Canadian Pacific Kansas City Reports 3% Revenue Growth and Increased Net Income in Q2 2025

Canadian Pacific Kansas City Limited (CPKC) reported its financial results for the second quarter of 2025, revealing total revenues of $3,699 million, a 3% increase from $3,603 million in the same period of 2024. The growth was primarily driven by higher freight volumes, which increased revenue per ton-miles, despite a decrease in freight revenue per revenue ton-mile. The company’s net income attributable to controlling shareholders rose to $1,234 million, compared to $905 million in the prior year, resulting in basic earnings per share of $1.34, up from $0.97.

In the first half of 2025, CPKC's total revenues reached $7,494 million, a 5% increase from $7,123 million in the first half of 2024. The operating income also improved, rising to $2,660 million from $2,416 million year-over-year. The operating ratio improved to 63.7%, a 110 basis point enhancement from 64.8% in the previous year, indicating better operational efficiency. The core adjusted diluted earnings per share increased to $1.12, reflecting a 7% rise from $1.05 in the same period of 2024.

Strategically, CPKC completed the sale of its 50% equity investment in the Panama Canal Railway Company for gross proceeds of U.S. $350 million on April 1, 2025, resulting in a pre-tax gain of $333 million. Additionally, the company entered into new four-year collective agreements with the Teamsters Canada Rail Conference, which include annual wage increases of 3% effective from January 1, 2024, to December 31, 2027.

Operationally, CPKC reported an increase in gross ton-miles (GTMs) of 6% in the second quarter, driven by higher volumes in grain, intermodal, potash, and coal. The average number of employees decreased slightly to 20,138 from 20,441 in the previous year, reflecting efficient resource planning. The company also noted a decrease in fuel expenses due to lower fuel prices, which contributed to a reduction in total operating expenses, despite increases in compensation and benefits costs.

Looking ahead, CPKC anticipates continued growth driven by increased freight volumes and operational efficiencies. The company expects its core adjusted effective tax rate to remain around 24.50% for the remainder of 2025. CPKC's management remains focused on integrating the Kansas City Southern acquisition and optimizing its operations across North America, while also navigating the impacts of fluctuating fuel prices and foreign exchange rates on its financial performance.