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Canadian Pacific Kansas City Limited (CP) reported first-quarter 2025 earnings (excluding 6 cents from non-recurring items) of 74 cents per share, which came in line with the Zacks Consensus Estimate. The bottom line improved 7.3% on a year-over-year basis. Operating revenues of $2.64 billion missed the Zacks Consensus Estimate of $2.66 billion. However, the top line improved on a year-over-year basis.
In the reported quarter, total freight revenues per revenue ton miles increased 5% year over year. Total Freight revenues per carload increased 6% year over year.
Canadian Pacific Kansas City Limited Price, Consensus and EPS Surprise
Canadian Pacific Kansas City Limited price-consensus-eps-surprise-chart | Canadian Pacific Kansas City Limited Quote
On a reported basis, operating income increased 15%. Total operating expenses grew 5% year over year. The reported operating ratio (operating expenses as a percentage of revenues) fell 210 basis points to 65.3% from 67.4% in the year-ago quarter.
Keith Creel, CPKC president and chief executive officer, stated, “Our talented team of world-class railroaders executed our precision scheduled operating plan to safely and efficiently move solid freight demand to start 2025, producing strong first-quarter results amidst ongoing turbulent market and macroeconomic conditions. These first-quarter results demonstrate the power and resiliency of our unrivalled North American network.”
CP’s Segmental Highlights
Freight revenues, accounting for 98.2% of the top line, increased 8.7% to $3.72 billion. The actual figure surpassed our estimate of $3.5 billion.
CP’s Freight segment contains Grain (up 4%), Coal (up 21%), Potash (up 10%), Energy, chemicals and plastics (up 3%), Metals, minerals and consumer products (down 1%), Automotive (up 18%) and Intermodal (up 4%). Meanwhile, Fertilizers and Sulphur and Forest products grew 5% and 2%, respectively.
Other revenues increased 7.6% year over year in the first quarter of 2025.
CP’s Liquidity
CP exited the first quarter with cash and cash equivalents of C$695 million compared with C$739 million at the end of the prior quarter. Long-term debt amounted to C$21.1 billion compared with C$19.8 billion at the end of the fourth quarter of 2024.
CP’s Outlook
Due to ongoing tariff and trade policy uncertainty, Canadian Pacific Kansas City now expects 2025 core adjusted combined diluted earnings per share to grow in the 10-14% range (prior view: 12-18% range) from the 2024 actuals to C$4.25 per share.
Canadian Pacific Kansas City continues to expect 2025 RTMs to increase in the mid-single digits from the 2024 actuals on a combined basis.