Financial Data and Key Metrics Changes - The company reported adjusted EPS growth of 2% for Q2 2025, reaching $1.87 compared to $1.84 in the previous year [41] - Revenues decreased by 1% year over year, attributed to a 1% reduction in RTMs and flat carloads [29][41] - Operating ratio improved by 50 basis points to 61.7% from 62.2% in the previous year [41] Business Line Data and Key Metrics Changes - Bulk volumes showed strong performance, while merchandise and intermodal segments faced challenges due to tariffs and a weaker industrial economy [8][12] - Petroleum and chemicals experienced lower volumes due to refinery turnarounds, impacting overall performance [31] - Grain and fertilizers were a bright spot, with revenues increasing by 12%, driven by higher grain shipments [34] Market Data and Key Metrics Changes - The company noted a shift in traffic mix, with less merchandise business impacting revenues and margins [8][30] - International intermodal traffic through Prince Rupert showed good progress, while Vancouver faced challenges [52] - The tariff environment has created uncertainty, particularly affecting forest products and metals [11][36] Company Strategy and Development Direction - The company is focused on leveraging its diversified book of business and maintaining strong partnerships with customers [12][15] - Efforts are underway to develop better access to global markets, particularly in the energy sector [12] - The company is adjusting its expectations for low single-digit RTM growth for the remainder of the year due to ongoing uncertainties [15][45] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns over the tariff and trade environment, indicating that uncertainty may persist in the near term [11][15] - The company is proactively managing costs and resources to maintain margins amid changing volumes [19][41] - There is optimism about the potential for growth in the second half of the year, particularly in intermodal and bulk segments [36][47] Other Important Information - The Canadian carbon tax surcharge repeal impacted revenues by approximately $70 million in Q2 [30] - The company generated over $1.5 billion in free cash flow, up 5% year over year, primarily due to lower capital expenditures [43] - The company is revising its full-year volume assumption to low single-digit RTM growth due to the current macroeconomic environment [45] Q&A Session Summary Question: Progress on U.S.-bound international intermodal traffic through Prince Rupert - Management noted that overseas intermodal via Canada to the U.S. represents less than 5% of total revenues, with good progress at Prince Rupert but challenges at Vancouver [52] Question: Challenges or changes in optimism around company-specific initiatives - Management affirmed that company-specific initiatives remain intact, with growth fundamentals strong despite current tariff uncertainties [60][61] Question: RTM guidance for the second half of the year - Management expects volumes to accelerate as refinery outages resolve and anticipates a seasonal uptick in grain shipments [68][69] Question: Proactive changes in response to mix - Management highlighted strong bulk volumes and the need to manage costs tightly in response to volume shifts, with a focus on maintaining operational efficiency [73][78] Question: CapEx management and competitive access in potential mergers - Management is closely monitoring CapEx, reducing it by $50 million, while ensuring competitive access is defended in any merger discussions [82][84]

Financial Data and Key Metrics Changes - The company reported a 2% adjusted EPS growth for Q2 2025, with revenues down 1% year over year on a 1% decrease in RTMs and flat carloads [4][27][40] - Operating ratio improved by 50 basis points to 61.7% compared to last year's adjusted operating ratio of 62.2% [40] - Free cash flow generated was over $1.5 billion, up 5% year over year, primarily due to lower capital expenditures [42] Business Line Data and Key Metrics Changes - Bulk volumes were strong, reflecting the company's advantage in the agricultural sector, while merchandise and intermodal segments faced challenges due to tariffs and a weaker industrial economy [5][12] - Petroleum and chemicals experienced lower volumes due to refinery turnarounds, while grain and fertilizers saw a 12% increase in revenues, with grain volumes up 6% in Canada and nearly 30% in the U.S. [32][28] - Intermodal volumes were mixed, with a 4% decline in units through Vancouver but a 14% increase in Prince Rupert units [33] Market Data and Key Metrics Changes - The company noted ongoing uncertainty in the tariff and trade environment, particularly affecting forest products, metals, and automotive sectors [8][10] - The Canadian carbon tax repeal impacted revenues by approximately $70 million in Q2, expected to continue affecting the next three quarters [28] - Foreign exchange provided a slight tailwind to revenue of less than 1% [28] Company Strategy and Development Direction - The company is focused on leveraging its diversified book of business and maintaining strong partnerships with customers to navigate the uncertain environment [10][11] - Efforts are underway to enhance access to global markets, particularly in the energy sector, and to mitigate tariff impacts by finding alternative routes for affected commodities [11][12] - The company is adjusting its expectations for the remainder of the year to low single-digit RTM growth due to the current economic environment [13][44] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the second half of the year, citing broader ranges of outcomes and persistent softness in certain sectors [10][13] - The company remains committed to controlling costs and maintaining operational efficiency despite external challenges [15][22] - Management believes that the fundamentals of growth remain intact, with expectations for a rebound in volumes as tariff situations stabilize [59][85] Other Important Information - The company ended the quarter with 8,000 system cars in storage, which is double the amount at the end of Q1, allowing for flexibility in response to volume changes [22] - Locomotive availability improved to 92.5%, with an 8% reduction in locomotive unit costs year over year [23] - The company is revising its guidance for mid to high single-digit EPS growth in 2025, reflecting the impact of tariffs and economic conditions [44] Q&A Session Summary Question: Progress on U.S.-bound international intermodal traffic through Prince Rupert - Management noted that overseas intermodal via Canada to the U.S. represents less than 5% of total revenues, with good progress at Prince Rupert but challenges at Vancouver due to tariff deadlines [51][52] Question: Challenges or changes in optimism around company-specific initiatives - Management affirmed that company-specific initiatives remain intact, with a focus on leveraging network advantages despite current tariff uncertainties [58] Question: RTM guidance for the second half of the year - Management expects volumes to accelerate as refinery outages resolve and anticipates a ramp-up in grain crop shipments in September [66] Question: Proactive changes in response to volume mix - Management highlighted strong bulk volumes and the need to manage costs tightly, with a focus on maintaining operational efficiency [70][72] Question: CapEx and competitive access in potential merger scenarios - Management is closely monitoring CapEx and has reduced the budget while ensuring investments are aligned with growth opportunities [78][80] Question: Confidence in achieving volume growth in 2026 - Management expressed uncertainty regarding tariff resolutions but remains focused on maintaining strong growth fundamentals [85]

Core Viewpoint - Amgen's stock has faced a decline of 10.4% over the past three months, largely attributed to macroeconomic uncertainties and trade tensions [1][2]. Group 1: Market Environment - The stock market has experienced volatility due to President Trump's tariffs and China's retaliatory measures, although a recent deal has eased tensions temporarily [2]. - The uncertainty surrounding tariffs continues to impact economic growth, despite pharmaceuticals being exempt from initial tariffs [3]. Group 2: Company Performance - Amgen's revenues grew by 9% year over year in Q1 2025, driven by increased patient demand for innovative medicines [4]. - The company is facing declining revenues from oncology biosimilars and established products like Enbrel, with competitive pressures affecting sales [5]. - Key revenue drivers include older medicines like Prolia and Repatha, as well as new drugs such as Tavneos and Tezspire, alongside rare disease drugs from the acquisition of Horizon Therapeutics [5]. Group 3: Drug Pipeline and Approvals - Amgen is evaluating several drugs for additional indications, which could enhance revenue growth, with Uplizna recently approved for IgG4-related disease [6][7]. - The company has invested significantly in M&A to diversify its pipeline, including the development of MariTide, a novel obesity treatment [8][10]. - Clinical studies for MariTide have shown promising results, and further studies are ongoing [9][10]. Group 4: Biosimilars and Market Strategy - Amgen launched several new biosimilars in 2025, generating substantial sales, including Wezlana and Pavblu, which contributed to a 35% year-over-year increase in biosimilar sales [13][15]. - The company is actively pursuing additional biosimilar approvals to mitigate the impact of upcoming patent expirations for key drugs [15][16]. Group 5: Financial Outlook - Amgen's stock has outperformed the industry and S&P 500, with a year-to-date increase of 7.3% [18]. - The stock is reasonably valued, trading at a price/earnings ratio of 13.12, lower than the industry average [21]. - Earnings estimates for 2025 and 2026 have seen upward revisions, indicating positive market sentiment [24][26]. Group 6: Long-term Growth Potential - The company is expected to maintain long-term revenue growth driven by strong performance from key drugs and innovative medicines [27]. - Despite initial data from MariTide studies being below expectations, it holds potential as a significant product for Amgen [27].