Core Insights - Canadian Pacific Kansas City (CPKC) reported higher fourth-quarter profits driven by improved freight volumes, with operating income growing 3% to US$1.19 billion and revenue increasing 1% to US$2.89 billion [2][3] Financial Performance - Operating income for the quarter increased by 3% to US$1.19 billion, while revenue rose by 1% to US$2.89 billion [2] - Earnings per share, adjusted for one-time items, increased by 3% to 98 cents [2] - The operating ratio reached a record low of 58.9%, reflecting a 0.8-point improvement compared to the fourth quarter of 2024 [3] Volume and Segment Performance - Overall freight volume remained flat based on revenue ton-miles but increased by 1% when measured by carloads and intermodal containers [3] - Growth was observed in coal and intermodal segments, while grain and potash carloads were flat, and other segments experienced declines [3] Market Challenges and Opportunities - U.S. tariffs are impacting CPKC's Canadian forest products traffic and cross-border steel shipments [4] - The company anticipates that forecasted bumper grain crops in Canada and the U.S. will enhance volumes in the upcoming year [4] Service Expansion - CPKC's Mexico Midwest Express intermodal service saw a 40% year-over-year volume increase in the fourth quarter [4] - The company plans to launch dedicated intermodal trains connecting Mexico and Dallas with Atlanta, Charlotte, and Jacksonville, with a potential customer planning to utilize the service for up to 80,000 loads per year [5][6] Strategic Outlook - CPKC's franchise has outperformed the industry in both revenue and earnings growth over the past two years, positioning the company for continued strong performance in 2026 [6]

Canadian Pacific Kansas City reported fourth quarter revenues that were 1% higher at $3.9 billion from a year ago, but saw unadjusted earnings per share fall to $1.20 from $1.28 y/y. The Calgary-based railroad (NYSE: CP) said core adjusted diluted EPS was $1.33, up 3% from $1.29 in Q4 2024. The operating ratio improved 80 basis points to 58.9%, a network record, along with historic marks in train weights, network speed, locomotive productivity and car miles per car day. “Our fourth quarter and full-yea ...

CALGARY, AB, Jan. 28, 2026 /PRNewswire/ - Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC) today announced its fourth-quarter results, including revenues of $3.9 billion, diluted earnings per share (EPS) of $1.20 and core adjusted diluted EPS of $1.33. Fourth-quarter 2025 results "Our fourth quarter and full year results demonstrate exceptional execution in a challenging market by controlling what we could control," said Keith Creel, CPKC President and Chief Executive Officer. "Despite macroeconomic ...

Core Viewpoint - The Zacks Transportation - Rail industry is currently facing challenges such as inflation, high interest rates, and supply-chain disruptions, but companies like Union Pacific Corporation, Canadian Pacific Kansas City Limited, and Norfolk Southern Corporation are better positioned to navigate these issues, aided by declining fuel costs which support bottom-line growth [1][4]. Industry Description - The Zacks Transportation - Rail industry consists of railroad operators that transport various freight types across North America, focusing on logistics and supply-chain services. Revenue primarily comes from freight, with some companies also earning from rail-related services like repairs and land sales [2]. Factors Deciding the Industry's Outlook - Economic activities are improving post-pandemic, leading companies to return cash to shareholders through dividends and buybacks, indicating financial strength. For instance, CSX Corporation announced an 8.3% increase in its quarterly dividend [3]. - The decline in oil prices, which fell nearly 6% from the beginning of 2025, is beneficial for the industry as fuel costs are a significant expense for transportation companies [4]. Economic Uncertainty - Rising inflation has created market unease, with concerns that the Federal Reserve may delay rate cuts, potentially impacting economic health. This uncertainty, along with geopolitical tensions, poses risks for railroad stocks [5]. Zacks Industry Rank - The Zacks Railroad industry currently holds a Zacks Industry Rank of 148, placing it in the bottom 40% of over 250 Zacks industries, indicating bleak near-term prospects [6]. Earnings Estimates - Analysts have reduced their earnings estimates for the industry, with the consensus estimate declining by 6.2% over the past year [7]. Industry Performance - The Zacks Transportation - Rail industry has underperformed compared to the S&P 500 and the broader sector over the past year, declining by 10.5% while the S&P 500 increased by 12.5% [8][9]. Current Valuation - The industry is currently trading at a trailing 12-month price-to-book (P/B) ratio of 6.14X, compared to the S&P 500's 8.06X and the sector's 4.21X. Historically, the industry has traded between 5.72X and 10.92X over the past five years [11]. Stocks to Watch - Union Pacific Corporation (UNP) is well-positioned for growth, benefiting from stable e-commerce demand and cost-cutting efforts. The company has a strong track record of earnings surprises, beating estimates in three of the last four quarters with an average beat of 3.35% [12][13]. - Canadian Pacific Kansas City Limited (CP) has consistently paid dividends, enhancing investor confidence and showing a solid earnings surprise track record with an average of 1.76% over the past four quarters [15][18]. - Norfolk Southern Corporation (NSC) is supported by e-commerce demand and employs a Precision Scheduled Railroading plan to optimize costs and services. The company also has a commendable earnings surprise history, averaging a 2.94% beat [19][20].