Core Points - Canadian Pacific Kansas City (CPKC) has reached 13 new tentative collective agreements with various unions in the United States, covering multiple employee categories including carmen, hostlers, laborers, clerks, maintenance workers, and supervisors [1][5]. - The agreements include six tentative five-year contracts with the Brotherhood of Railway Carmen, covering 228 carmen across several properties [2]. - Five additional tentative five-year agreements have been established with the Transportation Communications Union and American Railway and Airway Supervisors Association, covering approximately 105 employees [3]. - Two more tentative agreements have been reached with the National Conference of Firemen and Oilers, covering 30 hostlers and laborers [4]. - CPKC President and CEO Keith Creel expressed satisfaction with the agreements, highlighting increased wages for employees and the collaborative effort with union leaders [5]. - The agreements are pending ratification by the union's membership [6]. Company Overview - CPKC is the first and only single-line transnational railway linking Canada, the United States, and Mexico, with a network stretching approximately 20,000 route miles and employing 20,000 railroaders [7]. - The company provides extensive rail service and logistics solutions across North America, aiming to grow alongside its customers [7].

Core Insights - Canadian Pacific Kansas City (CPKC) will participate in the 2025 Scotiabank Transportation & Industrials Conference on November 18, 2025, at 1 p.m. ET, with a live audio webcast available for investors [1] - CPKC is the first and only single-line transnational railway connecting Canada, the United States, and Mexico, covering approximately 20,000 route miles and employing 20,000 railroaders [2] - The company is focused on growth and has reported solid third-quarter results, indicating a positive outlook for the remainder of 2025 [3] Company Overview - CPKC's headquarters is located in Calgary, Alberta, Canada, and it provides extensive rail service and network reach across North America [2] - The company offers a range of freight transportation services, logistics solutions, and supply chain expertise to its customers [2] Financial Announcements - The Board of Directors of CPKC declared a dividend on October 29, 2025, as part of its financial announcements [4]

Group 1 - Canadian Pacific Kansas City (CP) was established in 1881 to connect rail services across Canada and later expanded into the U.S. market [1]

Group 1 - Canadian Pacific Kansas City (CP) has a historical foundation dating back to 1881, originally established to connect rail services across Canada [1] - The company expanded its operations into the U.S. market, indicating a strategic growth approach [1]

Group 1 - The article emphasizes the importance of in-depth research on various income alternatives, including REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs [1] - The author, Leo Nelissen, focuses on major economic developments related to supply chains, infrastructure, and commodities, aiming to provide insightful analysis and actionable investment ideas [1] - The analysis particularly highlights dividend growth opportunities as a key area of interest for investors [1] Group 2 - The article includes a disclosure of beneficial long positions in several companies, indicating a vested interest in the performance of ODFL, CSL, LB, TPL, RTX, GE, NOC, LHX, UNP, CP, and QXO [2] - It clarifies that the opinions expressed are solely those of the author and not influenced by any compensation from the companies mentioned [2] - The article also notes that past performance is not indicative of future results, emphasizing the need for individual assessment of investment suitability [3]

Core Viewpoint - The proposed merger between Union Pacific and Norfolk Southern, valued at $85 billion, is viewed negatively by Canadian railroads, including Canadian Pacific Kansas City and Canadian National, who argue it will harm the industry and reduce customer options [1][2]. Group 1: Industry Concerns - CPKC stated that the merger is "not in the public interest," "unnecessary," and would dominate rail transportation markets, limiting customer choices [2]. - CN's president emphasized that the industry does not require a merger to enhance service, advocating for more cooperation instead of consolidation [3]. - Both CPKC and CN have launched campaigns urging shippers to voice their opposition to the merger to the Surface Transportation Board (STB) [2][3]. Group 2: Regulatory Process - Union Pacific and Norfolk Southern plan to submit their merger application to the STB by early December, seeking to expedite the review process by requesting a 45-day reduction [4]. - The STB's review is anticipated to take between 17 to 22 months, with the timeline for shippers to file notices typically set for 45 days post-application submission [4]. - CPKC's CEO has called for a thorough review of the merger application, indicating that a comprehensive evaluation cannot be completed in less than 16 to 17 months [5][6].

Core Insights - Canadian Pacific Kansas City (CPKC) reported increased quarterly profits, with both volume and revenue rising despite economic uncertainties and trade tensions in North America [1] Financial Performance - Operating income rose by 11% to US$930 million, while revenue increased by 3% to US$2.65 billion [2] - Earnings per share grew by 12% to $0.72 [2] - The operating ratio improved by 2.6 points to 63.5%, with expenses declining by 1% [3] Volume and Revenue Growth - Overall volume increased by 5% when measured by revenue ton-miles and by 4% when measured by carloads and containers [3] - Bulk revenue ton-miles rose by 7%, driven by U.S. grain shipments to Mexico and strong demand for potash and coal [3] - Domestic intermodal volume increased by 13%, supported by new refrigerated shipments and cross-border traffic [4] - International intermodal volumes grew by 10%, benefiting from traffic from the Gemini alliance through various ports [6] Strategic Developments - CPKC and CSX plan to raise track speed to 49 miles per hour, enabling competitive intermodal and merchandise service between Dallas and Atlanta [5] - The acquisition of the Meridian & Bigbee short line in 2024 facilitated new network connections [5] Market Positioning - CPKC continues to achieve differentiated growth despite challenges in the freight environment, with mid single-digit volume growth and strategic pricing [7] - The company is well-positioned to outperform the industry, leveraging its unique synergies and resilient North American franchise [7]

Core Financial Performance - For the quarter ended September 2025, Canadian Pacific Kansas City (CP) reported revenue of $2.66 billion, reflecting a 2.2% increase year-over-year [1] - Earnings per share (EPS) for the quarter was $0.80, up from $0.73 in the same quarter last year [1] - The reported revenue was a surprise of -0.62% compared to the Zacks Consensus Estimate of $2.68 billion, while the EPS fell short by -1.23% against the consensus estimate of $0.81 [1] Key Metrics Analysis - Core adjusted operating ratio was reported at 60.7%, slightly above the five-analyst average estimate of 60.4% [4] - Revenue ton-miles (RTMs) for Intermodal reached 9.68 billion, exceeding the average estimate of 9.58 billion [4] - Total carloads were reported at 1.13 million, matching the four-analyst average estimate [4] Segment Performance - Carloads in the Energy, chemicals, and plastics segment totaled 139 thousand, slightly above the average estimate of 138.95 thousand [4] - Revenue ton-miles for Metals, minerals, and consumer products was 4.95 billion, surpassing the four-analyst average estimate of 4.75 billion [4] - Carloads for Grain were reported at 132.3 thousand, slightly below the average estimate of 133.62 thousand [4] Stock Performance - Shares of Canadian Pacific Kansas City have returned -0.2% over the past month, while the Zacks S&P 500 composite increased by +3.8% [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Canadian Pacific Kansas City (CP) reported quarterly earnings of $0.8 per share, slightly missing the Zacks Consensus Estimate of $0.81 per share, but showing an increase from $0.73 per share a year ago, indicating a mixed performance in earnings [1][2] Financial Performance - The company posted revenues of $2.66 billion for the quarter ended September 2025, which was below the Zacks Consensus Estimate by 0.62%, and an increase from $2.6 billion in the same quarter last year [2] - Over the last four quarters, Canadian Pacific Kansas City has surpassed consensus EPS estimates only once [2] Stock Performance - Since the beginning of the year, Canadian Pacific Kansas City shares have increased by approximately 2.8%, while the S&P 500 has gained 17.2%, indicating underperformance relative to the broader market [3] Future Outlook - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $1.00 for the coming quarter and $3.39 for the current fiscal year [7] - The estimate revisions trend for Canadian Pacific Kansas City was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell), suggesting expected underperformance in the near future [6] Industry Context - The Transportation - Rail industry, to which Canadian Pacific Kansas City belongs, is currently ranked in the bottom 9% of over 250 Zacks industries, which may negatively impact stock performance [8]

Financial Performance - Total revenues for Q3 2025 were $3,661 million, a 3% increase from $3,549 million in Q3 2024[83] - Diluted EPS for Q3 2025 was $1.01, up 12% from $0.90 in Q3 2024[83] - Core adjusted diluted EPS increased to $1.10, an 11% rise compared to $0.99 in Q3 2024[83] - The company reported a net income attributable to controlling shareholders of $920 million for Q3 2025, up from $837 million in Q3 2024[90] - The reported Diluted EPS for Q3 2025 was $1.01, compared to $0.90 in Q3 2024; for the nine months ended September 30, 2025, it was $3.32, up from $2.69 in 2024[197] - The Core Adjusted Diluted EPS for Q3 2025 was $1.10, compared to $0.99 in Q3 2024; for the nine months ended September 30, 2025, it was $3.28, up from $2.96 in 2024[197] Revenue Breakdown - Freight revenues for Q3 2025 were $3,589 million, a 4% increase from $3,461 million in Q3 2024[92] - Coal freight revenues for Q3 2025 increased to $255 million, up 3% from $248 million in Q3 2024, driven by higher volumes of Canadian coal[104] - Potash freight revenues for Q3 2025 rose to $167 million, a 16% increase from $144 million in Q3 2024, primarily due to higher export volumes to Vancouver and the U.S. Pacific Northwest[106] - Fertilizers and Sulphur freight revenues for Q3 2025 reached $102 million, up 12% from $91 million in Q3 2024, attributed to higher volumes of wet and dry fertilizers[108] - Forest Products freight revenues for Q3 2025 decreased to $193 million, down 3% from $198 million in Q3 2024, mainly due to lower volumes of wood pulp[110] - Energy, Chemicals and Plastics freight revenues for Q3 2025 fell to $701 million, a 2% decrease from $712 million in Q3 2024, primarily due to lower volumes of plastics and fuel oil[112] - Metals, Minerals and Consumer Products freight revenues for Q3 2025 increased to $458 million, a 3% rise from $443 million in Q3 2024, driven by higher volumes of frac sand[114] - Automotive freight revenues for Q3 2025 grew to $343 million, up 3% from $333 million in Q3 2024, primarily due to higher volumes from Mexico to Canada[116] Operating Efficiency - Operating ratio improved to 63.5%, a 260 basis point improvement from 66.1% in Q3 2024[83] - Total operating expenses for the third quarter of 2025 were $2,325 million, a slight decrease of 1% from $2,346 million in 2024[120] - The Core Adjusted Operating Ratio for Q3 2025 was 60.7%, compared to 62.9% in Q3 2024; for the nine months ended September 30, 2025, it was 61.3%, down from 62.9% in 2024[199] Cash Flow and Investments - Net cash provided by operating activities increased by $220 million in the first nine months of 2025 compared to the same period in 2024, primarily due to higher cash generating operating income[167] - Net cash used in investing activities decreased by $181 million in the first nine months of 2025, mainly due to proceeds from the sale of an equity investment of $493 million[169] - Net cash used in financing activities increased by $676 million in the first nine months of 2025, primarily due to share repurchases of $1,805 million[171] Tax and Interest Expenses - Income tax expense for the first nine months of 2025 was $945 million, a 16% increase from $813 million in 2024, primarily due to higher taxable earnings[141] - Net interest expense for the first nine months of 2025 was $646 million, an 8% increase from $598 million in 2024[138] Foreign Exchange and Market Risks - The company anticipates continued integration benefits and synergies from the CP-KCS combination, with a focus on operational efficiency and market expansion[204] - Forward-looking statements indicate potential impacts from changes in foreign exchange rates and commodity prices on future performance[205] - The Company is subject to market risks related to foreign exchange and share price fluctuations, which could impact earnings and stock-based compensation[209] - The Company faces various risks including inflation, geopolitical instability, and changes in laws and regulations that could impact operations and financial performance[207] Debt and Equity - As of September 30, 2025, long-term debt stood at CAD 21,450 million, an increase from CAD 19,618 million as of December 31, 2024, representing an increase of approximately 9%[184] - The company had a total of 900,831,248 common shares issued and outstanding as of October 28, 2025, with no preferred shares issued[185] Employee and Operational Metrics - The average number of employees decreased by 1% to 20,067 in Q3 2025, attributed to efficient resource planning[88] - Carloads decreased by 3.1 thousand to 182.4 thousand in the first nine months of 2025, representing a 2% decline[117]