Canadian Pacific Kansas City 8-K

PositiveEarningsGuidance

Grain freight growth lifted revenue, but surging fuel costs pushed operating ratios higher.

Filed 2026-07-29 16:18 ET

Summary

Q2 2026 results with a qualitative second-half outlook. Revenue rose 13% and revenue ton-miles 4%; reported diluted EPS fell 14%, while core adjusted diluted EPS rose 13%. Management expects volume and earnings growth to accelerate in H2 2026, citing execution, improving freight fundamentals and cost control.

Key Figures

Amounts in Canadian dollars.

Metric Q2 2026 Q2 2025 Y/Y
Revenue $4.16B $3.70B 13%
Operating income $1.47B $1.34B 10%
Net income attributable to controlling shareholders $1.02B $1.23B (17%)
Diluted EPS $1.15 $1.33 (14%)
Core adjusted diluted EPS, non-GAAP $1.27 $1.12 13%
Operating cash flow $1.73B $1.36B 27%
Free cash flow (operating cash flow less investing cash used) $964M $1.05B (8%)
Adjusted free cash, non-GAAP $1.0B $605M 66%
Reported operating ratio 64.6% 63.7% +90 bp
Core adjusted operating ratio, non-GAAP 61.6% 60.7% +90 bp
  • Revenue growth included grain freight revenue up 24%; total revenue ton-miles increased 4%. Fuel expense rose 53%, contributing to higher operating expenses and the 90 bp increase in both reported and core adjusted operating ratios.
  • Net income declined partly because Q2 2025 included a $333M gain on sale of an equity investment; net interest expense also rose 14%.
  • Share repurchases totaled $1.30B for 10.9M shares, vs $1.40B for 12.9M shares a year earlier. Weighted-average diluted shares fell 4% to 887.1M. June 30 cash was $366M; debt carrying value, including current maturities, was $25.1B.

Guidance

Management expects H2 2026 volume and earnings growth to accelerate; no figures provided.

Investor Takeaways

  • Track whether H2 2026 volume and earnings growth accelerate from Q2’s 4% revenue ton-mile growth and 13% core adjusted diluted EPS growth.

The summary is written by an AI model reading the filing.

Model 005 · prompt 01d34d48e3

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