CPKC Q3 Revenue Rises 15% as Core Adjusted EPS Climbs 16%

Canadian Pacific Kansas City (CP ) reported third-quarter 2026 revenues of C$4.2 billion on October 28, 2026, a 15% increase from the same quarter a year earlier, according to the company’s earnings release. The Calgary-based railway posted diluted earnings per share of C$1.04, up 3% from C$1.01, and core adjusted diluted EPS of C$1.28, up 16% from C$1.10. CPKC reports its financial results in Canadian dollars, and core adjusted figures are non-GAAP measures that exclude significant items and Kansas City Southern purchase accounting, as defined and reconciled in the release.

Volumes, measured in revenue ton-miles, increased 6% from the third quarter of 2025. Total revenues were C$4,219 million versus C$3,661 million, comprising freight revenue of C$4,139 million and non-freight revenue of C$80 million. Operating income rose to C$1,487 million from C$1,336 million, while net income attributable to controlling shareholders was C$917 million versus C$920 million a year earlier. Net interest expense was C$239 million versus C$222 million, and income tax expense rose to C$448 million from C$296 million.

The reported operating ratio increased 130 basis points to 64.8% from 63.5%, and the core adjusted operating ratio increased 120 basis points to 61.9% from 60.7%. CPKC said higher fuel prices unfavourably impacted the reported and core adjusted operating ratios by 170 and 190 basis points, respectively. The average fuel price was US$4.49 per U.S. gallon, up 53% from US$2.94 in the third quarter of 2025, and fuel expense rose 61% to C$667 million. Total operating expenses increased 18% to C$2,732 million, with compensation and benefits up 15% to C$711 million.

“CPKC delivered solid results, powered by momentum across our unrivalled North American network, countering macroeconomic headwinds during the quarter,” President and Chief Executive Officer Keith Creel said in the company’s announcement. “The railroad is running very well, our service remains strong, and we continue to deliver growth across key markets, including grain, intermodal and merchandise.” Creel said the company remains on track to meet its commitments for the year.

Freight Revenue and Volumes

Grain freight revenue rose 29% to C$904 million, with grain revenue ton-miles up 23% and grain carloads up 20%. Intermodal revenue increased 22% to C$815 million, and metals, minerals and consumer products revenue rose 16% to C$532 million. Energy, chemicals and plastics revenue increased 9% to C$763 million, automotive revenue rose 9% to C$373 million, forest products rose 9% to C$211 million, potash rose 9% to C$182 million, and fertilizers and sulphur rose 3% to C$105 million. Coal revenue was C$254 million versus C$255 million.

Total carloads rose 5% to 1,191,000, and total revenue ton-miles rose 6% to 57,505 million. Freight revenue per revenue ton-mile rose 9% to 7.20 cents.

Tax Items, Buybacks and Debt

The effective income tax rate including discrete items was 32.79% for the quarter versus 24.34% a year earlier; excluding discrete items, the rate was 24.75% versus 24.50%. During the quarter, CPKC recorded a C$94 million income tax expense tied to a Canada Revenue Agency reassessment of prior-year taxes related to the KCS acquisition, an 11-cent diluted EPS impact. The company said it has objected to certain assessed positions and recorded the expense in respect of positions it has not objected to. Separately, a Mexican subsidiary settled 2020 and 2021 income tax matters with the Servicio de Administración Tributaria for a payment of C$20 million and an expense of C$17 million, a 2-cent EPS impact; the release states that the 2016 to 2019 tax years remain under dispute.

Third-quarter results also included C$17 million of advisory costs related to the U.S. Surface Transportation Board’s review of the proposed merger between Union Pacific (UNP ) and Norfolk Southern (NSC ), a 2-cent diluted EPS impact, and C$12 million of KCS acquisition-related costs, a 1-cent impact. KCS purchase accounting was C$94 million, an 8-cent impact. Core adjusted income was C$1,119 million versus C$999 million a year earlier.

Net cash provided by operating activities was C$1,550 million versus C$1,274 million, and adjusted free cash was C$1,018 million versus C$415 million. CPKC repurchased 11,542,470 common shares for C$1,487 million at a weighted-average price of C$128.80 during the quarter under its normal course issuer bid announced January 28, 2026, which authorizes purchases of up to 44.9 million shares on or before February 1, 2027. Dividends declared per share were C$0.268 versus C$0.228 in the third quarter of 2025.

Long-term debt including current maturities was C$25,846 million as at September 30, 2026, and commercial paper borrowings outstanding were US$1,535 million at a weighted-average interest rate of 2.87%. The adjusted net debt to adjusted EBITDA ratio was 3.2, the same as a year earlier. On October 6, 2026, after quarter-end, CPKC issued four unsecured notes: C$500 million of 4.20% notes due April 15, 2030; C$550 million of 4.60% notes due October 15, 2033; C$300 million of 4.90% notes due April 15, 2037; and C$450 million of 5.40% notes due October 15, 2056.

On operations, average train speed rose 8% to 20.5 miles per hour, average terminal dwell declined 7% to 9.4 hours, and locomotive productivity rose 4% to 169 gross ton-miles per operating horsepower. Locomotive fuel consumed per 1,000 gross ton-miles declined 3% to 0.990 U.S. gallons. CPKC reported that FRA train accidents per million train-miles fell 60% to 0.46, while FRA personal injuries per 200,000 employee-hours rose 20% to 1.12; the release notes the 2025 personal-injury figures were restated to reflect new information available within FRA-specified periods.

CPKC scheduled its results conference call for 4:30 p.m. Eastern Time on October 28, 2026, with a replay available through November 4, 2026, according to the event listing on its investor relations site.