reported at 9.34 billion, below the average estimate of 9.64 billion from four analysts [4] - Total carloads were 1.13 million, slightly below the average estimate of 1.14 million [4] - The core adjusted operating ratio was 55.9%, better than the estimated 56.4% by four analysts [4] Segment Performance - Carloads in the Energy, chemicals, and plastics segment were 139.1 thousand, compared to the average estimate of 140.84 thousand [4] - Carloads for Grain were reported at 162.2 thousand, below the average estimate of 164.46 thousand [4] - Carloads for Coal were 127.6 thousand, exceeding the average estimate of 124.24 thousand [4]

Core Insights - The company anticipates a record Canadian grain harvest of 85 million metric tons for 2026, surpassing the previous record of 78 million metric tons, which is expected to drive volume growth [1] - Management projects mid-single-digit volume growth and low double-digit earnings growth for 2026, attributing this to company-specific factors rather than macroeconomic conditions [2] Financial Performance - For the full year 2025, revenue increased by 4% to CAD 15.1 billion, with a core adjusted operating ratio (OR) improving by 140 basis points to 59.9%, described as the "industry best" [3][7] - In Q4, revenue was CAD 3.9 billion, up 1% year-over-year, with a core adjusted OR of 55.9%, an improvement of 120 basis points, and core adjusted diluted EPS of CAD 1.33, up 3% from the previous year [4][7] Operational Metrics - Operational and safety metrics showed significant improvement, with network speed and locomotive productivity approximately 13% higher compared to 2023, and the company earned Amtrak's A-plus "Best Carrier" designation for the 10th consecutive year [5][9] - The company reported a Q4 FRA train accident frequency of 0.91, which is 12% better than the previous year, while personal injuries increased by 22% to 1.05 [10][11] Market and Segment Performance - The company experienced resilience in its business segments, with grain strength offsetting softness in other areas, leading to a 1% revenue increase despite flat revenue ton-miles [12] - Specific segment performances included a 4% revenue increase in grain, a 2% decline in potash, and a 3% increase in intermodal revenue driven by growth with ocean carrier partners [15] Capital Allocation and Future Plans - The company announced a 5% share buyback program for 2026 and plans to add 100 new locomotives, while reducing capital expenditures by 15% to CAD 2.65 billion [6][8][16] - Management expects continued growth in intermodal services, particularly with the MMX and planned SMX products, contributing to the volume growth outlook [2][6][17] Regulatory and Trade Considerations - Management addressed potential regulatory impacts, stating that reciprocal switching proposals should be fair and consider unintended consequences, while expressing confidence in the ongoing trilateral trade despite uncertainties [18][19]

分组1 - Canadian Pacific Kansas City (CP) reported quarterly earnings of $0.95 per share, missing the Zacks Consensus Estimate of $0.99 per share, but showing an increase from $0.92 per share a year ago, resulting in an earnings surprise of -4.04% [1] - The company posted revenues of $2.81 billion for the quarter ended December 2025, which was 1.79% below the Zacks Consensus Estimate and an increase from $2.77 billion year-over-year [2] - The stock has underperformed the market, losing about 1.2% since the beginning of the year compared to the S&P 500's gain of 1.9% [3] 分组2 - The current consensus EPS estimate for the coming quarter is $0.87 on revenues of $2.83 billion, and for the current fiscal year, it is $3.81 on revenues of $11.55 billion [7] - The Zacks Industry Rank for Transportation - Rail is currently in the bottom 16% of over 250 Zacks industries, indicating potential challenges for the sector [8] - Canadian National (CNI), a competitor in the same industry, is expected to report quarterly earnings of $1.43 per share, reflecting a year-over-year change of +10% [9]

Financial Data and Key Metrics Changes - For Q4 2025, revenue was CAD 3.9 billion, up 1% year-over-year, with an operating ratio of 55.9, reflecting a 120 basis points improvement. Earnings per share (EPS) was CAD 1.33, up 3% compared to the previous year [6][29] - For the full year 2025, revenue reached CAD 15.1 billion, an increase of 4%, with a volume growth of 4%. The operating ratio improved by 140 basis points to 59.9, and core EPS was CAD 4.61, up 8% [7][30] Business Line Data and Key Metrics Changes - In the bulk segment, grain revenues increased by 4% on 2% volume growth, driven by a record Canadian grain harvest of 85 million metric tons, up 20% from the previous year [20][22] - Potash revenues decreased by 2% despite a 2% volume growth, while coal revenue increased by 2% with a 1% decline in volumes [22][23] - The merchandise segment saw energy, chemicals, and plastics revenue down 3% on a 5% volume decline, while forest products revenue declined by 13% on a 12% decrease in volumes [23][24] Market Data and Key Metrics Changes - The intermodal segment experienced a revenue increase of 3% with a 4% volume growth, supported by strong performance from international intermodal volumes [26] - The automotive franchise reported a revenue decline of 3% despite a 1% volume growth, impacted by production slowdowns and supply chain challenges [25] Company Strategy and Development Direction - The company aims for mid-single-digit volume growth in 2026, driven by strong bulk business and unique growth drivers, including record grain harvests [8][10] - Continued investment in capital, including the addition of 100 new locomotives in 2026, is planned to support growth and improve operational efficiency [11][17] - The company is focused on executing its Precision Scheduled Railroading (PSR) model to maintain competitive advantages and improve margins [8][28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth outlook for 2026, emphasizing the strength of the grain harvest and the company's ability to control costs and execute its operational model [8][34] - The management acknowledged potential headwinds from macroeconomic conditions and trade policies but remains focused on what can be controlled [34] Other Important Information - The company announced a new 5% share repurchase program for 2026, reflecting confidence in its share price and commitment to returning cash to shareholders [33][34] - The company achieved record safety performance, with a train accident frequency of 0.91, which is 12% better than the previous year [15][16] Q&A Session Summary Question: Volume growth assumptions for 2026 - Management acknowledged challenges in Q1 but expressed confidence in mid-single-digit growth driven by grain and intermodal sectors, with synergies from previous wins contributing to this outlook [38][39] Question: Impact of reciprocal switching proposals - Management indicated that if service quality is maintained, there should be no concern regarding reciprocal switching proposals, emphasizing the importance of providing good service [46][47] Question: Operating ratio potential with mid-single-digit RTM growth - Management discussed the goal of achieving continuous improvement in operating ratio, targeting around 100 basis points improvement per year, supported by strong pricing and volume growth [51][56] Question: Revenue and volume mix for 2026 - Management highlighted potential headwinds in early 2026 due to tariffs and macroeconomic factors but expects stabilization and growth as the year progresses [60][62]

Financial Data and Key Metrics Changes - For Q4 2025, revenue was CAD 3.9 billion, up 1% year-over-year, with an operating ratio of 55.9, reflecting a 120 basis point improvement. Earnings per share (EPS) was CAD 1.33, up 3% from the previous year [6][29] - For the full year 2025, revenue reached CAD 15.1 billion, a 4% increase, with a volume growth of 4%. The operating ratio improved by 140 basis points to 59.9, and core EPS was CAD 4.61, up 8% [7][30] Business Line Data and Key Metrics Changes - In the bulk segment, record grain revenues increased by 4% on 2% volume growth, driven by a record harvest in Canada [20] - Potash revenues decreased by 2% despite a 2% volume growth, while coal revenue increased by 2% despite a 1% decline in volumes [22][23] - The merchandise franchise saw a 3% decline in energy, chemicals, and plastics revenue due to lower volumes, while automotive revenue decreased by 3% despite a 1% volume growth [24][25] - Intermodal revenue increased by 3% on 4% volume growth, with international intermodal volumes up 5% [26] Market Data and Key Metrics Changes - Canadian grain volumes were up 2% due to a record harvest, while U.S. grain volumes also increased by 2% [20] - The North American crop for 2026 is expected to be a record, with estimates of an 85 million metric ton Canadian harvest, up 20% from last year [21] Company Strategy and Development Direction - The company aims for mid-single-digit volume growth in 2026, driven by strength in the bulk business and unique growth drivers [8] - Continued investment in capital, including 100 new locomotives in 2026, supports growth and operational efficiency [11] - The company is focused on executing its Precision Scheduled Railroading (PSR) model to maintain competitive advantages [8][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving low double-digit earnings growth in 2026, despite macroeconomic uncertainties [34] - The company highlighted its strong operational performance and cost control measures in response to demand softness [28] Other Important Information - The company announced a new 5% share repurchase program for 2026, reflecting its commitment to returning cash to shareholders [34] - The operating team achieved record safety performance, with a train accident frequency of 0.91, which is 12% better than the previous year [15][16] Q&A Session Summary Question: Can you elaborate on the mid-single-digit volume growth assumption? - Management acknowledged challenges in Q1 but expressed optimism about grain volumes and synergies from previous wins contributing to growth [38][39] Question: What are the implications of reciprocal switching proposals? - Management indicated that providing good service mitigates concerns about competition from reciprocal switching, emphasizing the importance of service quality [46][47] Question: How does the company view the operating ratio potential moving forward? - Management aims for continuous improvement in operating ratio, targeting around 100 basis points of improvement per year with strong volume and pricing [51][56] Question: What impact might the harbor maintenance tax exemption have on cross-border volumes? - Management noted that cross-border volume is currently a small part of the business, so changes in the harbor maintenance tax are not a significant concern [77] Question: What are the updated thoughts on M&A and the recent application rejection? - Management reiterated that the rejection highlights the complexity of mergers and the need for factual support for any future applications [81][82]

Financial Data and Key Metrics Changes - For Q4 2025, revenue was CAD 3.9 billion, up 1% year-over-year, with an operating ratio of 55.9, representing a 120 basis points improvement. Earnings per share (EPS) was CAD 1.33, up 3% from the previous year [4][6] - For the full year 2025, revenue reached CAD 15.1 billion, an increase of 4%, with a volume growth of 4%. The operating ratio improved by 140 basis points to 59.9, and core EPS was CAD 4.61, up 8% [5][27] Business Line Data and Key Metrics Changes - Bulk business saw record grain revenues up 4% on 2% volume growth, driven by a record Canadian grain harvest of 85 million metric tons, up 20% from last year [19][20] - Potash revenues decreased by 2% despite 2% volume growth, while coal revenue increased by 2% despite a 1% decline in volumes [20][21] - Merchandise franchise revenues declined by 3% due to a 5% volume decline in energy, chemicals, and plastics, and a 13% decline in forest products revenue due to tariffs [22][23] Market Data and Key Metrics Changes - The intermodal segment experienced a revenue increase of 3% with a 4% volume growth, driven by strong performance from international intermodal volumes [24] - The automotive segment saw a revenue decline of 3% despite a 1% volume growth, impacted by production slowdowns and supply chain challenges [23] Company Strategy and Development Direction - The company aims for mid-single-digit volume growth in 2026, supported by strong bulk business and unique growth drivers, while continuing to execute its Precision Scheduled Railroading (PSR) model [6][10] - A 5% share buyback program was announced for 2026, reflecting the company's commitment to returning cash to shareholders [10][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth opportunities in 2026, particularly in grain and intermodal sectors, despite macroeconomic challenges [6][10] - The company is focused on controlling costs and improving operational efficiency, with expectations for low double-digit earnings growth [32] Other Important Information - The company achieved record safety performance and operational metrics, including train speed and locomotive productivity, contributing to its competitive advantage [12][14] - The company is investing in new locomotives, with 100 new units scheduled for delivery in 2026, enhancing fleet efficiency [10][16] Q&A Session Summary Question: Volume growth assumptions for 2026 - Management acknowledged the challenges in Q1 but expressed confidence in grain and bulk business growth, citing strong customer feedback and upcoming opportunities [35][36] Question: Impact of reciprocal switching proposals - Management indicated that if service quality is maintained, reciprocal switching would not pose a significant threat, emphasizing the importance of providing good service [44][45] Question: Operating ratio potential with mid-single-digit RTM growth - Management discussed the potential for continued improvement in operating ratio, aiming for 100 basis points improvement per year if operational efficiencies are maintained [50][54] Question: Revenue bridge from volume to revenue - Management highlighted that while there may be headwinds in early 2026, strong bulk business and tariff impacts would stabilize revenue growth later in the year [58][60]

Canadian Pacific Kansas City reported fourth quarter revenues that were 1% higher at $3.9 billion from a year ago, but saw unadjusted earnings per share fall to $1.20 from $1.28 y/y. The Calgary-based railroad (NYSE: CP) said core adjusted diluted EPS was $1.33, up 3% from $1.29 in Q4 2024. The operating ratio improved 80 basis points to 58.9%, a network record, along with historic marks in train weights, network speed, locomotive productivity and car miles per car day. “Our fourth quarter and full-yea ...