Canadian Pacific Kansas City 2025 Q2 Earnings Strong Performance with Net Income Rising 36.7%

Canadian Pacific Kansas City (CP) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. Despite facing several operational challenges, the company delivered a notable performance with a 36.7% increase in net income, reaching $1.23 billion. The revenue reached $3.70 billion, marking a growth of 2.7% compared to the previous year. Analysts had expected earnings per share of $0.82, but CP exceeded these expectations with $1.33 per share. The company maintained its guidance, projecting continued robust performance throughout 2025.

Revenue
In Q2 2025, Canadian Pacific Kansas City Limited reported a total revenue increase to $3.70 billion from $3.60 billion in Q2 2024. Freight revenue was a significant contributor, generating $3.63 billion, with grain and intermodal shipments bringing in $743 million and $684 million respectively. Other segments such as energy, chemicals, and plastics contributed $712 million, while automotive added $330 million. Coal revenue reached $256 million, alongside $167 million from potash and $98 million from fertilizers and sulphur. Forest products accounted for $195 million, and metals, minerals, and consumer products brought in $444 million. The non-freight segments excluding leasing revenues totaled $44 million, with leasing revenues contributing $26 million.

Earnings/Net Income
Canadian Pacific Kansas City's EPS rose by 38.1% to $1.34 in 2025 Q2, up from $0.97 in 2024 Q2, indicating robust earnings growth. The company's net income strengthened significantly, growing 36.7% to $1.23 billion compared to $903 million in the previous year. This consistent profitability reflects stable business performance, with EPS showcasing impressive growth.

Price Action
The stock price of Canadian Pacific Kansas City edged down 1.49% during the latest trading day, dropped 3.40% during the most recent full trading week, and declined 7.22% month-to-date.

Post-Earnings Price Action Review
The investment strategy of buying CP shares when earnings beat expectations and selling them after 30 days yielded moderate returns, although it underperformed against the benchmark. The strategy managed a return of 27.21%, trailing the benchmark by 21.93%. The maximum drawdown recorded was 0.00%, and the Sharpe ratio stood at 0.66, indicating a low-risk profile. However, the compound annual growth rate (CAGR) was notably lower than the benchmark's 49.14%, highlighting limited growth potential.

CEO Commentary
Keith Creel, CEO of Canadian Pacific Kansas City Limited, highlighted the company's strong growth trajectory, emphasizing its unique market positioning as the sole single-line transnational railway across North America. He acknowledged the current economic challenges but reaffirmed the commitment to continuous investments in infrastructure and logistics solutions to enhance service quality. Creel expressed confidence in meeting evolving customer demands while maintaining operational excellence.

Guidance
Canadian Pacific Kansas City anticipates sustained growth in operations and revenue streams. Management is guiding towards a strong performance for the rest of 2025, aiming to capitalize on its extensive network and strategic investments to seize market opportunities. The company is committed to enhancing shareholder value through consistent dividend payments and operational efficiencies.

Additional News
Canadian Pacific Kansas City has been actively involved in various strategic activities recently. On July 2, 2025, the company announced it would report its second-quarter results later in the month, reflecting transparency and proactive communication with stakeholders. Furthermore, CPKC declared a dividend, showcasing its commitment to returning value to shareholders. The company also launched a C$1.4 billion debt offering, underscoring its strategic financial maneuvers aimed at optimizing capital structure and supporting long-term growth objectives.