Core Viewpoint - Canadian Pacific Kansas City (CPKC) is not interested in participating in immediate rail industry consolidation, believing that further consolidation is unnecessary for the current industry structure [1][2][3] Industry Perspective - CPKC argues that major rail mergers pose unique risks to customers, employees, and the broader supply chain, which would be exacerbated by follow-on consolidations [2][3] - The existing six major railways in the U.S. can provide high-quality transportation services, and there are opportunities for cooperation among willing railways to enhance service without further consolidation [3][5] - CPKC emphasizes that benefits often cited in favor of transcontinental mergers can be achieved through new partnerships and innovations in customer service [4][5] Company Strategy - CPKC is focused on leveraging its three-nation network to deliver unique value-creating opportunities and improve interline service options for shippers across North America [1][4] - The company is pursuing collaborations, such as the Southeast Mexico Express service with CSX, to enhance service offerings [4] - CPKC believes that the current rail network has the capacity and operational fluidity to support service improvements and volume growth, which is essential for the national economy [5]

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Group 1 - Canadian Pacific Kansas City (NYSE: CP) is entering a significant multi-year growth phase [1] - The latest quarterly results showed a revenue miss, which could be perceived as disappointing [1] Group 2 - The company has a diverse financial analysis background, with experience across various sectors including Auto, Industrials, and IT [1] - The company has managed investor relations and strategic finance for a listed IT company with a market cap of approximately USD 2.5 billion [1]

Group 1 - The article promotes a research service focused on various income-generating investment vehicles such as REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs, highlighting its extensive research capabilities and positive user testimonials [1] - It mentions that there are 438 testimonials, with most being rated 5 stars, indicating high customer satisfaction and trust in the service [1] Group 2 - The article includes a disclosure from the analyst stating a beneficial long position in several companies, which may influence the analysis presented [2] - It clarifies that the opinions expressed are those of the author and not influenced by compensation from any mentioned companies, ensuring transparency in the analysis [2] Group 3 - The article contains a disclaimer from Seeking Alpha, emphasizing that past performance does not guarantee future results and that no specific investment advice is being provided [3] - It notes that the views expressed may not reflect those of Seeking Alpha as a whole, indicating a diversity of opinions among its analysts [3]

Group 1 - The article emphasizes the opportunity to enhance holdings during periods of elevated market volatility, particularly in the first half of the year [1] - It highlights the availability of in-depth research on various investment vehicles including REITs, mREITs, Preferreds, BDCs, MLPs, and ETFs [1] Group 2 - The analyst has disclosed a beneficial long position in shares of companies such as LB, UNP, CP, and CSL, indicating a personal investment interest [2] - The article expresses the author's opinions without any compensation from the companies mentioned, ensuring an independent viewpoint [2]

Group 1 - The stock of Canadian Pacific Kansas City Limited (CP) is experiencing significant attention due to high implied volatility in the options market, particularly the Sep 19, 2025 $50 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant price change or an upcoming event that could lead to a major rally or sell-off [2] - Canadian Pacific currently holds a Zacks Rank 3 (Hold) in the Transportation - Rail industry, which is in the top 40% of the Zacks Industry Rank, with mixed analyst earnings estimates affecting the consensus estimate for the current quarter [3] Group 2 - The high implied volatility surrounding Canadian Pacific shares may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay [4]

Core Insights - Americold Realty Trust has opened a new Import-Export Hub in Kansas City, Missouri, with an investment exceeding $100 million, enhancing its logistics capabilities in temperature-controlled services [1][2]. Group 1: Facility Details - The new facility spans 335,000 square feet and is Americold's first on the Canadian Pacific Kansas City (CPKC) rail network, serving as a key hub for the Mexico Midwest Express (MMX), the only single-line rail service for refrigerated goods between the U.S. and Mexico [2]. - Key features of the hub include on-site USDA inspections to eliminate border delays, a load capacity exceeding 50,000 pounds per container to reduce highway congestion, and a 300-mile service radius to support regional food flow [3]. Group 2: Strategic Importance - The hub is designed to be a strategic consolidation point for longer-haul shipments, particularly for customers facing border inefficiencies or trucking capacity challenges, thereby improving the overall supply chain for temperature-controlled products across North America [3][4]. - The facility represents a collaboration between Americold and CPKC, aiming to create a new North American cold chain that enhances the efficiency of food movement from producers to consumers [4]. Group 3: Economic Impact - The project is expected to create nearly 190 new jobs and significantly enhance regional and cross-border food logistics, contributing to the local economy [5]. - Local officials, including the Mayor of Kansas City and the Governor of Missouri, have highlighted the importance of this investment in strengthening the logistics infrastructure and creating opportunities for local talent [6]. Group 4: Company Background - Americold is a global leader in temperature-controlled logistics and real estate, with over 230 facilities across North America, Europe, Asia-Pacific, and South America, totaling approximately 1.4 billion refrigerated cubic feet [7]. - The company focuses on connecting producers, processors, distributors, and retailers with tailored, value-added services supported by responsive and reliable supply chains [8].

Core Insights - Canadian Pacific Kansas City Limited (CP) reported disappointing second-quarter 2025 results, with both earnings and revenues falling short of the Zacks Consensus Estimate [1][9] Financial Performance - The quarterly earnings, excluding 15 cents from non-recurring items, were 81 cents per share, missing the Zacks Consensus Estimate by 1.2%, but improved 5.2% year-over-year [2] - Operating revenues totaled $2.67 billion, lagging the Zacks Consensus Estimate by 4.3%, yet showing a year-over-year increase of 1.5% [2] - Total Freight revenues per revenue ton miles decreased by 4% year-over-year, while total Freight revenues per carload declined by 3% year-over-year [2] Operating Metrics - On a reported basis, operating income increased by 6%, with total operating expenses growing by 0.9% year-over-year [3] - The operating ratio improved, falling 110 basis points to 63.7% from 64.8% in the same quarter last year [3] Segment Performance - Freight revenues, which accounted for 98.1% of total revenues, increased by 2.7%, driven by growth in Grain (up 12%) and Intermodal (up 9%), while significant declines were noted in Automotive (down 28%) and Metals, minerals and consumer products (down 20%) [4] - Other revenues rose by 1.3% year-over-year in the second quarter of 2025 [4] Liquidity Position - At the end of the second quarter, CP had cash and cash equivalents of C$799 million, up from C$739 million at the end of December 2024 [5] - Long-term debt increased to C$21.23 billion from C$19.8 billion at the end of the fourth quarter of 2024 [5] Future Outlook - CP expects 2025 core adjusted combined diluted earnings per share to grow in the range of 10-14% from 2024 actuals, targeting C$4.25 per share [6] - The company anticipates mid-single-digit growth in 2025 revenue ton miles (RTMs) compared to 2024 actuals [6] - Capital expenditures for the full year are projected to be C$2.9 billion, with a core adjusted effective tax rate expected at 24.5% [6]

Core Insights - Canadian Pacific Kansas City (CP) reported $2.67 billion in revenue for Q2 2025, a year-over-year increase of 1.5% [1] - The company's EPS for the same period was $0.81, up from $0.77 a year ago, but below the consensus estimate of $0.82, resulting in an EPS surprise of -1.22% [1] - The reported revenue fell short of the Zacks Consensus Estimate of $2.79 billion, leading to a revenue surprise of -4.08% [1] Financial Performance Metrics - Adjusted Operating Ratio was 60.7%, slightly above the average estimate of 60.6% based on six analysts [4] - Total carloads reached 1.15 million, exceeding the five-analyst average estimate of 1.13 million [4] - Specific carload metrics included: - Energy, Chemicals and Plastics: 142.7 thousand vs. 141.97 thousand estimated [4] - Intermodal: 459.5 thousand vs. 443.31 thousand estimated [4] - Automotive: 62.4 thousand vs. 67.08 thousand estimated [4] - Metals, Minerals and Consumer Products: 125.4 thousand vs. 129.47 thousand estimated [4] - Forest Products: 32.8 thousand vs. 33.87 thousand estimated [4] - Fertilizers and Sulphur: 15.6 thousand vs. 17.18 thousand estimated [4] - Potash: 47.4 thousand vs. 51.05 thousand estimated [4] - Coal: 118.6 thousand vs. 114.56 thousand estimated [4] - Grain: 142.6 thousand vs. 136.15 thousand estimated [4] - Revenue ton-miles (RTMs) for Automotive were 1.42 billion, surpassing the estimated 1.34 billion [4] Stock Performance - Shares of Canadian Pacific Kansas City have returned -5.3% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited interim consolidated financial statements for Q2 and H1 2025 report increased net income, strong operating cash flow, and total assets of $85.2 billion [Interim Consolidated Statements of Income](index=4&type=section&id=Interim%20Consolidated%20Statements%20of%20Income) CPKC reported increased Q2 2025 revenues and operating income, with net income significantly rising to $1,234 million, partly due to an equity investment sale | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,699 | $3,603 | $7,494 | $7,123 | | **Operating Income** | $1,343 | $1,267 | $2,660 | $2,416 | | **Net Income Attributable to Controlling Shareholders** | $1,234 | $905 | $2,144 | $1,680 | | **Diluted Earnings Per Share** | $1.33 | $0.97 | $2.31 | $1.80 | - A pre-tax gain of **$333 million** was recognized from the sale of an equity investment, significantly boosting income before tax[10](index=10&type=chunk) [Interim Consolidated Statements of Comprehensive Income](index=5&type=section&id=Interim%20Consolidated%20Statements%20of%20Comprehensive%20Income) The company reported a Q2 2025 comprehensive loss of $522 million, primarily due to a significant net loss in foreign currency translation adjustments | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $1,234 | $903 | $2,143 | $1,677 | | **Other Comprehensive (Loss) Income** | ($1,756) | $313 | ($1,784) | $1,031 | | *Net (loss) gain in foreign currency translation* | *($1,729)* | *$301* | *($1,758)* | *$1,000* | | **Comprehensive (Loss) Income** | ($522) | $1,216 | $359 | $2,708 | [Interim Consolidated Balance Sheets](index=6&type=section&id=Interim%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$85.18 billion**, with corresponding reductions in total liabilities and equity, primarily due to decreases in Goodwill and Properties | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $85,180 | $87,744 | | Cash and cash equivalents | $799 | $739 | | Properties | $54,458 | $56,024 | | Goodwill | $18,352 | $19,350 | | **Total Liabilities** | $38,033 | $38,854 | | Long-term debt (incl. current) | $22,269 | $22,623 | | **Total Equity** | $47,147 | $48,890 | [Interim Consolidated Statements of Cash Flows](index=7&type=section&id=Interim%20Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 saw **$2.51 billion** in net cash from operations, with investing activities using **$1.02 billion** and financing activities using **$1.39 billion**, largely due to share repurchases offset by new debt | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $2,511 | $2,293 | | **Net cash used in investing activities** | ($1,021) | ($1,324) | | *Proceeds from sale of equity investment* | *$493* | *—* | | **Net cash used in financing activities** | ($1,385) | ($895) | | *Purchase of Common Shares* | *($1,740)* | *—* | | *Issuance of long-term debt* | *$3,102* | *—* | | **Net increase in cash and cash equivalents** | $60 | $93 | [Notes to Interim Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Interim%20Consolidated%20Financial%20Statements) The notes detail key events including the sale of Panama Canal Railway Company for a **$333 million** gain, issuance of **$3.1 billion** in new debt, **$1.77 billion** in share repurchases, and ongoing litigation - On April 1, 2025, CPKC sold its 50% equity investment in the Panama Canal Railway Company for gross proceeds of U.S. **$350 million**, recognizing a pre-tax gain of **$333 million**[23](index=23&type=chunk) - During H1 2025, the company issued multiple unsecured notes, including U.S. **$1.2 billion** and C**$1.4 billion** in new debt[36](index=36&type=chunk)[37](index=37&type=chunk) - Under its Normal Course Issuer Bid (NCIB), the company repurchased **16,363,112** common shares for **$1,773 million** in H1 2025[49](index=49&type=chunk)[51](index=51&type=chunk) - The company is involved in ongoing legal proceedings related to the 2013 Lac-Mégantic derailment, with plaintiffs having filed for leave to appeal to the Supreme Court of Canada after lower courts dismissed claims against CPKC[63](index=63&type=chunk) - CPKC is challenging a 2014 tax assessment from Mexican authorities (SAT) amounting to approximately **$451 million** as of June 30, 2025, and expects to prevail on the technical merits of its case[68](index=68&type=chunk)[71](index=71&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights a **3%** Q2 2025 revenue increase to **$3.7 billion**, **37%** diluted EPS growth, and an improved operating ratio, driven by volume gains and controlled expenses [Executive Summary](index=19&type=section&id=Executive%20Summary) CPKC's Q2 2025 executive summary reports a **3%** revenue increase to **$3,699 million**, **37%** diluted EPS growth, and an improved operating ratio, alongside new labor agreements and an asset sale | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,699M | $3,603M | +3% | | **Diluted EPS** | $1.33 | $0.97 | +37% | | **Core Adjusted Diluted EPS** | $1.12 | $1.05 | +7% | | **Operating Ratio** | 63.7% | 64.8% | -110 bps | | **Core Adjusted Operating Ratio** | 60.7% | 61.8% | -110 bps | - The company entered into new four-year collective agreements with two divisions of the Teamsters Canada Rail Conference (TCRC), featuring annual wage increases of **3%** from 2024 to 2027[82](index=82&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Q2 2025 total revenues increased **3%** to **$3,699 million**, driven by a **7%** rise in RTMs, while operating expenses rose only **1%** due to lower fuel costs offsetting other increases | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenues (in millions)** | $3,699 | $3,603 | 3% | | **Revenue Ton-Miles (in millions)** | 55,529 | 52,130 | 7% | | **Freight Revenue per RTM (in cents)** | 6.54 | 6.78 | -4% | - The decrease in freight revenue per RTM was primarily due to a **$100 million** unfavorable impact from lower fuel prices on fuel surcharge revenue[96](index=96&type=chunk) | Expense Category | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Compensation and benefits | $659 | $612 | 8% | | Fuel | $405 | $466 | -13% | | Materials | $124 | $97 | 28% | | Purchased services and other | $572 | $606 | -6% | | **Total Operating Expenses** | **$2,356** | **$2,336** | **1%** | [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$799 million** cash and an undrawn U.S. **$2.2 billion** credit facility, supported by **$2.5 billion** cash from operations, new debt issuance, and share repurchases - Primary liquidity sources include cash on hand (**$799 million**), a commercial paper program, and a U.S. **$2.2 billion** revolving credit facility, which was undrawn at quarter-end[156](index=156&type=chunk)[157](index=157&type=chunk)[160](index=160&type=chunk) - In H1 2025, the company issued new unsecured notes raising net proceeds of approximately U.S. **$1.2 billion** and C**$1.4 billion**[158](index=158&type=chunk)[159](index=159&type=chunk) - Net cash from operating activities increased to **$2.51 billion** in H1 2025 from **$2.29 billion** in H1 2024, driven by higher cash-generating operating income[167](index=167&type=chunk) - Financing activities in Q2 2025 were highlighted by **$1.39 billion** in share repurchases, offset by **$1.39 billion** in net proceeds from new debt issuance[170](index=170&type=chunk) [Non-GAAP Measures](index=36&type=section&id=Non-GAAP%20Measures) The company utilizes Core adjusted operating ratio and Core adjusted diluted EPS to assess underlying earnings trends, reporting a Q2 2025 Core adjusted operating ratio of **60.7%** and Core adjusted diluted EPS of **$1.12** | (per share) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Diluted EPS as reported** | **$1.33** | **$0.97** | **$2.31** | **$1.80** | | Less: Gain on sale of equity investment | $0.36 | — | $0.36 | — | | Less: Acquisition-related costs | ($0.02) | ($0.03) | ($0.04) | ($0.06) | | Less: KCS purchase accounting | ($0.10) | ($0.09) | ($0.20) | ($0.18) | | Add: Tax effect of adjustments | $0.03 | ($0.04) | ($0.01) | ($0.07) | | **Core adjusted diluted EPS** | **$1.12** | **$1.05** | **$2.18** | **$1.98** | | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Operating ratio as reported** | **63.7%** | **64.8%** | **64.5%** | **66.1%** | | Less: Acquisition-related costs | 0.5% | 0.7% | 0.5% | 0.8% | | Less: KCS purchase accounting | 2.5% | 2.3% | 2.4% | 2.3% | | **Core adjusted operating ratio** | **60.7%** | **61.8%** | **61.6%** | **62.9%** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from interest rate and foreign exchange fluctuations, with a **1%** interest rate decrease potentially increasing debt fair value by **$1.9 billion**, and significant exposure to U.S. dollar and Mexican peso movements - The company is exposed to interest rate risk on its debt. A hypothetical **1%** decrease in interest rates would increase the fair value of the company's debt by approximately **$1.9 billion** as of June 30, 2025[214](index=214&type=chunk) - Significant portions of revenues, expenses, assets, and liabilities are denominated in U.S. dollars and Mexican pesos, creating foreign exchange risk[142](index=142&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting identified in Q2 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[215](index=215&type=chunk) - No material changes to internal control over financial reporting were identified in Q2 2025[216](index=216&type=chunk) [PART II - OTHER INFORMATION](index=43&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions detailed in Note 14, including an ongoing U.S. EPA inquiry regarding Clean Air Act compliance, with no material penalties anticipated - The company is responding to an inquiry from the U.S. EPA regarding compliance with the Clean Air Act's mobile source provisions, and does not expect any potential penalty to be material[219](index=219&type=chunk) - Further details on legal proceedings are available in Note 14, covering contingencies like the Lac-Mégantic accident and a Mexican tax assessment[218](index=218&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K have been identified - No material changes to risk factors from the 2024 Annual Report on Form 10-K have been identified[220](index=220&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **12,882,454** Common Shares at a weighted-average price of **$108.52** per share under its publicly announced program | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 4,392,960 | $100.23 | | May 2025 | 4,675,789 | $112.75 | | June 2025 | 3,813,705 | $112.89 | | **Total** | **12,882,454** | **$108.52** |