Canadian Pacific Kansas City Reports 3% Revenue Growth to $3.66 Billion in Q3 2025

Canadian Pacific Kansas City Limited (CPKC) reported a total revenue of $3,661 million for the third quarter of 2025, marking a 3% increase from $3,549 million in the same period last year. The growth was primarily driven by higher freight volumes, which increased by 4% to $3,589 million, despite a slight decline in freight revenue per revenue ton-mile (RTM). For the nine months ending September 30, 2025, total revenues reached $11,155 million, up 5% from $10,672 million in 2024. Net income attributable to controlling shareholders also rose to $920 million, a 10% increase from $837 million in the prior year, with diluted earnings per share improving to $1.01 from $0.90.

Operating expenses for the third quarter decreased slightly to $2,325 million from $2,346 million in 2024, resulting in an operating income of $1,336 million, up from $1,203 million. The operating ratio improved to 63.5%, a 260 basis point enhancement compared to 66.1% in the previous year. The company attributed these improvements to effective cost management and operational efficiencies, despite facing challenges such as inflation and increased workload.

Strategically, CPKC completed the sale of its 50% equity investment in the Panama Canal Railway Company for gross proceeds of U.S. $350 million, resulting in a pre-tax gain of $333 million. This transaction contributed positively to the company's financial performance and reflects its ongoing efforts to optimize its asset portfolio. Additionally, the company has been focusing on enhancing its operational capabilities, as evidenced by a 6% increase in gross ton-miles (GTMs) in the third quarter, driven by higher volumes in intermodal, grain, and automotive sectors.

In terms of operational metrics, CPKC reported an average employee count of 20,067, a slight decrease from 20,164 in the previous year, indicating a focus on efficiency. The company also noted a 5% increase in revenue ton-miles for the first nine months of 2025, reflecting strong demand across various freight categories. However, the company experienced a decline in non-freight revenues, which fell to $72 million in the third quarter from $88 million in 2024, primarily due to lower leasing revenues.

Looking ahead, CPKC anticipates continued growth driven by strong demand in its core freight business, although it remains cautious about potential market fluctuations and economic conditions. The company expects its core adjusted effective tax rate to stabilize around 24.50% for the remainder of the year. Overall, CPKC's strategic initiatives and operational improvements position it well for future growth, despite the challenges posed by external market factors.