Canadian Pacific Kansas City (CP) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenues rose 3% year-over-year to $3.7 billion, with diluted EPS up 37% to $1.33 and core adjusted EPS up 7% to $1.12, driven by strong grain, coal, and intermodal volumes and realized synergies.

• Operating ratio improved by 110 basis points to 63.7%, and core adjusted operating ratio to 60.7%.

• Net income attributable to controlling shareholders rose 36% to $1,234 million.

• Integration of operating systems in the U.S. and Canada achieved, restoring service and operational momentum.

• A $333 million pre-tax gain was recognized from the sale of a 50% equity stake in the Panama Canal Railway Company.

Financial highlights

• Total revenues reached $3,699 million, up 3% year-over-year; operating income increased 6% to $1,343 million.

• Adjusted diluted EPS rose 7% to $1.12; reported diluted EPS was $1.33.

• Adjusted free cash flow was $605 million, up from $526 million in Q2 2024.

• Dividends declared per share increased to $0.228 from $0.190 year-over-year.

• Share repurchases reached 16.4 million shares, about 44% of the current program.

Outlook and guidance

• 2025 guidance targets 10–14% growth in core adjusted diluted EPS over 2024’s $4.25.

• Management reaffirmed confidence in meeting full-year 2025 guidance, citing momentum from network integration and growth opportunities.

• Guidance for sub-60 operating ratio for the full year remains intact, with sequential improvements expected in Q3 and a step function improvement in Q4.

• 2025 core adjusted effective tax rate expected to be approximately 24.5%.

• Capital expenditures planned at $2.9 billion for 2025.