Canadian Pacific Kansas City — Financial Results
Revenue and Earnings Grew Solidly in 2025, With Efficiency Improving
| Metric | 2025 | 2024 | Change |
|---|---|---|---|
| Total revenues | $15,078M | $14,546M | +4% |
| Diluted EPS | $4.51 | $3.98 | +13% |
| Operating ratio | 62.8% | 64.4% | -1.6 pts |
CPKC grew revenues by 4% and earnings per share by 13%, driven primarily by higher freight volumes across most commodity groups. The operating ratio (the share of each revenue dollar consumed by operating costs — lower is better) improved by 1.6 percentage points, meaning the company is keeping more of every dollar it earns. On a core adjusted basis (which strips out one-time items), the operating ratio improved to 59.9% from 61.3%.
Intermodal and Grain Led Volume Growth; Crude Oil Was the Main Drag
| Segment | Revenue 2025 | Revenue 2024 | Change |
|---|---|---|---|
| Intermodal | $2,679M | $2,524M | +6% |
| Grain | $3,217M | $3,012M | +7% |
| Coal | $1,025M | $943M | +9% |
| Forest products | $792M | $816M | -3% |
Intermodal (containers and trailers moved by rail) was a standout, with volumes up 8%, partly boosted by the new Gemini Cooperation shipping alliance increasing traffic through Vancouver and Saint John. Grain surged 7% on strong Canadian and U.S. export flows. The weakest spot was crude oil, which saw lower volumes within the Energy, Chemicals and Plastics segment — though higher rates and LPG (liquefied petroleum gas) shipments to Mexico partly offset that.
Fuel Costs Fell, But Lower Fuel Surcharge Revenue Offset the Benefit
Lower diesel prices cut fuel expenses by $159 million in 2025, which helped operating costs. However, because CPKC charges customers a fuel surcharge that moves with fuel prices, lower prices also reduced revenues by $205 million — leaving a net unfavourable impact on operating income of $46 million. The elimination of Canada's federal carbon tax on April 1, 2025 contributed to the fuel expense reduction.
CPKC Spent $3.1 Billion on Capital in 2025, Mostly on Locomotives
| Category | 2025 | 2024 |
|---|---|---|
| Total capital additions | $3,102M | $2,825M |
| Rolling stock (locomotives/railcars) | $930M | $346M |
| Track and roadway | $1,736M | $1,968M |
Locomotive spending nearly tripled year-over-year to $923 million as CPKC invested heavily in new Tier 4 (cleaner, more fuel-efficient) locomotives. For 2026, the company plans to invest approximately $2.65 billion — a step down from 2025 — with the majority again going to track and rolling stock.
Credit Ratings Upgraded Twice, Signalling Growing Financial Confidence
Both major rating agencies lifted CPKC's credit rating in 2025: Moody's upgraded to Baa1 stable and Standard & Poor's upgraded to BBB+ with a positive outlook. Higher credit ratings generally mean the company can borrow money more cheaply, which matters for a capital-intensive railroad carrying significant long-term debt.
KCS Integration Is Winding Down, Reducing a Key Cost Drag
Acquisition-related costs tied to the 2023 Kansas City Southern merger fell from $112 million in 2024 to $72 million in 2025, and headcount dropped slightly (from ~20,144 to ~19,967 average employees) as systems integration was completed. These costs are still being excluded from the company's core adjusted earnings figures, but the trend is clearly downward — suggesting the integration burden on reported profits should continue to shrink.