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]

Financial Data and Key Metrics Changes - The company reported revenues of $3.7 billion, an increase of 3% year-over-year, with a strong volume growth of 5% [5][26] - The operating ratio improved by 220 basis points to 60.7%, while diluted earnings per share rose to $1.10, reflecting an 11% increase compared to the previous year [5][26] - Year-to-date cash provided by operating activities increased by 6% to $3.8 billion, with capital expenditures of $860 million in the quarter [30][26] Business Line Data and Key Metrics Changes - The automotive franchise achieved a revenue increase of 2% on a 9% volume growth, marking record performance [23] - Bulk revenues, particularly in grain, rose by 4% with a 6% volume growth, while potash revenues and volumes increased by 15% [18][19] - Intermodal revenue grew by 7% on an 11% volume increase, driven by strong domestic intermodal performance [24] Market Data and Key Metrics Changes - U.S. grain volumes were up 13% year-over-year, while Canadian grain volumes decreased by 2% due to lower carryout stocks [19] - The company noted challenges in the energy, chemicals, and plastics segment, with revenues and volumes down by 2% due to softer demand [20] - The international intermodal segment saw a 10% volume increase, supported by growth from Gemini through various ports [24] Company Strategy and Development Direction - The company remains focused on executing growth opportunities despite potential industry consolidation, emphasizing its unique three-country network [8][10] - The management highlighted the importance of the Meridian Speedway as a strategic asset to create market advantages and enhance service offerings [42][45] - The company plans to continue leveraging its network to drive efficiencies and maintain strong customer service [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% to 14% earnings growth for the year, despite macroeconomic challenges [8][10] - The company is optimistic about the strong grain harvest in Canada and the U.S., which is expected to support volume growth [30][26] - Management acknowledged the impact of recent supply chain challenges but remains focused on maintaining operational efficiency and cost control [66] Other Important Information - The company has repurchased 34 million shares, representing approximately 91% of its announced share repurchase program [30] - The management emphasized the importance of safety, reporting improvements in personal injuries and train accident frequencies [15] Q&A Session Summary Question: On the M&A topic regarding the UP and NS merger - Management indicated that the approval of the merger is not guaranteed and that significant conditions would likely be required to protect competition in the industry [33][34][36] Question: Strategy in the current landscape - Management confirmed that they are exploring alliances with non-applicants to leverage opportunities without the risks associated with mergers [41][42] Question: Insights on grain opportunities and customer behavior - Management noted that grain companies are currently pulling grain into elevators rather than pushing it out, indicating a cautious approach from customers [60][62] Question: Pricing trends and future growth potential - Management expects to see positive pricing trends in Q4 and remains confident in achieving double-digit EPS growth for the year [66][68] Question: Performance of the KCS network - Management discussed ongoing efforts to align KCS performance with CP operating levels and highlighted the importance of cost synergies [79]

Financial Data and Key Metrics Changes - The company reported revenues of CAD 3.7 billion, an increase of 3% year-over-year [5] - Operating ratio improved by 220 basis points to 60.7% [5][26] - Earnings per share increased by 11% to CAD 1.10 compared to the previous year [5][26] Business Line Data and Key Metrics Changes - Automotive franchise achieved a record quarter with revenue up 2% and volume up 9% [23] - Bulk revenues increased by 4% driven by a 6% volume growth in grain, with U.S. grain volumes up 13% [18][19] - Intermodal revenue rose by 7% with an 11% increase in volume, supported by domestic intermodal growth [24] Market Data and Key Metrics Changes - Canadian grain volumes decreased by 2% due to lower carryout stocks and demand for canola exports [19] - Potash revenues and volumes increased by 15% driven by strong demand fundamentals [19] - Energy, chemicals, and plastics revenue and volume declined by 2% due to softer demand and customs challenges [20] Company Strategy and Development Direction - The company remains focused on executing growth opportunities despite potential industry consolidation [8][10] - The management emphasized the importance of maintaining an industry-leading position and delivering strong results [10] - The company is exploring alliances with non-applicants to leverage regulatory requirements for merger-like benefits [42] Management Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges but expressed confidence in achieving 10%-14% earnings growth [8] - The company is well-positioned to handle strong grain harvests in Canada and the U.S. [16][30] - Management expects to maintain strong labor productivity and margin improvement in the fourth quarter [28] Other Important Information - The company has repurchased 34 million shares, representing approximately 91% of the announced program [30] - The company is on track to invest approximately CAD 2.9 billion in capital expenditures for 2025 [30] Q&A Session Summary Question: M&A implications of UP and NS merger - Management highlighted that the approval of the UP and NS merger is not guaranteed and will depend on regulatory scrutiny [34][35] Question: Strategy in light of potential merger impacts - Management confirmed they are actively engaging with other railroads to create alliances and leverage opportunities [42] Question: Volume trends and achieving guidance - Management expressed confidence in achieving mid-single-digit RTMs and double-digit EPS growth despite challenges [57][68]

Financial Data and Key Metrics Changes - The company reported revenues of $3.7 billion, an increase of 3% year-over-year, with earnings per share (EPS) of $1.10, reflecting an 11% increase compared to the previous year [5][25] - The operating ratio improved by 220 basis points to 60.7% [5][25] - Year-to-date cash provided by operating activities increased by 6% to $3.8 billion [29] Business Line Data and Key Metrics Changes - The automotive franchise achieved a record quarter with revenue up 2% and volume up 9% [22] - Bulk revenues, including grain and potash, saw growth with grain revenues up 4% on 6% volume growth, while potash revenues and volumes increased by 15% [19][20] - Intermodal revenue rose by 7% with an 11% increase in volume, driven by strong domestic intermodal growth [22][23] Market Data and Key Metrics Changes - U.S. grain volumes increased by 13%, while Canadian grain volumes decreased by 2% due to lower carryout stocks [18][19] - The company noted strong demand in Mexico and the U.S. South, unlocking new opportunities [18] - The automotive sector remains resilient despite trade policy uncertainties, contributing to overall growth [22] Company Strategy and Development Direction - The company is focused on executing unique growth opportunities and maintaining its industry-leading position despite potential industry consolidation [7][10] - The strategic development of the Meridian Speedway is highlighted as a critical advantage for creating markets and bridging traffic between key regions [43][45] - The company plans to continue leveraging its North American network to drive growth and improve service efficiency [30][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% to 14% earnings growth for the year, despite macroeconomic challenges [7][30] - The company remains committed to maintaining strong safety performance and operational efficiency [12][14] - Management anticipates a strong finish to the year, supported by solid grain harvests and improved operational metrics [15][30] Other Important Information - The company has repurchased 34 million shares, approximately 91% of its announced share repurchase program [29] - The removal of the Canadian federal carbon tax contributed to a decrease in fuel expenses [26] Q&A Session Summary Question: On the M&A topic regarding UP and NS merger implications - Management indicated that the approval of the merger is not guaranteed and that significant conditions would likely be required to protect competition in the industry [34][36] Question: Strategy in light of the merger discussions - Management confirmed ongoing engagement with non-applicants to explore alliances and leverage opportunities without the risks associated with mergers [42] Question: Insights on grain opportunities and customer behavior - Management noted that grain companies are currently pulling grain into elevators rather than pushing it out, indicating a cautious approach from customers [60] Question: Pricing trends and future growth expectations - Management expects pricing to turn positive in Q4 and anticipates mid-teens EPS growth potential in 2026, contingent on macroeconomic improvements [64][66]

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Financial Highlights - Revenues reached $3.7 billion, a 3% increase compared to Q3 2024[20] - The operating ratio improved by 260 bps to 63.5%[20] - Core adjusted operating ratio improved by 220 bps to 60.7%[20] - Diluted EPS increased by 12% to $1.01[20] - Core adjusted diluted EPS increased by 11% to $1.10[20] Operational Performance - RTMs increased by 5%[20] - FRA personal injuries improved by 3%[26] - FRA train accident frequency improved by 20%[26] Revenue Breakdown - FX-Adjusted Revenue increased by 6% in Bulk[35] - FX-Adjusted Revenue increased by 7% in Intermodal[36] - Total operating expenses decreased by 1% to $2.325 billion[43] Cash Flow and Capital Allocation - The company expects $2.9 billion in capital expenditures for 2025[57] - Share repurchases amounted to 34.1 million shares since the program's announcement, with 91% completion by the end of Q3[57] Outlook - The company anticipates 10-14% Core Adjusted Diluted EPS growth vs 2024 Core adjusted diluted EPS of $4.25[62]

Industry Overview - U.S. Class I railroads are experiencing tepid growth with a 3% year-over-year decline in rail volumes for the week ending October 25, 2025, totaling 498,462 carloads and intermodal units moved, despite a 2% year-to-date increase [1] - North American rail volumes, including major U.S. players, averaged around 700,000 carloads over the trailing four-week period, showing a year-over-year dip while intermodal traffic, which constitutes 53% of total volume, experienced a 4% year-to-date gain but fell 4% in Week 43 [2] Commodity Performance - Grain volumes have increased by 7% year-to-date and 5% quarter-to-date, driven by strong U.S. exports amid global supply disruptions, with record soybean harvests reported by the U.S. Department of Agriculture [3] - Coal shipments showed mixed results, remaining flat weekly but down 3% quarter-to-date and up 4% year-to-date, reflecting earlier increases in domestic power plant usage, although recent declines indicate a cooling trend as natural gas prices stabilize [3] Automotive Sector Impact - North American automotive carloads decreased by 10% in Week 43, with a quarter-to-date increase of 2%, primarily due to a fire at Novelis' aluminum plant, which halted production and is expected to cost Ford an estimated 90,000-100,000 vehicles in Q4 [4] - Ford is increasing shifts at other plants to mitigate losses, while GM is facing lesser impacts; Eastern railroads anticipate Q4 pressure due to their proximity to affected auto plants, whereas Western railroads have maintained relative stability [4]

Core Insights - CSX has undergone a leadership change with the appointment of Kevin Boone as Chief Financial Officer and Maryclare Kenney as Chief Commercial Officer, following the arrival of new CEO Steve Angel [1][2][4]. Leadership Changes - Kevin Boone, previously the executive vice president and chief commercial officer, has been appointed as the new chief financial officer, replacing Sean Pelkey, who has left the company [1][2]. - Maryclare Kenney has been promoted to senior vice president and chief commercial officer, having been a leader in CSX's commercial operations for nearly 14 years [1][3]. Executive Backgrounds - Kevin Boone joined CSX in 2017 and has held various leadership roles, including a previous two-year term as chief financial officer and vice president of corporate affairs and investor relations [2]. - Maryclare Kenney was responsible for merchandise sales and marketing, Transflo transload and logistics, automotive, and Total Distribution Services, Inc. (TDSI) prior to her promotion [3]. CEO's Vision - CEO Steve Angel expressed confidence in the new leadership team, stating they are well-positioned to build on CSX's momentum and achieve long-term success [2][4]. - Angel emphasized the importance of developing a strong talent pipeline and operational excellence within the railroad industry [4].

Core Insights - CSX has announced executive leadership changes to enhance strategic focus and long-term growth objectives, appointing Kevin Boone as CFO and promoting Maryclare Kenney to CCO [1][2] Leadership Changes - Kevin Boone has been appointed as executive vice president and chief financial officer, succeeding Sean Pelkey, who has left the company [1][2] - Maryclare Kenney has been promoted to senior vice president and chief commercial officer, emphasizing the company's commitment to value creation [1][2] Leadership Background - Kevin Boone joined CSX in 2017 and has held various leadership roles, including executive vice president and chief commercial officer, and has experience in navigating supply chain challenges during the COVID-19 pandemic [3] - Maryclare Kenney has been with CSX for nearly 14 years, previously overseeing Merchandise Sales and Marketing, and has held leadership roles in intermodal and automotive sectors [4] Company Vision - The president and CEO of CSX expressed confidence in the new leaders, stating they will help build a high-performance culture and aim to make CSX the best-performing railroad in the nation [2][5] Company Overview - CSX is a premier transportation company based in Jacksonville, Florida, providing rail and intermodal services across various markets, contributing significantly to the U.S. economic expansion [6]