Canadian Pacific Kansas City (CP) Q4 2025 earnings summary

Executive summary

• Fourth quarter revenue reached $3.9B, up 1% year-over-year, with a record core adjusted operating ratio of 55.9% and core adjusted diluted EPS of $1.33, up 3%.

• Full year 2025 revenue was $15.1B, up 4%, with core adjusted diluted EPS of $4.61, up 8%, and reported diluted EPS of $4.51, up 13%.

• Record safety performance was achieved, with the lowest FRA-reportable train accident frequency among Class 1 railroads for the third consecutive year.

• Operational execution and cost control led to record margins, with unique self-help initiatives offsetting demand softness and continued synergy growth expected in 2026.

• Disciplined capital investment included the addition of 100 new locomotives in 2025, with another 100 scheduled for 2026.

Financial highlights

• Q4 2025 operating income rose 3% to $1.61B; full-year operating income up 8% to $5.61B.

• Q4 core adjusted operating ratio improved 120 bps to 55.9%; full-year core adjusted operating ratio improved 140 bps to 59.9%.

• Q4 net income attributable to controlling shareholders was $1.08B; full-year net income was $4.14B, up 11% year-over-year.

• Net cash from operating activities increased 1% to $5.31B; CapEx was $3.1B in 2025.

• Dividends declared per share increased to $0.228 in Q4 and $0.874 for the year; dividends paid totaled $796M.

Outlook and guidance

• 2026 guidance targets low double-digit core adjusted diluted EPS growth from 2025’s $4.61 and mid-single-digit volume growth in RTMs.

• Capital expenditures for 2026 are projected at $2.65B, a 15% reduction from 2025.

• New 5% share buyback program announced for 2026.

• Core adjusted effective tax rate expected at 24.75% for 2026.

• Long-term outlook (2024–2028) calls for high single-digit revenue growth, double-digit core adjusted EPS growth, and annual capex of $2.6–$2.8B.