CPKC delivers strong fourth-quarter results; positioned to accelerate growth in 2025

Core Insights - Canadian Pacific Kansas City (CPKC) reported strong fourth-quarter results with revenues of $3.9 billion, a diluted EPS of $1.28, and a core adjusted combined diluted EPS of $1.29, reflecting a solid performance in the rail industry [1][10]. Financial Performance - In Q4 2024, revenues increased by 3% to $3.9 billion from $3.8 billion in Q4 2023 [10]. - The reported operating ratio (OR) improved, decreasing by 210 basis points to 59.7% from 61.8% in Q4 2023 [10]. - Core adjusted combined OR decreased by 160 basis points to 57.1% from 58.7% in Q4 2023 [10]. - Reported diluted EPS rose to $1.28 from $1.10 in Q4 2023, while core adjusted combined diluted EPS increased by 9% to $1.29 from $1.18 [10]. - For the full year 2024, CPKC achieved a net income of $3.713 billion, compared to $3.923 billion in 2023 [15]. Operational Highlights - CPKC led the industry with the lowest Federal Railroad Administration (FRA)-reportable train accident frequency among Class 1 railroads for the second consecutive year, continuing a legacy of 17 years of industry leadership [3]. - The company expects continued strong earnings growth in 2025, consistent with multi-year guidance provided at the 2023 Investor Day [4]. Capital Expenditures and Guidance - CPKC plans capital expenditures of $2.9 billion for 2025, reflecting an increase compared to 2024, driven by a higher expected USD/CAD FX rate [10]. - The company anticipates core adjusted diluted EPS to increase between 12% and 18% compared to 2024 core adjusted combined diluted EPS of $4.25 [10]. Company Overview - CPKC operates a transcontinental freight railway spanning Canada, the U.S., and Mexico, providing rail and intermodal transportation services over a network of approximately 20,000 miles [21][22].