Canadian Pacific Kansas City (CP) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenues were $3.7 billion, down 2% year-over-year, with diluted EPS of $0.94 and core adjusted diluted EPS of $1.04, both slightly lower than the prior year.

• Volume, measured in Revenue Ton-Miles, increased 2% year-over-year, demonstrating network resiliency despite macroeconomic headwinds.

• Operating ratio rose to 66.0%, with core adjusted operating ratio at 63.0%, reflecting higher costs and FX/fuel headwinds.

• Management reaffirmed confidence in delivering full-year guidance and highlighted ongoing operational improvements and network fluidity.

• Labor stability achieved with tentative long-term agreements covering U.S. train service employees, supporting operational reliability.

Financial highlights

• Net income attributable to controlling shareholders was $846 million, down from $910 million year-over-year; operating income was $1,258 million, down from $1,317 million.

• Core adjusted operating income was $1,368 million, compared to $1,425 million in Q1 2025.

• Adjusted free cash flow for the quarter was $338 million, down from $466 million in the prior year.

• Dividends declared per share increased 17.5% to $0.228 from $0.190 year-over-year.

• Cash and cash equivalents increased to $409 million from $184 million at year-end 2025.

Outlook and guidance

• Management expects double-digit core adjusted EPS growth for 2026, with full-year guidance reaffirmed.

• Capital expenditures are projected at $2.65 billion for 2026, a 15% reduction from the prior year.

• Forward-looking statements highlight expectations for continued operational improvements, merger synergies, and growth opportunities, but note ongoing FX, fuel, and integration risks.

• Bulk business, especially grain, is expected to drive strong results, while coal remains a headwind.

• Yields are inflecting positive in Q2, with sequential improvement in operating ratio anticipated.