Loading...
01/10 19:57
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals a positive outlook due to strong earnings growth, strategic partnerships, and operational improvements. Despite some concerns about competition and infrastructure, the company's robust grain and automotive segments, along with optimistic guidance and mid-teens EPS growth expectations, suggest a favorable stock price reaction. The Q&A section supports this positive sentiment with management's confidence in achieving growth despite challenges.
Revenue $3.7 billion, up 3% year-over-year. The increase was attributed to strong volume growth of 5% and diverse profitable growth across various areas, including automotive, bulk, and intermodal franchises.
Operating Ratio 60.7%, a 220 basis points improvement year-over-year. This improvement was driven by strong execution on the operating side and efficiency gains.
Earnings Per Share (EPS) $1.10, an increase of 11% year-over-year. The growth was supported by strong financial performance and operational improvements.
Freight Revenue Up 4% year-over-year on a 5% increase in RTMs. This was driven by strong growth in bulk and international intermodal, despite a 1% decline in cents per RTM due to mix changes.
Grain Revenue Up 4% year-over-year on 6% volume growth. U.S. grain volumes were up 13%, driven by strong growth in Mexico and the U.S. South, while Canadian grain volumes were down 2% due to lower carryout stocks and canola export demand.
Potash Revenue Up 15% year-over-year. The increase was driven by strong demand fundamentals and efficient potash export cycles.
Coal Revenue Up 3% year-over-year on 2% volume growth. Growth in Canadian met coal was partially offset by a facility outage in the U.S. coal franchise.
Energy, Chemicals & Plastics Revenue Down 2% year-over-year. The decline was due to softer base demand, lower crude and refined fuel volumes, and customs border challenges into Mexico, partially offset by increased LPG volumes.
Automotive Revenue Up 2% year-over-year on 9% volume growth. The growth was driven by a strong footprint serving production plants and auto compounds across North America.
Intermodal Revenue Up 7% year-over-year on 11% volume growth. Domestic intermodal volumes grew 13%, supported by new business growth and strong service performance.
Compensation and Benefits Expense $619 million, down year-over-year due to lower stock-based compensation and efficiency gains, partially offset by inflation and volume variable increases.
Fuel Expense $415 million, down 2% year-over-year. The decline was driven by the elimination of the Canadian federal carbon tax and volume variable increases.
Materials Expense $114 million, up 15% year-over-year. The increase was driven by a long-term parts agreement and higher materials expense, partially offset by reduced locomotive maintenance spend.
Equipment Rents Expense $109 million, up year-over-year due to increased car hire payments and inflation impacts from automotive volume growth.
Depreciation and Amortization Expense Up 6% year-over-year due to a larger asset base.
Purchase Services and Other Expense $565 million, down year-over-year due to lower casualty costs and productivity initiatives.
New Americold facility: Opened at Kansas City terminal, marking the first of several co-located facilities on the CPKC network.
Automotive franchise: Achieved another record quarter with strong performance.
Bulk franchise: Strong growth in grain and potash.
Intermodal growth: Strong domestic and international growth, supported by the new Americold facility and partnerships like Schneider.
Volume growth: Achieved 5% growth in the quarter.
Revenue growth: Increased to $3.7 billion, up 3% year-over-year.
Operational metrics: Improvements in terminal dwell (2%), velocity (1%), train length and weight (2%).
Safety performance: Improvements in FRA personal injuries and train accident frequencies.
Locomotive fleet: Received 91 of 100 Tier 4 locomotives, reducing service interruptions by 30%.
Industry consolidation stance: Opposes the proposed merger of UP and NS, citing risks of market concentration and supply chain implications.
North-South network focus: Emphasized unique growth prospects of its North-South U.S. network, unaffected by East-West merger proposals.
Industry Consolidation: The proposed merger between UP and NS could result in one single line railroad handling about 40% of the freight rail traffic in the United States. This introduces risks of heavily concentrating decision-making for the national rail network, with potential implications for the entire supply chain.
Regulatory Challenges: The company is actively participating in the regulatory process to address concerns about the proposed merger's impact on the industry, shippers, and the U.S. economy. Regulatory hurdles could pose challenges to the company's strategic objectives.
Macroeconomic Headwinds: Consistent macroeconomic and trade policy headwinds are impacting the company's operations, including tariffs on soybeans affecting grain exports and softer base demand in certain merchandise categories.
Supply Chain Disruptions: Customs border challenges going into Mexico have impacted refined fuel volumes, and a facility outage affected U.S. coal franchise operations during the quarter.
Competitive Pressures: The evolving trade policy and competition in the automotive and intermodal sectors could impact the company's growth prospects, despite its unique network advantages.
Operational Risks: While safety metrics have improved, the company acknowledges that safety is a continuous journey and challenges remain in achieving perfection. Additionally, the integration of Canadian and U.S. operating systems is ongoing, which could pose operational risks.
Earnings Growth: CPKC remains on track to deliver 10% to 14% earnings growth versus the previous year, with expectations of double-digit earnings growth for the full year.
Grain Franchise Outlook: The U.S. corn and soybean harvest is progressing strongly. Canadian grain volumes are expected to benefit from a new crop estimated at 78-80 million metric tons, above the 5-year average, supporting a strong close to the year.
Potash Growth: Potash revenues and volumes are expected to moderate in Q4 due to challenging comparisons, despite strong demand fundamentals.
Locomotive Fleet Expansion: CPKC plans to receive over 70 additional locomotives in 2026, enhancing efficiency and reliability, and supporting growth outlook.
Intermodal Growth: Domestic Intermodal growth is expected to continue, driven by partnerships with Schneider, new auto parts moves, and the Americold cold storage warehouse in Kansas City. International Intermodal growth is supported by diverse port access and strong service products.
Capital Expenditures: CPKC plans to invest approximately $2.9 billion in 2025, consistent with prior guidance.
Share Repurchase Program: CPKC has repurchased 34 million shares, representing 91% of the program announced in March, and continues to see strong value in its share price.
share repurchase program: We have continued to take advantage of the volatility in the market to reward shareholders with disciplined and opportunistic returns. We see strong value in our share price at current levels. As of the end of the third quarter, we've repurchased 34 million shares or approximately 91% of the program we announced in March.
The earnings call reveals a positive outlook due to strong earnings growth, strategic partnerships, and operational improvements. Despite some concerns about competition and infrastructure, the company's robust grain and automotive segments, along with optimistic guidance and mid-teens EPS growth expectations, suggest a favorable stock price reaction. The Q&A section supports this positive sentiment with management's confidence in achieving growth despite challenges.
The earnings call highlights strong financial performance, including revenue growth and improved operating ratios. The Q&A section reveals confidence in sustaining growth and strategic positioning amidst industry dynamics. Shareholder returns are enhanced by a share buyback and dividend increase. Despite some uncertainties around mergers, CP's strategic partnerships and growth prospects in bulk and intermodal volumes are promising. Overall, the positive aspects outweigh the concerns, suggesting a likely positive stock price movement.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
